‘Serious’ budget crisis in countyPublished 10:42pm Tuesday, February 26, 2013
Decatur County commissioners may soon have to make some difficult decisions about their budget, after receiving dismal news at their Tuesday meeting.
County Accounting Technician Michelle West told commissioners that the county could end up facing a $2.4 million budget deficit by the end of the year.
West said the forecast was based on projected cash flows and expenditures between March 2013 and December 2013. During that time period, projections call for total expenditures of $18.8 million but only $16.4 million of revenue.
To make matters worse, the county’s cash balance is dwindling. To start March, the county is expected to have a cash balance of $123,266. By August, that balance could drop to $825.
To make ends meet last year, the county had to take out a $3 million loan from Port City Bank in June 2012. The loan was a Tax Anticipation Note — as allowed for by state law — in which the county borrowed money with the intent of paying it back with receipts from property tax. The county did pay off that TAN loan in full in late December.
However, based on the projections of a deficit, county officials will possibly have to take out another TAN loan this year.
County Administrator Gary Breedlove held a meeting last week with all of the county’s department heads and constitutional officers to discuss their budgets.
“It appears as if we have been overspending our revenues by about $2 million to $5 million per year for the past six or seven years and we’ve just run out [of reserves],” Breedlove said.
The county administrator suggested county commissioners consider a three-phase approach to ending the continuous budget shortfalls:
• Save $300,000 in spending that was originally budgeted for the 2012-2013 budget year that ends June 30. Breedlove said that was already under way. For example, a planned purchase of $4,000 in equipment for each of the county’s nine volunteer fire departments was put on hold.
• Breedlove said he asked county department heads to come up with a plan for how they would cut five percent from their budget and how they would cut 10 percent, if necessary. He warned that cutting 10 percent from each department could result in having to lay off employees.
• Consider increasing the county’s millage rate, which is currently 9.66 mills, by an additional one to two mills.
Breedlove said the budget shortfalls would be prolonged over several more years if county commissioners took his first two suggestions but didn’t raise its millage.
“Our millage rate is lower than all of the adjacent counties’ rates by at least two mills or more,” Breedlove said.
Breedlove said the projections didn’t account for any unexpected costs that could arise.
“I don’t think our citizens will be quite as upset if they see that our departments are doing all they can to cut their budgets,” Commission Chairman Smith said. “I think citizens feel like they have been taxed to death, so I’d like for [a millage increase] to be a last resort.”