Budget challenges

MAYVILLE — Chautauqua County is facing a $21 million deficit in 2011. Were there to be no change going into next year, the county’s property tax rate would be jumping by $4.15 — taking the rate from $8.18 per thousand dollars of assessed valuation to $12.33. However, as proposed by County Executive Greg Edwards, the 2011 county budget includes a much smaller tax hike. Presented to the County Legislature on Wednesday, the tentative budget includes a tax increase of .74 cents — which would take the tax rate to $8.92. Edwards addressed the rest of the deficit through savings realized from early retirements, the elimination of eight employees, changes to some services and by using nearly $11 million from fund balances and reserves. Specifically, as proposed by Edwards, the 2011 budget will draw from three different places — $2,853,600 from the General Fund, $5,800,000 from the Post-Employment Benefit Reserve and $1,525,000 from the Capital Projects Reserve. GENERAL FUND Of the three reserves, the General Fund is surely the most well-known. It’s the fund from which the county took money to balance the 2010 budget. “We’re taking the same amount in 2011,” said Finance Director Darin Schulz. “That’s going to leave us at about a $3 million to $4 million fund balance. And it all depends on how we finish this year. And even though we’re three-quarters through the year, there are a lot of variables still that come into play on that.” CAPITAL PROJECTS The Capital Projects Reserve is a fund that can only be used for capital projects. According to Schulz, the $1,525,000 is for the county’s ongoing capital renovations to facilities — such as taking care of roofs, patching and other various work. “It’s going to be funding those capital projects, but, in essence, it is (going to address the deficit shortfall),” Schulz said. “It is in the sense that instead of using the investment earnings that we would normally use to fund those capital projects, we’re using the capital projects reserve. Using the $1,525,000 to address the deficit will leave the county with around $2 million in the Capital Projects Reserve. POST-EMPLOYMENT BENEFITS The Post-Employment Benefit Reserve is required by all governments. According to Schulz, it’s a designation of fund balance for post-employment liability. “In our case, that’s strictly for health insurance and for retirees,” Schulz said. “It’s highly recommended that you fund this liability. So, in other words, that you set aside money every year to pay for the inevitable expense of the retiree benefit. ... We have always carried approximately $6 million in designation for this liability.” However, according to Schulz, over the last five years, the fund has been built up to about $10.5 million. So, to balance the 2011 budget, Edwards has proposed taking approximately $5.8 million from the fund. Schulz acknowledged that taking money from the funds is only a one-time fix, but explained that, with the current economy, the other option of a 10 percent tax increase “would have been awfully devastating to people.” Still, Schulz said that the 2011 fix really only “postpones the inevitable.” “We still have a lot facing us next year,” Schulz said. “So this was kind of a compromise between a large tax increase and the use of fund balance.” OTHER MONEY In addition to the three big accounts, a total of $500,000 will be taken from the Highways fund and $250,000 will be used from the Road Machinery fund. According to Schulz, each year, inevitably, the county doesn’t complete all the projects it set out to do during the summer. So, this year, instead of returning the money not used to the fund balance, the county will use that money to address the budget shortfall. “This was a really good summer, so we’re not going to be returning as much to the fund balance,” Schulz said. “But in some (years), like two summers ago, when it was very rainy, we couldn’t complete all our projects. So that money has to stay in the Highways and Road Machinery funds.” OTHER FUNDS With the proposed 2011 budget taking money from two areas which weren’t touched in 2010, the question is begged whether there are other funds or reserves the average taxpayer doesn’t know about. According to Schulz, no. “That’s pretty much it,” Schulz said. “All the rest are strictly reserves for certain purposes and that’s it.” NEXT STEPS The County Legislature will now take a week to digest the proposed 2011 budget before beginning their deliberations. The next public discussion of the budget will be Monday, Oct. 4, when two budget meetings are scheduled. At 9:10 a.m. that Monday, the legislature’s Audit and Control Committee will meet with Public Facilities. The Audit and Control committee members will then meet with the Public Safety Committee at 1:15 p.m. The Audit and Control Committee oversees the entirety of the legislature’s budget review process, meeting first with fellow committees and then department heads. Following the week’s meetings, the Audit and Control Committee balances the budget with any changes made by the committees. Administrative Services will meet at 9:10 a.m. on Tuesday, Oct. 5, with Planning and Economic Development scheduled for 9:10 a.m. Wednesday and Human Services scheduled for 11:15 later that morning. On Friday, Audit and Control will call back department heads and make any budget changes necessary to balance the budget. The full County Legislature will then meet at 6:30 p.m. Wednesday, Oct. 27 to vote on the 2011 budget. Comments on this article may be sent to editorial@observertoday.com