Anything less than the tax increase of 9 cents recommended to commissioners in early June would defer necessary expenses and put the county firmly behind the fiscal eight-ball going forward, the county manager has implored.
County manager Ed Causey said cuts would usher in an era of “doing less with less,” a twist on the oft-uttered “doing more with less” credo of county officials in recent recession years. During the board’s budget workshop last week, Causey said staff and department heads would be ready to carry out the wishes of the board, whether it be a slightly decreased tax hike or across-the-board cuts.
However, those actions would have consequences.
The board was set to meet again Monday night to discuss budget, having already adopted a second interim plan for August. In recent weeks, a 5 percent countywide cut, a 5.25 cent tax rate increase and proposals in between have been put on the table, but no full budget approved.
The 5 percent reductions, carried out in practice to show impacts to the board, do permanently reduce expenditures but do not address the issue of long-term solvency, Causey said. It would ax 75 employees — 106 total positions with the additional elimination of 26 previously frozen positions and five funding partner positions — and save about 2 cents on the tax rate.
“The net result is a savings of $758,817 if all proposed reductions are implemented,” the county manager noted. “That doesn’t solve the problem. It’s going to take more than just tax cuts. Even if you get the budget down to zero this year, the pressure is still going to be there.”
Showing what his department’s 5 percent across-the-board cut would look like, Sheriff’s Jimmy Thornton explained that the Sheriff’s Office/Detention Center would suffer greatly, as would county revenues.
The 5 percent reduction on the Sheriff’s and Detention Center budgets, combined, would equate to nearly $500,000 in permanent cuts. However, those savings would create a revenue loss of $1.14 million, creating a net loss to the county of $640,851, “and will hamper the efficient and safe operation of the Sheriff’s Office,” Thornton noted.
The sheriff identified 9 personnel slots in the Detention Center and two Child Support enforcement slots for elimination under the potential 5 percent cut. With the loss of those jobs, critical issues would present themselves, including the closure of jail pods, reduction in revenues and reduction in Child Support efficiency.
“I cannot in good conscience recommend cutting enforcement positions that would jeopardize the general public safety in order to accommodate inmates from other counties for the sole purpose of generating revenue. Based upon the projected reduced staffing, we will have to close two jail pods,” the sheriff stated. “The reduction in available beds will require the termination of our out-of-county housing service and the Statewide Misdemeanant Program.”
That would lead to the reduction in $982,400 in jail revenues, while the Social Services reduction will equate to $157,488 in additional sheriff’s revenue, totaling $1,139,888, Thornton noted.
“The elimination of the two deputies, who focus solely on Child Support Enforcement efforts, will add additional workload to remaining personnel. The inability to focus solely on Child Support will lead to potential delays in service and enforcement of process. Although the Sheriff’s Office will make every effort to accommodate, an increase in workload and decrease in staff will always impact the quality of service.”
Causey said departments countywide were in similar predicaments. Despite savings, the cuts would have adverse effects on the county long-term.
The reductions do not address the capital reserve needs for approximately one-half billion dollars’ worth of buildings that the county is responsible for maintaining, he said. The General Fund balance of as of June 30, 2014 is expected to be less than 15 percent. While that is above the Local Government Commission’s requirement of 8 percent for county governments, it is less than the recommended 23-24 percent for counties of Sampson’s size.
“If planned expenditure reductions are not attained, this could continue to negatively impact the general fund and thus our solvency,” Causey stated.
He questioned the county’s capacity “to continue to absorb the unexpected without substantive long-term planning,” including formulating a plan to increase the General Fund balance over the next several years.
“Our financial pressures have been exacerbated by the fact that previous boards did not ensure the full repayment stream needed to retire approximately $140 million of debt. Moving forward, it is hoped that we can begin to recognize and act on the needs of ensuring our long-term solvency and not further complicate the financial challenges for future boards. The action to date to reduce the proposed 9 cent tax rate to 5.25 cents basically defers expenditures in lieu of permanently reducing expenditures,” the county manager said.
“It is unfortunate that moving forward, the potential loss of permanent positions this year and the adjustments … if enacted, will not significantly reduce the financial pressures facing the county based on current economic conditions and changes in future revenues,” Causey said.
Solid waste host fees are already projected to decline by $267,000 beginning July 2015.
Staff, funding partners and department heads “understand that Sampson has reached the point where we will begin doing less with less,” Causey stated.
“We acknowledge the effects on customer service will be very challenging as a number of departments proposing personnel reductions are actually in need of adding personnel. With your continued understanding, acknowledgement of reduced services and support, we will endeavor to minimize the effects on customer service,” the county manager said, addressing the possibility of a looming 5 percent cut.
However, it remains to be seen whether that will be the course of action, or some tax hike. Commissioners said little during their last meeting to give a hint as what would come out of Monday’s session. Funding partners and department heads said they did not know what to expect.
One commissioner, prior to a vote to ultimately decline the proposed 2014-15 budget with a 4.5 cent tax increase, expressed his own concerns with a system he felt was not sustainable. He did say the other extreme, a 5 percent cut, was likely not the right course of action.
“Sometimes I get the feeling certain county employees think I’m against them,” Commissioner Albert Kirby remarked. “I am not against any of the employees. I think they work diligently and they work hard. The truth is we don’t have the resources to do what is being proposed. If we continue to put the burden on the taxpayers, the system will break. I’m against a 4 cent tax increase. I have to admit, I would not have voted for a 5 percent across-the-board (cut). That’s not the answer either.”
Chris Berendt can be reached at 910-249-4616. Follow us on twitter @SampsonInd.