County faces $309,800 deficit
Published 11:02 am Wednesday, February 15, 2012
GATESVILLE – An error in Gates County local government’s 2011-12 fiscal year budget has resulted in an effort to bring the bottom line back into balance.
County Finance Officer Sandy Pittman formally reported the error to the Gates County Board of Commissioners at their Feb. 1 meeting.
Pittman reported that due to a miscommunication between her office and the Gates County Tax Office, the budget was short by $309,800.
In a Jan. 30 letter penned by County Manager Toby Chappell to the commissioners, he said the miscommunication between the tax office and the finance office was linked to the dollar amount owed for property taxes.
“Mrs. (Renee) McGinnis (the county’s tax collector) gave us an amount of $5,953,253, believing that she was telling us the total number for taxes (current and delinquent taxes plus refunds and fees),” Chappell wrote. “However, it was understood by my office that this was the current year taxes only. Therefore, the delinquent taxes and fees minus the refunds were counted twice in the budget. This error has led to a deficiency of $309,800 in our current budget.”
To counteract the deficit, Chappell stated that financial adjustments have been made in several departments, modifications he said that would not disrupt the services provided by the county to its citizens.
“The amount that is adjusted will not be an amendment to the budget,” Chappell said. “The finances will be encumbered in place. If the resources are located during the year, the encumbered amounts will be released.”
County officials laid out the proposed budget reductions. They included:
Merit raises ($12,500)
Misc./Sunbury School ($12,500)
Condemned houses ($10,000)
Courthouse flooring ($11,000)
Courthouse roof ($130,000)
Courtroom repairs ($20,000)
Sheriff vehicle ($20,000)
Boarding inmates ($20,000)
Finance Dept. part-time salaries ($3,700)
Building and Grounds fuel ($5,000)
Those budget reductions total $259,700. To make-up the difference between that figure and the $309,800 deficit, county officials projected $50,100 worth of increased revenues through the current tax budget due to estimated vs. actual deferments ($44,000) and CSE/DSS overpayments that have been received but not budgeted ($6,100).
“If we see that our revenues are coming in higher than projected then we can release some of these encumbered funds and go forward with these projects,” Pittman told the commissioners at the Feb. 1 meeting. “This was sent to you as information to get your input to see if you are good with this plan or if you have other things you would like to see done to handle this issue.”
Pittman said she was closely watching two to three line items where funds may very well come in over what was budgeted.
“The tax levies and the tax collections will not make this up, we know that,” Pittman stressed. “We don’t expect the collections to offset this, so we have identified other places where we think we can offset these.
“If we project and stay on the same course of collectability, then this number ($309,800) is overstated,” Commissioner John Hora observed.
“We’re basically level with where we were (on collections) at the same time last year,” Pittman said.
“This is just a suggestion that you’re giving the board to move forward temporarily,” Commissioner Henry Jordan stated. “The first thing I see is the merit raises (for county employees) – $12,500 and then I look at the revenue statement and I see that so far this year we haven’t used any of that.”
“Correct, when we get to the end of the year we’ll do a budget amendment to disperse that money through the departments that need it based on our projections,” Pittman said.
“This does allow us to move forward at this time without having to withdraw fund balance at this time,” Jordan said. “If it needs be in four months, if we say it’s inevitable, then certainly we can readdress that. It could get better.”
Pittman said she could reevaluate the financials at the end of March or early April to see if there were revenue lines coming in higher than projected.
“The intent of this information was to make you aware that a problem had been identified as well as a solution being identified,” said Chappell. “If we move further into the year and the problem is not as bad as anticipated, then we’ll release the money on projects we had planned to do.”
“Budgets are guidelines, they never materialize exactly as they’re put on paper,” Hora said. “That is why we’ve had this positive fund balance growth over the past five years because of this exact reason. You can call it anything you want to – retained earnings, fund balance, or whatever – any time the revenue stream increases above the expense, you have a gain. Our fund balance has grown substantially. I don’t want to sit here and handicap myself on a courthouse roof repair or doing new carpet in the courthouse or doing what needs to be done when I’m sitting on $2.6 million (in fund balance). That’s asinine.”
Pittman said the whole purpose was to ensure that the county’s current year budget remains balanced.