BUDGET
COMMITTEE
Special Budget Review
September 19, 2011
** NOT APPROVED **
Committee Members Present: T. Hopkins, D.
Fanton, D. Cady, P. Curran, K. LaForge, T. O’Grady, C. Crandall
Call to Order: Budget
Committee Chairman
2012 Preliminary Budget
County Administrator/Budget Officer
John Margeson stated that a week ago, the tax levy required to balance the
budget stood at $31,034,257. Since then
Mr. Margeson has amended the preliminary budget by either making cuts or
changes in revenue that have reduced the amount needed to be raised by real
property taxes by $1,169,400, so today $29,864,857 would be needed by the real
property tax levy to balance the budget.
Mr. Margeson stated that County
Treasurer Terri Ross has calculated the maximum allowable levy for 2012 based
on property tax legislation and exclusions that get factored into that which
are essentially any amount that exceeds 2 percent of the retirement bill along
with the differences in the pilot payments we received from 2010 to 2011. The pilot payment amounts make a very small
difference of approximately $7,000.
Based on where we are at and the maximum levy of $28,243,717 that can be
imposed, we would need to take $1,621,140 out of fund balance to get below the
2 percent property tax cap. It was noted
that these figures do not include any corrections or charge backs.
Budget Committee Chairman Ted
Hopkins requested Mr. Margeson to go through the $1,169,400 in changes he made,
and Mr. Margeson recited the following:
On
the Appropriation Side:
·
$25,400 was taken from various .1
accounts
·
A9030.803 (Social Security) was reduced
by $150,000
·
A9010.802 (State Retirement) was
reduced by $200,000
·
County Road Fund Balance was reduced
by $200,000
·
Road Machinery Fund Balance was
reduced by $100,000
·
Self-Insurance Group Fund Balances
were reduced by $75,000
·
Debt Service Fund Balance was reduced
by $50,000
·
A1171.430 (Assigned Counsel) was
reduced by $25,000
·
A1450.419 (Elections-Printing) was
increased by $6,000
On
the Revenue Side:
·
A02.1809.00 (Repay Aid to Dependent
Children) was increased by $25,000
·
A07.2690.00 (Tobacco Settlement) was
increased by $25,000
·
A08.2701.04 (Refund Prior Year
Expenses-Medicaid) was increased by $50,000
·
A11.4615.00 (DSS FFFS) was increased
by $250,000
The
above can be summarized as follows:
Real
Property Tax needed as of September 12, 2011 $31,034,257
Budget Officer Adjustment to
Tentative After September 12 $
1,169,400
Real Property Tax needed as of
September 19, 2011 $29,864,857
Maximum Allowable Levy for 2012 $28,243,717
Amount Needed from Fund Balance to
Stay Within Cap $ 1,621,140
Legislator
Legislator Timothy O’Grady stated
that without any cushion, our fund balance is not going to be as rich as it has
been in the past. It sounds like
everyone wants to use the fund balance to balance the budget, but we won’t have
a balance at the end of the year like we have the last few years so it will run
out quickly. We really need to budget
leaner. Legislator Dwight Fanton stated
that our Sales Tax Revenue should be about $1.35 million higher than budgeted
so that would make up for what we are taking out of fund balance to balance the
2012 budget. Legislator Philip Curran
stated that you can’t plan on that growth.
Treasurer Ross talked about needing
to make some adjustments to the 2011 budget for the contract settlements;
however, there was money put aside to make these adjustments.
Tentative Assessed Value
Ms. Ross stated that Real Property
Tax Director Steve Presutti informed her that the tentative assessed value is
$1,671,499,079. This figure represents a
$43 million increase over last year’s figure of $1,628,184,581.
Tax Levy Cap
Ms. Ross distributed copies of a
spreadsheet (attached to original minutes)
regarding the tax levy cap and associated calculations as follows:
Levy Using CAP 2.6%
Balance to be Raised by Real
Property Taxes = $28,243,717 (2011 figure =
$27,527,083). This
would result in a $716,634 increase in levy over the previous year, and a .01
decrease in the tax rate per thousand.
Average County Tax Rate = $16.897237549
(2011 figure = $16.906610787). This would result in a 2.60 percent increase
in the tax levy, and a .06 percent decrease in the tax rate.
County
Taxable Assessed Value = $1,671,499,079 (2011
figure = $1,628,184,581). This represents a
$43,314,498 increase in taxable assessed value.
It
was noted that the total 2012 preliminary budget calls for appropriations of
$113,288,688 which represents a decrease of $10,132,769 from the 2011 budget of
$123,421,457. There was a corresponding
decrease on the revenue side as most of this decrease was because of the way
food stamps are now being processed.
