WINTON – Drastic times call for drastic measures.
Starting off the budget planning process for the 2018-19 fiscal year with a near $1 million hole to fill, Hertford County Manager Loria Williams said there are numerous options on the table as she, the department heads, and the board of commissioners get down to the “brass tacks” of building a budget.
In her budget message to the commissioners at their regularly scheduled meeting on Monday night, Williams recommended a General Fund budget of $25.22 million. That represents an approximate $4 million (13 percent) decrease from the current year’s operating budget of $29.04 million.
“About this time last year we started taking heed of revenues and expenditures,” Williams said on Monday night as she opened her near 45-minute presentation. “We tasked our county departments to take a long look at their individual budgets to find ways to save money. The DSS Director and the DSS Board worked with us as well in looking at their expenditures and ways to save.”
Williams calls this budget planning process as “challenging, but I’m confident with this budget I’m proposing that even with the cuts they will not negatively impact the services this county offers to its citizens or to the operations of county business.”
To find cuts, Williams recommends a three percent reduction, across the board, in operating funds for all county departments. She also offered a reduction in force option by not filling 12 positions that are currently vacant, the majority of which are administrative.
Other cost-cutting proposals include employee participation ($25 per pay period) in the county’s health insurance plan. Currently, the county pays 100 percent of the health insurance premiums of its workers. Williams noted this proposal will save the county $100,000 per year.
“Right now, health insurance costs the county $7,515 a year per employee, and it’s not going down,” Williams observed.
Also on the table is the privatization of CAP (Community Assistance Program) offered through the Department of Social Services, currently staffed by three workers.
Another cost-saving measure is a one-year suspension of all funding the county provides to local non-profit entities.
As for county workers, the proposed budget does not include a cost-of-living pay raise, but it does maintain the traditional longevity bonuses. The proposal also assumes an obligation by the county to cover the costs of the Retirees Health Plan for the soon-to-be defunct Hertford County Public Health Authority.
The best bit of news for county taxpayers is that the proposed budget maintains the current 84-cent tax rate (per $100 of property value).
“We still have some tough decisions to make; this may be your most challenging budget to put together since the national economic downturn of 2008-09,” Williams told the commissioners.
Her proposal notes decreases in Human Services (down by roughly $1.5 million from the current year, with one million of that decrease attributed to the loss of programming services now being administered by the state rather than locally), Education (also a $1.5 million decrease), and Public Safety (down by $600,000).
The only departmental increase in the proposal is for General Government (up by approximately $1 million). Williams said that increase is needed to replace a 30-year-old Tax Assessment/Collection computer system.
As for the $1 million hole to fill heading into building the new budget, Williams said $300,000 of that was having to redirect that amount from the General Fund into the School Capital Reserve Fund due to a new interpretation of the Unrestricted State Sales Tax.
“That automatically leaves us with $300,000 less in our General Fund; we have to do what is required by state statutes,” Williams said.
The remainder of the $924,000 shortfall is attributed to a $150,000 reduction in vehicle taxes collected from prior years and the utilization of $474,000 of appropriated Fund Balance.
“When it rains, it pours,” Williams noted.
When asked about the Fund Balance currently available for appropriation, Williams said it stands at a shade over $3.1 million. That still represents 12 percent of annual operating expenses, but Williams stressed over that amount.
“(Fund Balance) has been as high as $4.2 million; this $3.1 million now is the lowest I’ve seen since my tenure here as county manager,” she said.
Williams is not proposing any increases in user fees for county water and sewer services. However, there is a proposed increase in tipping fees for Solid Waste.
“We’ve got our work cut out for us this year,” said Commission Vice-Chairman Bill Mitchell. “We can go with our manager’s recommendations that keeps the tax rate at the current 84-cents or we can do something different, and that would require either raising the tax rate or drawing more from our fund balance. And we can see where our fund balance is right now.”
The Commissioners scheduled two budget work sessions (May 29 and June 4). They voted to hold a public hearing on the 2018-19 budget at 7:15 p.m. on June 18.