County surviving economic downturn
By Steve Herring
Published in News on October 26, 2008 2:00 AM
County Manager Lee Smith said Wednesday he has "put the skids" on some county spending.
Smith said while he remains confident that the county's sound fiscal responsibility over the past several years and its ability to grow its savings have put it in a position to weather the ongoing financial crisis, he is still concerned about news he is hearing from the state.
The economic downtown isn't expected to derail the county's plans to put a new $9.7 million communications system in place, but it is too early to tell if it will impact a planned $22 million school renovation and building project, he said.
The "skids" include a freeze on hiring of non-essential personnel as well as a delay in some capital purchases until the end of the year to see where the county stands, Smith said.
There are not that many capital purchases in the budget, items that include computers and vehicles, he said.
For instance, the county is looking at shifting vehicles around instead of buying new ones, he said.
"In some cases we have to buy new because we have some that are older that are costing us a lot of money," Smith said. "It (vehicle purchases) is being looked at on a case-by-case basis and we are doing a cost analysis -- how much does it cost to operate it and maintain it. If we are at a point at which we are losing money we will look at a new vehicle, one that might get better gas mileage and reduce maintenance cost."
The four-day work week the county implemented in August is also a "piece" of the county's savings efforts.
"Now we are telling workers 'when you leave your office for a period of time, cut your lights off,"' he said.
Smith said that might not seem like a lot, but if he saves $25 a year by turning off the lights in his office and that savings is multiplied by all of the other offices then it "adds up."
Another area of savings has been in a reduction of the number of county employees. Over the past several years, the county has left 123 positions vacant, resulting in a savings of $2.5 million to $3 million, Smith said.
But now employee turnover in the county is at an all-time low, he said.
"People are staying put," Smith said. "I hope that county employees are fairly satisfied with their job and benefits. We used to have wiggle room in open positions, now it is just not there."
Smith said he is concerned about what he is hearing about cuts on the state level. Early indications were a $250 million budget shortfall.
Smith said he would not be surprised to see a $1 billion shortfall based on what he has seen.
Gov. Mike Easley has made cuts so that might help some, Smith said, and some areas look better than they did a couple of weeks ago.
"I think the state will have to look to cut and one of the places I fear is going to be Medicaid," he said.
"I have never taken what they (state) said they were going to give me at 100 percent," Smith said. "In some cases I cut it in half and say there is no way we are going to get that much. I just never felt that confident about it. I think that will help us if the state decides to start drawing that (Medicaid) back next year.
"Also, we planned for this year and next year that our revenues would be flat. No increases. Therefore, if you have extra money you bank it away. You don't spend what you think you might have. You spend what you know you have and save what you have. I think that has helped us this year and that is why I am not as panicked as some. The way a lot of folks fix budgets is that they overestimate revenues and adjust budget at year's end in an audit. We don't do it that way."
"Right now I think we are holding our own and are waiting to see the next sales tax figures," Smith said. "We have not seen a major hit yet, but they say we are going to get it. But I think by our projecting flat (revenues) I am hoping that we are kind of prepared for it.
"But that does not mean the county can sit back and say it is prepared for it. We have to look for ways to cut back."