N’hampton Commissioners wrestle with budget

Published 9:35 am Tuesday, June 12, 2012

JACKSON – A balanced budget comes with a price this year in Northampton County as the Board of County Commissioners look at five cent tax increase and a reduction in force.

On Friday, during the board’s final budget work session, county leaders directed County Manager Wayne Jenkins to work in an employee health insurance premium in at a 90/10 percent cost share as well as a $225 bonus for employees.

Jenkins and Finance Officer Dot Vick are also calculating another budget scenario that would allow a 90/10 cost share and a two percent cost of living increase.

In addition to the five cent tax increase, the proposed $24.73 million general fund budget accounts for the reduction in force of five positions, keeps Northampton County Schools at the same current year funding at $3.5 million (minus the additional funds from last year’s mediation), supports a fourth additional EMS crew (going in effect Jan. 1, 2013) and provides funding ($116,000) to the Lake Gaston Weed Council.

During discussion on Friday, the commissioners wrestled with providing county employees with a two percent cost of living increase (a $216,493 cost) and, initially, reducing health care insurance costs to an 80/20 share.

At the beginning of the work session, Jenkins noted the $216,493 cost for the pay hike could come from a fund balance appropriation.

Commissioner Fannie Greene questioned what the amount in county’s fund balance was currently.

Vick said she didn’t have the amount, but last June it was 12 percent.

“The very best estimate that I can give you looking at the revenues that we expect to bring in and the expenditures we expect to make in June we will probably use $500,000 to $600,000,” she said. “But we budgeted to use $1.272 million.”

Commissioner Joseph Barrett questioned what percentage the fund balance would go down to.

Vick said percentage is calculated based on total expenditures, which is less this year versus 2011, and didn’t expect the percentage to go down, but if it did it would be one percent.

Greene questioned how much it would cost if the county did not reduce health insurance costs.

Jenkins said $151,000 of direct tax dollars.

Greene expressed concern over providing a pay hike and then seemingly taking it away with additional health care costs.

“To me that’s like we’re doing nothing here,” she said.

Greene questioned how an additional $151,000 would hurt the fund balance if those funds were appropriated to accommodate keeping health insurance at 90/10.

Jenkins said it would equate to approximately three-quarters of a percent. He added eight-tenths of one cent of additional tax increase could avoid that additional draw down on fund balance.

Jenkins cautioned that drawing down on fund balance too much could affect the county’s bond rating as a bond sale is pending.

“If our fund balance drops and there are not legitimate reasons that it drops to the bond market then the interest rate is likely going to increase on those bonds we sell,” he said. “So in essence if we drop the undesignated fund balance by (half of a percent), two percent, it could effect a quarter of percent or a half percent interest on $5 million on 38 years.”

After further discussion the commissioners noted that eventually they would have to address the cost share issue.

Barrett said there was “a bullet both ways” and sympathized with county employees. However, he said the budget has to be balanced.

“I’m not in favor of depleting the fund balance to the point that it could effect the bond rating because you’re not only spending money now, but you’re spending money later and increasing your cost,” he said. “The county needs to look at how long you can feasibly, at this day in time, can do 90/10. How many places have a 90/10 (cost share)?”

Greene said she agreed.

“I think we are going to have to address it,” she said. “But my point is that I hate to see us drop it on them this year. I think we need to cushion that blow if we can. Eventually it’s going to have to come, but I don’t think we have to do it this time—that cost of living and then the insurance—it bothers me.”

After further discussion, Jenkins suggested a $225 bonus to employees (a $65,024 cost) and keeping health insurance premium at 90/10.

“I think that would work,” said Commission Chair Virginia Spruill.

Barrett expressed concern over the bonus because it would be subject to retirement and taxes.

“I understand where Commissioner Barrett is coming from, but I think the proposal the County Manager put forth to us would certainly satisfy everybody,” Carter said.

Jenkins said before the commissioners decided on anything, to allow Vick and himself to bring back the best of both scenarios on June 18 during the public hearing for the budget.