Warren County government is beginning budget discussions with a projected $1 million shortfall for fiscal year 2021-22.
Finance Department director Justin Cotten outlined the tough financial road ahead as the county Budget and Finance Committee began the process to review proposed departmental budgets for the upcoming fiscal year.
“You know we have a 10% threshold for our fund balance at the end of the year,” said Cotten, of the state’s requirement that the county’s ending fund balance be 10% of its annual expenses. “We have to budget accordingly so that we have 10% of our annual expenses left at the end of the year. As we have it set right now, no changes, the general fund will finish $1 million shy of our 10% budget threshold, if we don’t change something.”
The county’s projected ending fund balance for June 30, 2022 is $975,220. However, the state requirement is $1.98 million, which is 10% of expenses.
Cotten suggested the county change its property tax collection ratio, an accounting procedure that estimates how much of the property tax revenue will be received in the upcoming year.
“For the last five years, the average on collections is 94.8% of total tax levy,” said Cotten, with 5.2% being uncollected debt. “We budget 91% collections, but we average 94% collections.”
Cotton suggested changing the projected collection ratio from 91% to 93%. According to records, the county dipped below 93% on its property tax collection efforts only once since 2005 and that was in 2008 during the recession.
“I would strongly recommend we reset the collection ration to 93%,” said Cotten. “That still gives us 1% above our historical collections but it also throws $350,000 back into the tax roll that we are, basically, not having to come up with some other way.”
The adjustment would not be a change in the property tax rate increase. It would only change how much the county estimates it will receive versus how much will be uncollected debt.
Budget and Finance Committee members agreed to consider the change as the review process continues.
“The $1 million deficit that we would have under our 10% minimum in the general fund is with all budget requests this year,” said Commissioner Scott Rubley, chair of Budget and Finance. “Those include requests of pay raises, expenses, expenditures, everything. Depending on what recommendation we make on the budgets that could be a lower number.”
Committee members did unanimously approve removal of any salary increase requests within the proposed budgets even before the review process begins.
“We’ll consider raises at the end when we see where we stand,” said Rubley.
After an initial review Tuesday, the largest slash was $25,000 to Juvenile Services. That $75,000 fund is used when juveniles must be housed during criminal proceedings.
“This is where we pay for the detention of minors while awaiting trial,” said Cotten. “We are sitting at $75,000. We were at $50,000 two or three years ago. We had to increase it due to that single trial that had multiple defendants in it that had to be housed. This year we’ve only had one or two with short stays.”
Members unanimously approved reducing the amount to $50,000 from $75,000.
The $25,000 cut did little to change the bottom line.
The county Budget and Finance Committee will meet again April 27 at 5:30 p.m. Members plan to tackle a few of the more challenging budgets, said Rubley. Making that list were County Executive, Personnel Office, County Attorney, Election Commission, Register of Deeds, Codes, County Building, Other Facilities, Other General Administration, County Coroner, and EMS.