Levy as of Now –
Over the CAP
Balance to be Raised by Real Property
Taxes = $29,864,857. This represents a
$2,337,774 increase in the levy over last year, and a .96 increase in the tax
rate per thousand.
Average
Levy with 0%
Increase
Balance to be Raised by Real
Property Taxes = $27,527,083. This
represents a .44 decrease in the tax rate per thousand.
Average
As we stand right now, it would take
$2.3 million for us to get to a zero percent increase.
Comments Regarding
Cap
Legislator Philip Curran stated that
if we have the same situation next year, we will have to cut people because there
won’t be a lot of other things like machinery to cut.
Chairman Curtis Crandall stated a
number of years ago, the Board created a tax stabilization fund with the
tobacco money, and we funded it briefly.
The point was to put money away to even things out in hard years. We are using the “piggy bank” now, but this
scenario can’t sustain itself, and we will eventually use all of the money up. Chairman Crandall talked about some of the
mandates and stated that hopefully the state will address some of the things
that are driving the tax rate up. Many
counties are in worse shape than we are because they don’t have a fund balance
to fall back on. Something has to give
on the upper level because we cannot continue to sustain things the way they
are.
Legislator Ted Hopkins stated that
if the Governor really wants to have the State open for business, there still
needs to be additional changes in what’s driving costs. The cap may end up being a good thing, and
hopefully we can ride it out for a few years.
We have to start lowering property taxes.
Treasurer Terri Ross stated that she
thinks this is terrible for the taxpayer.
They think their taxes are going to go down, and they aren’t. In addition, counties are so focused on
settling for the 2 percent cap, that they end up settling when they reach that
point, rather than looking harder to further reduce the budget.
Legislator Tim O’Grady asserted that
we should be looking at a combination of cuts and use of fund balance, noting
that last year we took almost $1 million to balance the budget, and this year
we are putting in $1.6 million. How long
do we go? Ms. Ross commented that it is
very difficult to recoup these funds.
Consolidation
Legislator
Payments on Courthouse Project
Legislator Doug Burdick asked about
the payments on the Courthouse Project, and Ms. Ross stated that our payment
will be $340,000 in principle and $772,000 in interest. Legislator Don Cady stated that if we were to
use our fund balance to pay off the Courthouse Project, we could save $700,000
in interest each year. Mr. Margeson
stated that he wouldn’t recommend doing that because we receive about $260,000
in federal money as an interest subsidy.
In addition, of the $700,000 in interest we pay, we end up recouping
approximately $500,000.
Budgeting
Legislator Dwight Fanton asked Mr.
Margeson where he could find another $500,000, and Mr. Margeson responded that
they would have to eliminate the Office for the Aging to find another
$500,000.
Legislator O’Grady stated that our
problem is with personnel. Although our
WIC Program brings a lot of money into the County, the personnel to run that
program are not free. The overhead of
the retirement fund alone is a huge expense. Legislator Curran agreed that the long-term
costs of personnel are going to kill us.
Legislator O’Grady indicated that if the County wants to maintain all of
the current services, they have to be paid for.
Legislator O’Grady believes it would be better to do a few things well,
than all of the extra things. We cannot
maintain services without raising taxes. Legislator
Legislator Ted Hopkins stated that
he believes it’s prudent to take the $1.6 million out of fund balance to
balance the budget at this time. It was noted that we currently have
approximately $15 million in our fund balance.
Legislator Fanton stated that we will have to look at services again
next year, but he is not in favor of cutting any services at this time. Legislator Philip Curran suggested that the
committee should ask the departments to cut their own budgets by a certain
percentage next year, noting that they would have a year to plan for it.
Chairman Crandall stated that there
is only so much that you can take out of operating expenses without looking at
programs. Chairman Crandall noted that we have already cut quite a few
positions. We can’t continue to operate state mandated programs.
Legislator
Budget Chairman Ted Hopkins asked if
all committee members were in favor of using $1.6 million from fund balance to
balance the budget. Legislator O’Grady
stated that he is against using fund balance.
Chairman Crandall stated that the committee can still make changes after
the Tentative Budget is filed. We are
still going to be looking at firmer figures and adjustments that need to be
made.
Investing in the Future
Legislator Mike Healy stated that
the single best thing we could do would be to invest some money in
Future Meetings
The Budget Committee meeting scheduled
for Wednesday, September 21, 2011, will be cancelled. There will be a special Committee of the
Whole meeting to review the 2012 Tentative Budget on Monday, October 24, at 9
a.m.
There
being no further business to come before the committee, a motion was made by
Legislator O’Grady, seconded by Legislator Curran and carried to adjourn the
meeting at 4:05 p.m.
Respectfully
submitted,
Brenda
Rigby Riehle, Clerk of the Board
Allegany