JACKSON – Auditor Bryan Starnes of Martin Starnes and Associates told Northampton County Commissioners that he was &uot;very pleased&uot; with the way county leaders handled their 2003-2004 budget and commended them on a job well-done during Monday’s meeting.

&uot;Considering that the county took on three projects of significant magnitude with Human Resources, the E-911 Center and debt service, I think you deserve kudos,&uot; said Starnes.

In reviewing the previous year’s budget, Starnes noted that although the county appeared to be spending the same amount of money this fiscal year, it clearly had to cut the budget somewhere to keep the cash flow consistent.

Last year the county dedicated $10,169,182 to Human Services, a difference of $615,878 compared to this year, while education expenditures totaled $3,961,893, an increase of $363,739, with $3,756,424 being spent on public safety, an increase of $648,952.

In 2004, General fund expenditures for the general government were $2,056,457, $36,462 less than the previous year, with increases in economic and physical development, cultural and recreation and environmental protection/transportation.

&uot;These differences are offset by restricted intergovernmental expenditures,&uot; said Starnes.

With regard to unreserved fund balance, even though the county experienced a decrease of $36,135, current figures from the audit show the fund at a healthy $4,181,533, making for a total of 19 percent of general fund expenditures compared to the state average of 24 percent (the Local Government Commission recommends counties maintain at least eight percent of general fund expenditures).

In addition, Starnes presented a bar graph to depict how the county’s fund balance has been steadily on the rise since 2001.

He also noted an overall climb in property valuation over the past four years, but explained to commissioners that due to a lack of revenue generated from retail businesses, the county would not likely see a large increase in that area.

As of June 30, 2004, Northampton County’s percentage of collection for ad valorem taxes exceeded the state average by one percent with 95.12 percent of funds collected.

&uot;We have an economy where people aren’t letting go of their money,&uot; he said. &uot;Because you don’t have a large retail base, citizens are spending their money in other counties, therefore your property tax is going to have to be higher.&uot;

Starnes stated that it would probably be 2006 before a significant change would be noted since it takes time to see a &uot;jump&uot; in numbers.

On the flip side, Starnes cautioned the county over its debt service for water and sewer. &uot;For a couple of years in a row, water and sewer have continued to use more funds than it generated,&uot; he said.

&uot;Currently, the water/sewer enterprise is operating within its own cash flow,&uot; said Northampton County Manager Wayne Jenkins. &uot;However, since it is not generating the funds necessary to support itself, it is drawing off its own departmental fund balance.&uot;

Following the 2003 audit, the county approved a suggested measure to perform an efficiency study on the water and sewer department to maximize its effectiveness.

&uot;Last year, I met with Public Works Director Andy Crew to discuss the implementation of operational and efficiency changes and some of those changes have been put in place and have proved effective,&uot; said Jenkins, who said that final results were expected this week.

Starnes admonished the county that continuing to operate off the water/sewer fund balance would eventually lead to having to dip into the general fund.

&uot;Half of your budget is generated by revenue from property taxes,&uot; he said. &uot;My suggestion to you is to let your first objective of your next workshop be how to get the water/sewer fund on its feet. You can’t expand your services until you see an increase.&uot;

&uot;You have done a great job administering the budget, despite the challenge of taking on three sizable projects, and you still broke even,&uot; Starnes concluded. &uot;I think you have done a remarkable job.&uot;

Jenkins stated that the county would look to the findings of the efficiency study to see if there were any additional measures that could be taken to increase the efficiency level of the water and sewer fund.

The county submitted its official figures October 31, 2004.