Effingham County commissioners likely will adopt a smaller budget for the current fiscal year — and stick to their vow not to raise the millage on county property owners.
Commissioners held a workshop Tuesday night to review the proposed budget for the 2012 fiscal year. As it stands, the county’s budget for FY12 is $27.05 million, a reduction of nearly $1.8 million from the FY11 budget.
“We’re very close to numbers we would have seen with the budget for 2006,” County Administrator David Crawley said.
County staff also was instructed not to use fund balance to help balance the budget and, Crawley said, they tried to maintain the level of service county residents receive.
“We have maintained our current level of service, as best we can,” he said. “We have not used fund balance for the general fund. We maintained the current millage rate. We have restructured to reduce staff.”
Commissioner Vera Jones said commissioners, across the board, did not want to up the millage rate from 8.558. Jones and the other commissioners also praised the county staff for its work in preparing a budget under heretofore unknown circumstances.
“The budget committee has been working on this for several weeks,” said Commissioner Vera Jones. “It’s something I’m very proud of. Quite often, you don’t find six representatives who agree on the same things.”
“I think y’all did a great job,” said Commissioner Bob Brantley. “I really do.”
The fiscal year began July 1 but county staff was delayed in preparing as they attempted to reconcile the budget with the new financial demands of the recently-approved service delivery strategy with the cities. There also were early retirement packages and a new way of presenting the budget Crawley was pushing.
“We appreciate your patience,” Chairman Dusty Zeigler said, noting how long it took to put the budget together. “I think you did a fantastic job.”
Zeigler also said there’s about 3 percent to 4 percent more he’d like to trim from the budget.
In his opening letter at the start of the 131-page budget, Crawley outlines the goal of the commissioners to maintain available funds equal to 15 percent of the budget in order to allow the county to meet its financial obligations. Doing so gives the county reserves for emergencies and cash flow during months when property tax receipts are slow.
“We are pleased to report that Effingham County continues to be in good financial condition despite a depressed economy,” Crawley wrote to commissioners.
After conversations with board members, county staff approached preparing the budget that:
• did not increase the millage
• did not include cost-of-living adjustment raises
• did not include merit pay increases
• restructure departments and staff based on service delivery agreements
• examine user-based fees
• have no increase in medical insurance premiums
• adjust revenue to account for the decrease in impact fees
• maintain level of service
• balance the budget without using fund balance
“Our goal was to present to the board a balanced budget under all those assumptions,” Crawley said. “We have that in this case.”
Crawley added they have taken a conservative approach in projecting revenues for the fiscal year. They have estimated taking in less in property taxes than last year, even as the millage remains the same, because of the loss of value in the tax digest.
“This is approximately a $200,000 decrease in our general fund revenues,” Crawley said.
Current economic conditions also led staff to projecting taking in less in local option sales tax and special purpose local option sales tax than last year. The county is projecting to take in 93.5 percent of the penny taxes it took in last year.
The county tax digest has shrunk as a sharp decline in housing starts and home and land sales has coupled with an increase in foreclosure rates.
Property tax receipts account for 51.77 percent of the county’s general fund revenue and sales tax, through the LOST, account for 22.17 percent. The county has taken in approximately $14 million in property tax each year from 2005 to the current fiscal year.
Sales tax revenues from gone from approximately $6 million to nearly $8 million and back down to the $6 million range from 2005-12.
The county was projecting to take in less than $6 million in sales tax last year but actually exceeded that amount. In all, the county is projecting to take in 3.9 percent less in revenue from FY11.
“Sales tax is up and down,” Crawley said. “Property taxes are our largest, most stable source of revenue. LOST is directly impacted by performance of the economy and as such, we have budgeted conservatively.”
The intricate service delivery agreements led the county to remove some of its operations from the general fund.
“We shifted some of these departments into special service districts,” Crawley said. “We can make sure we are funding those through fees for those services.”
Among its expenditures, 68 percent is directed toward personnel, with 13 percent going to purchased services and 12 percent to supplies. The county also has reduced its workforce from general fund operations by 25.8 full-time equivalent positions, Crawley said, and six positions were shifted to the special fund category. Thirty-two employees were eligible for early retirement, and 13 accepted.
Staff reductions also came through restructuring various departments as part of the service delivery agreements and attrition.
Of its departments, public safety receives the lion’s share of the expenditures, getting 44 percent. That equates to approximately $11.755 million. The county’s spending per capita is at $518 per person, with about $225 of that going toward public safety.
Some departments have had their general fund budgets greatly reduced. The development budget is down almost $1.99 million from the previous year.
“We’re removing the majority of that department from the general fund,” Crawley said. “We’re reducing the amount of general fund dollars we’re spending on roads. We’re going to rely heavily on SPLOST for those capital improvement projects.”
As a result of the service delivery strategy settlement, public buildings’ portion of the general fund budget has been chopped by one-third, from just over $750,000 to $507,000. The county also is spending about $130,000 less on the prison. Department 51, which includes such things as Veterans Park, Victim Witness and the Library, is seeing its bottom line rise nearly double, from $660,000 to more than $1.325 million. The increase is a result of the payments to the three cities for their recreation and roads, according to the service delivery agreements.
The county’s portion of the library budget, cut to $284,450 for last year, is going up to $464,450 for the pending fiscal year. The school board, Crawley said, is not funding the library and the county and the school board worked out a deal to absorb library funding in exchange for two new school resource officers.
The service delivery strategy resolution also has led to the creation of some new departments, such as senior citizens activity, and the merging of others, with a new inspections and zoning office. Those are part of special fund categories and not general fund operations.
The special fund, which covers sanitation, the fire department, water and sewer services, has a budget of $27.73 million. No general fund will be used to cover it, though $12.4 million in fund balance will be used to cover the special fund budget.
Commissioners will hold a public hearing July 19 at 7:30 p.m. on the budget and have schedule to adopt it and the millage rate for the coming year on July 26.