Commissioners have to choose between deficits, cutting services
In order to move ahead with a tax cut, Union County commissioners have to decide what services they’re willing to reduce or do away with.
County manager Cindy Coto outlined the current scenarios during a budget worksession Monday, Feb. 20. If the county stays at status quo, with no additional staff, no raises or increased budgets, Union will see a shortfall of more than $50 million over the next five years. By reducing the county’s fund balance or bank account by one percent, from 16 to 15 percent, it would add $6 million each year, reducing that deficit down to around $21 million.
However both of those scenarios were based off the current tax revenue, without implementing the property tax cut commissioners said they wanted to do earlier this year. With a tax cut, commissioners will have to decide what services stay and what goes.
“Regardless of what direction you go, there has to be a tax cut of some level,” county commission vice chair Todd Johnson said. “I’d love five cents, (but) it’s probably not achievable. I’d like to see some form of tax cut.”
In terms of services, Johnson said he felt the county should look at the services it provides and determine if they can scale things back, in the current economy.
“Looking at the services we provide, are they mandated and are we providing them at the mandated level?” Johnson asked. “If it is a service we are mandated to provide, if we’re providing it at an elevated level, let’s look at the part we’re providing over and above the mandated level. Those would be the first things we would look at giving up.”
Coto explained that the county did that in budget discussions last year, pointing out the reduction in the county’s partnership with the Charlotte Area Transit System. Coto also said that staying at status quo was not possible, without a serious impact to residents.
“My professional opinion, I don’t know that (the status quo is) terribly feasible,” Coto said. “Right now we have a wait time in our (Department of Social Services) of approximately 40 minutes. That would increase without some additional staffing.”
Without additional staffing, Coto said, the higher call volume for sheriff’s deputies would mean an increase in response times. Also the current wait time for a response from Veterans’ Services is two weeks on average, Coto said. Without additional staff, that would increase as well.
Staying at the current status quo would also mean not purchasing any equipment, Coto cautioned, despite the fact that the county’s data storage systems, telephone systems and backup systems will need to be replaced by 2014.The county’s tax software has to be replaced by 2014, as it will no longer be compatible with the state equipment and the voting machines will also have to be replaced by 2016 for the same reason. Tax software costs $2.4 million, while new voting machines will cost the county $4 million. Additionally, the county fleet of vehicles has several cars with 150,000 miles on them, while parks, libraries and other buildings need to have maintenance now, to avoid larger repair and replacement bills later on. The county is currently facing a backlog with residential and commercial inspections, Coto said. That would likely increase as well without more staff, she added, causing longer delays for projects to be approved.
Impact on fire departments, schools
Commissioners also questioned as to what the future should look like, in terms of how the county funds fire departments. This year, Allens Crossroads had to receive an extra $39,413 from the county in order to meet budget, despite cutting more than $49,000 in expenses since 2008. Also Wingate’s department has seen its budget climb an estimated $60,000 since 2008. There’s also the question of what to do with the Providence fire department, which has also struggled for funding.
“In reading the fire study, it was interesting to go through each fire department and see where the most impacted structures would be in case of a fire,” county commissioner Tracy Kuehler said. “(There are) lots of churches in all of them. In Wingate, it’s all the dormitories and residences. All these entities do not and are not required to pay the (fire) fees. Do we need to include at least a discussion whether the whole community is willing to come together to fix that problem?”
Coto explained that she knew Wingate had discussed the idea with the university’s president, but had not been successful in securing more funding. Part of that reason, she added, was due to the fact that looking at the call volume, the department responds to very few calls actually at the university.
The five year forecast meanwhile offers no additional funding for the school district’s $110 million facility plan.
“That’s based upon the negotiations we had with them last year,” Coto said, explaining that school officials decided to split the funding cut from the county, taking part of it last year and the second part during this budget season.
Overall, Union County Public Schools would see no increase in funding from the county until 2014, where a 1.5 percent increase is allotted, then a 2 percent increase through the remainder of the forecast up to 2017.
“I have always believed that the county can’t be the catch-all for any shortfall,” Johnson said, adding that he wasn’t speaking about the schools directly or any one institution. “If the state cuts funding, we can’t be the catch-all. We don’t have the checkbook where we can just write the check.”
To address funding issues, Coto suggested that the county dip into its fund balance. State laws require counties to maintain at least 8 percent of their revenue in the fund balance, as a precaution. Union County currently operates with 16 percent in the bank, to keep a higher credit and bond rating. County staff members called the bond agencies, Coto said, and they were assured that a one percent drop wouldn’t affect the county’s rating.
Current projections show that if the county did dip into its general fund, that extra $6 million would be enough to balance the books and bring a $10 million surplus by 2017, rather than the current year to year deficits.
“There was a lot of discussion last year, in relation to the schools, (to use general fund dollars),” Kuehler said. “They asked us to do that last year and we adamantly said no”
The difference, Coto explained, was one of philosophy. David Cannon, the county’s former chief financial officer, believed it would be a problem, to dip into the general fund. Coto however sees it differently.
Commissioners agreed to have staff examine what impact a one or two cent tax increase would have on revenues, but couldn’t come to terms on if they would support it later this year in a vote.
“It’s difficult for me to say, go ahead and do a one percent reduction, without knowing what that will entail,” Kuehler said.
Fellow commissioner Jonathan Thomas added that he wanted to make sure the county wasn’t creating problems, before signing off on anything.
“I think we’ve got the responsibility of public safety and (a quick) 911 response,” Thomas said. “I want to make sure those critical services are not impacted by our good intentions.”
Budget discussions will continue over the next few weeks.