Costs are rising, revenue staying the same, BOC says

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By Nick Nunn staff writer

The Morgan County Board of Commissioners (BOC) held the first in a series of work sessions, which will be devoted to discussing the upcoming fiscal year 2015 budget. These work sessions are part of an initiative that the BOC created last year at their first-annual retreat.

Morgan County Finance Director Lori Sayer told the commissioners that the discussions would be “very, very informal” because of how early it is in the planning stages of the next budget.

County Manager Michael Lamar said that the set of financial figures given during the work session would be a “moving target” which will continue to change until the budget becomes more solid as the end of the current fiscal year approaches.

Sayer projected that projected revenues for the fiscal year 2015 would increase more than $392,000 and that lowest possible minimum increase in expenditures would be approximately $198,000.

However, since the budgeted expenditures exceed the budgeted revenue for 2014 by almost $1,370,000, approximately $1,175,000 from the general fund would have to be used to balance the fiscal year 2015 budget. Sayer reminded the board that this projection is based on a minimalist increase in expenditures, which would not allow for employee raises or departmental “wish lists.”

An expected expenditure increase of $241,000 is due to a projected increase of 30 percent in healthcare costs, and a projected workers compensation increase would add another $36,823. Because the county refinanced the unfunded portion of the defined benefit retirement plan, however, they can expect a savings of more than $85,000 in the retirement during the fiscal year 2015.

A 2 percent increase in salary for employees would create an additional projected amount of more than $132,000, which a 3 percent increase would be $198,000. Sayer said that she would look into a “blended” system for providing an employee raise, but BOC Chair Andrew Ainslie made it clear that no raise was being promised at this point in the discussion.

Sayer said that she expects a “rebound” in property values, which will allow for the possibility of dropping of dropping below the recommended unreserved fund balance of 15 percent – as of the end of fiscal year, the general fund’s unreserved fund balance will be roughly 19 percent – down to 12.5 percent by the end of fiscal year 2015. However, if no property value increase occurs, a tax increase of a little more than a mil will have to be levied in order to keep the unreserved fund balance at 12.5 percent.

Lamar stated that he thinks that Sayer’s projections are too conservative and that, although it is taking a while, the market “is turning” toward the positive. Ainslie mentioned the possibility of earning additional revenue from rental properties, as they currently do at the Public Safety Complex, but Lamar said that rental revenue would only be “nickels and dimes” in terms of the overall budget.

Commissioner Phillip Clack brought up the possibility of creating user fees or some other type of payment system for the counties solid waste disposal, saying that Morgan County is one of few counties that he is aware of that doesn’t charge for the service in some capacity.

Sayer noted that approximately $700,000 was spent on solid waste last year. Ainslie pointed out that charging for trash disposal would lead to dirtier roadways, but Lamar stated that they could look into the possible benefits of creating a $5 or $10 surcharge for solid waste disposal.

Commissioner Ron Milton also added that a charge on solid waste disposal could also lead to increased recycling, which would add to county revenue. Commissioner Ellen Warren expressed her interest in refunding soil conservation, a $17,788 department that was cut from the 2014 budget Ainslie also expressed a desire to be able to commit more funding to economic development in the county.

Replying to a request from Milton that the commissioners be able to look at departments wish lists as soon as possible, Sayer said that she would push meetings with department heads during March in order to get budgetary lists from them.

“We’re squeezed so tight,” said Ainslie, expressing worry that decreasing budgets for services would only cause larger problems down the road. “Every year seems to get harder,” added Warren. “We can’t be any more efficient. It’s now going to be a service reduction.

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