MAYVILLE - "I had to look at the numbers twice to make sure I had them right."
That's how Kitty Crow, county budget director, describes her initial reaction to realizing a $10 million net variance in the 2011 county budget.
For Greg Edwards, it was a little more emotional. The county executive said he almost fell out of his chair when told the county's fund balance would be gaining a double-digit boost.
Through reconciliations and adjustments, the county is looking to gain approximately $10 million from its 2011 budget. The money, which comes from a variety of sources, was a surprise to many working in Mayville.
However, don't expect that money to help ease the county's 2013 projected budget deficit of $14 million.
Hoping to explain the windfall and its implication in next year's budget, Edwards discussed it with Crow; Susan Marsh, county finance director; Christine Schuyler, commissioner of human services; and Steve Abdella, county attorney, during a recent meeting.
"If these were recurring revenues then the decision would be much easier."
BREAKING IT DOWN
In total, the county is expecting to see a net variance of $10.13 million. Crow, however, stressed that number is unaudited, preliminary and subject to change.
Edwards said the variance is the result of "numerous factors" that resulted in a surplus. He noted that many of reconciliations were unexpected, and therefore, were not budgeted in 2011.
"A number of factors completely beyond our control all of resulting in" the surplus, Edwards said. "I'm not complaining at all about a $10 million move to the plus side."
The county will receive almost $3.8 million dollars in deferred revenue adjustments to the Department of Social Services. Crow said the county receives deferred revenues every year, usually in the amount of $1 million for every fiscal year the state reconciles.
The county receives the DSS payments in advance, however, until the state reconciles it's fiscal year, the deferred payments cannot count toward the county's budget.
This year, Crow said, the state reconciled its 2006-07 and 2007-08 fiscal years, which resulted in two, higher-than-usual, deferred payments.
"I think it's the first time we have seen a two-year roll-out," Edwards said. "That was a dramatic change from what we've experienced historically, and a significant reason we're looking at a surplus."
The county also received an adjustment from the state in the amount of $230,000.
Other notable variances include:
$996,194 for canceled encumbrances for open purchase orders.
$1.4 million in real property taxes, and $876,000 in sales tax over-runs.
Edwards said the sale of Peek'n Peak ski resort in French Creek helped push up its property tax line due to collections of past taxes and penalties.
$1.5 million for federal Medicaid assistance. Edwards said the state held back roughly 10 percent of the assistance until unemployment data had been collected and audited.
As he did during an Audit and Control Committee meeting last month, Edwards stressed the $10 million would have little-to-no effect on the 2013 budget process.
"We're going to have to be very cautious here," Edwards said. "I'm encouraged that we can make decisions based on how to deploy $10 million in revenues. We have a few things to consider."
Edwards noted that because the higher-than-usual surplus was from 2011 reconciliations, the county should not expect to see those funds recur in 2012.
That means in essence, any budgeted item that uses a portion of the fund balance next year would put the county into a hole for that amount the following year
"If these were recurring revenues then the decision would be much easier," Edwards said.
The county executive added that the 2012 budget calls for a $10 million fund-balance usage. The 2011 surplus, he said, simply refuels that fund.
"The reality is, we need every one of those dollars to remain in the fund balance if we're going to comply with state requirements with regard to where we should be with our fund balance," Edwards said.
Crow said a healthy fund balance should be 5 to 15 percent of total revenue; for Chautauqua County, a 5 percent fund balance would be approximately $11 million, while 15 percent would be around $33 million.
"You can quickly do the math and know we are nowhere near the minimum, much less have any concern with regard to exceeding what's recommended having in the fund balance," Edwards said.