Dealing with shortfall

County Finance officer David Clack addresses requested budget items, as assistant county manager Susan Holder listens.

Board of Commissioners Chairman Billy Lockamy and Commissioner Sue Lee engage in discussion during a pre-budget session earlier this week.

As budget time draws near, the county is facing a $3.5 million shortfall with which commissioners will have to deal during deliberations — at least one commissioner is confident those talks will not extend into July as they have the past three years.

“Right now we do have a deficit … of about $3,537,712,” said finance officer David Clack, during a pre-budget work session earlier this week. “Our requests exceed our revenues right now. (It would take) almost a 9 cent increase to fund the requests as they came in.”

The budget requests include net increases of $250,210 for Clinton City Schools and $661,310 for Sampson County Schools due to a per-pupil funding increase of $70 (8 percent) — the county currently pays $880 — to $950, an amount included in the requested budget for both schools. The county schools requested that $950, while the city schools requested $1,050, the cost of which would have been an additional $1.17 million when applied to both systems.

The Sampson Community College capital outlay request is $1,990,236 above the funded amount in the current fiscal year, with the total net tax support of the 2015-16 request standing at $2.53 million.

“That also includes all the improvements recommended by the community college with the exception of the new building,” said County manager Causey, “which is about $2.5 million.”

Commissioner Clark Wooten said he knew it was important to replace the roof at the Agri-Expo Center — the board-approved cost of $450,000 was included in the 2015-16 budget request — and while praising Sampson Community College for what it offers and officials for giving commissioners a full look at their needs, suggested holding off on the majority of the additional capital outlay request.

“They were asking for the HVAC unit and a shell for one of their buildings,” said Wooten. “As an effort to mitigate that $3.5 million (shortfall) … let’s consider giving them that, and ask them to hold up on the rest of that request.”

Clack said that would would amount to slicing $2.2 million from the current request, leaving the county a shortfall of about $1.3 million. Causey said outstanding requests such as the community college’s could be considered as part of the following year’s budget, with money continually saved for capital reserve needs.

“I don’t think any single group in here,” Causey said, referring to the number of department heads and school officials in attendance at the work session, “would want to be thought of as contributing significantly to a significant tax increase. From my discussions with all of our partners, I think as long as we’re making some reasonable effort to move the ball forward … I think you’re going to find a lot of receptivity.”

Even if the cut was made to the community college’s request, the additional “$1.3 million has to come from somewhere,” Wooten said.

“This is the reason we’re here, to go over some ideas and suggestions we have,” Board chairman Billy Lockamy. “We need to give the county manager some direction.”

The bulk of the suggested cuts came from Wooten.

Among other actions, he proposed closing both the recreation department, whose $655,737 budget for 2015-16 would receive $610,952 from taxpayers, as well as the county’s Transportation Program, set to receive $214,040 in taxpayer dollars in 2015-16. He also suggested reducing the Agri-Exposition Center’s requested $305,358 budget by an additional $72,000, as well as deducting $100,000 from the library system’s $715,126 budget.

No actual cuts were made to the requests, although board members did express their desire to see no tax hike.

“It would be my goal to leave here having given some direction where we can come up with something,” said Wooten. “I know each one of our goals is not to end up here at the last minute.”

The Sampson Board of Commissioners has been unable to adopt a budget before the June 30 deadline each of the past three years, an interim plan put into effect for each budget. The board threatened to adopt a second interim budget for the current fiscal year (August 2014) but were finally able to reach a consensus at the end of July.

Lockamy said it was also his hope that would not occur as it has in recent years. Commissioner Albert Kirby said he did not feel it would.

Kirby shared apprehension with making sweeping cuts to budget requests, noting he did not want to commit to cutting one department now without an idea of how others would be affected.

“My concern is when you start speaking about one department versus another, it is kind of early to shoot down what one says at the beginning — then all of a sudden you’re taking more from one and less from another that deserves just as much taken from them,” Kirby remarked. “It’s clear to me there needs to be some cuts made, but to pick any one group now and have them thinking in one direction, is a little too early. In my mind, everybody needs to be looked at.”

Causey said the pre-budget session was meant to eliminate some “major discussion items” from consideration in this upcoming budget, so that deliberations in June can be narrowed as much as possible. Clack echoed that.

“Anything direction we can get here, especially with these larger numbers,” he said, “the departments can go ahead and work those items out and know how they’re going to affect them.”

“I think we all agree that we want this budget approved and ready to go in a timely manner,” said Commissioner Sue Lee.

Kirby said he did not feel getting a timely budget would be an issue this time around.

“As long as everybody is healthy, I don’t think there’s going to be a delay,” Kirby pointed out. “The last budgets we had snags on were because we had illnesses and we had four commissioners. Really. If Mr. (Jarvis) McLamb was healthy there would’ve been a budget. If Commissioner John Blanton would’ve been healthy, there would’ve been a budget. As long as there are five of us here, I don’t think there’s going to be an issue with this taking long. The question will be whether or not you’re going to be able to live with your vote.”

He asked whether Causey realistically felt optimistic that the county could come up with a budget that included anything less than a 3 to 4 cent tax hike. The current budget included a 4.5-cent hike to 83 cents per $100 valuation.

“This actually looks better to me than what I thought,” Causey noted of the $3.5 million shortfall. “I have a little bit of cautious optimism. I won’t say we won’t squeak a couple of people in a couple places, but things seems to be turning. I expect that at the end of the (next) four years, all of us will be looking back with a smile. That doesn’t mean we’re not going to make some changes in how we do business, and we will always have challenges, but I think we have the potential to resolve a lot of our issues.”

Following up, Kirby asked whether that optimism would be accompanied by the use of fund balance.

As in previous years, Causey and Clack noted, fund balance would be appropriated to balance the books with the idea that not a penny would be touched.

“We will appropriate it with the understanding that we intend to save everything we appropriate,” said Clack. “We intend not to spend it.” Through lapsed salaries and things like that, we can save that money each and every year. We do everything we can to keep from spending that $1.8 million.”

The budget will be further discussed at the board’s May 4 meeting, at which time County manager Ed Causey is expected to inform commissioners when his proposed budget will be ready.