County will freeze budget for 2009-10
By Steve Herring
Published in News on June 11, 2009 1:46 PM
Wayne County's $157 million "standstill" budget will be frozen as soon as it goes into effect July 1, commissioners were told Wednesday morning.
"Our fear is, which is why I said starting on July 1 there is a freeze, because my fear is we are going to walk into July, August and September and the legislature, they are not going to be done this month and the federal government is not going to be done until October," County Manager Lee Smith said.
"And if they come in and say, 'By the way, Medicaid is going to this,' then we take a hit and I have got to be prepared for it," he said. "That was a problem with schools this year. They (state) said, 'You have got to cut x percent.' Well, they were in April. They were three-quarters through the year.
"Based on projections we have seen from the state on revenues, we have tried to go below what the state said might come in just as we have for the last four or five years and that is what has kept us safe."
One area where Smith said he is fearful of the state is a possible repeal of a measure designed to improve collection of vehicle taxes.
The county, Smith said, has been aggressive in collecting property taxes, averaging slightly better than 97 percent. A number of loopholes in the current vehicle tax procedure drags that percentage down, he said.
The measure under attack would require people to pay their vehicle taxes when they renew their vehicle registration.
The uncertainty of the economy and state and federal funds drove a good portion of commissioners' conversation during their Wednesday budget workshop.
Already the county has taken a $3.6 million hit in sales tax revenues. The loss is attributed to the slowdown in retail sales and the Medicaid Relief/Sales Tax Swap. In exchange for assuming Medicaid-related costs, counties had to surrender proceeds from the Article 44 sales tax.
Smith told commissioners the public is interested in the tax rate, it will stay the same at 76.4 cents per $100 of value, and services, which are "pretty much" at the same level.
The budget proposal, he said, is some $5.5 million, or about 3.2 percent, less than the current one. Most of the cuts, he said, were in operations and capital.
School funding, one of the budget's major expenditures was kept at the same level. The budget includes the second year of two-year trial period for kindergarten through second grade summer school.
Smith provided a brief budget overview and opened the floor to questions.
Commissioner Steve Keen wanted to know how much money the county has.
"And that question would be what the state has held back thus far because of what the state has been doing over the last six weeks, really eight weeks," he said. "To help me understand where we are I'd like to know how much money we have on hand before we start."
Keen said the state is not sending money to municipalities and counties. He said he is concerned about the money being held back by the state.
"I'd like to know what Wayne County has in the bank," he said.
He also wanted to know if the state and federal revenue projections should be adjusted down.
County Finance Officer Pam Holt said that based on projections the county will hold its own or possibly gain a small amount.
"We have losses in revenues, but we have cut expenditures to make up those losses," she said. "We are starting pretty much where we started last year."
Smith told Keen that the county has approximately a $26 million reserve.
He agreed with Mrs. Holt that the county stands to be between one half to a million dollars "to the good this year."
"It is not because our revenues came in at a high level," he said. "It is because we cut expenditures. Not a lot of counties can say that. We saw it coming and started cutting July 1 (2008)."
"This time of the year when you talk to county commissioners in other counties and everybody is always asking questions on raising taxes, 'are you going to have enough money to sustain for another year?'" said Commissioner John Bell. "When you tell people in other counties that we don't plan to raise taxes and will be OK they can't believe it because everybody is in the red right now."
It might be possible to trim another 3-5 percent from the budget, but more than that and that departments "will bleed," Smith said.
Smith said he'd rather not have to do that. However, that is not out of the question depending on what the state does.
He said a committee be formed to ask employees to look at benefits and to prioritize them as to what are the most important.
Smith said the performance committee will begin meeting July 1 to look at option in case other areas have to be cut, he said.
"I do have fear what Mr. Keen is talking about could happen," Smith said.
"I think your plan is good one thinking outside the box." Keen said. "I would proceed with very much caution on this revenue side. I am worried about the state not sending those funds. We don't want to be caught in the middle and not get money from the state."
There is some risk attached to budget, but the county has tried to negate it as much as possible by being extremely conservative with budget revenues, Smith said.
The budget freeze will continue the hiring freeze as well, Smith said. The exception will be in emergency areas such as telecommunicators.
Even then, when possible, Smith is hopeful departments may be able to hold off from hiring for 30, 60, 90 or more days.
The county has sliced a net of 110 positions over the past four years -- a savings of $14.3 million.
Smith has targeted cutting another eight positions for a savings of $250,000 and his goal is 15 more through attrition not layoffs.
Employees will not receive salary increases.
There will be changes to the county's health insurance. The deductible will increase from $500 to $1,000 and the top two pharmacy co-pays will increase by $5 each. Also, retirees would see their premium increase from $435 to $550.
To further trim the budget, Smith is recommending that employees hired after July 1 not be eligible for post-retirement benefits.
While there are no plans to expand the four-day workweek, most county office will continue to operate under that schedule. The four-day workweek was implemented last August, and along with routing of county vehicles, has saved the county about $315,000.
A public hearing on the budget will be held Tuesday, June 16 at 10:30 a.m. in the commissioners'' meeting room on the fourth floor of the county courthouse annex. The budget must be adopted by July 1.
The budget proposal is available for inspection at Smith's office and online at waynegov.com.