Monday, October 15, 2012
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Finance continues to dominate discussions at county board of whole meeting

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[October 15, 2012]  Thursday evening after the public hearing regarding the issue of bonds for major criminal cases in 2013, the Logan County Board had its regularly scheduled board of whole meeting. The discussion of finances took up most of the meeting.

Chuck Ruben began a discussion of the county finances by making a motion to put the potential new fiscal year budget on the agenda for the reconvened board meeting Tuesday. The county board was presented with two plans for the 2013 budget. According to Ruben, the difference between the two plans, Plan A and Plan B, is if the bonds would happen. Plan A contains the potential bonds in the criminal court cases line item. Plan B does not contain the bonds.

Plan B was created in case the bonds will not be approved in time, if at all. Plan B would also not contain a contingency fund for future criminal cases. The downside of the backup budget is that in order to pay for the criminal cases line item, $600,000 would have to be transferred from other places in the budget.

In this instance, the money would be gathered by severely cutting the property tax levies to the health department, ambulance services, senior citizens services and Cooperative Extension.

Due to the drastic differences between the two plans, neither will be displayed until after the due date for a petition has passed. The due date is Oct. 25. If a petition with 1,453 signatures of registered voters is brought to the county by that date, the board will have to bring the bond issue to the next referendum if they wish to sell the bonds.

"We'll be continuing Tuesday night's meeting to the 25th. At that point, we'll be able to put one or the other budget on display. I don't think it's fair to put one budget on display and amend it off display; that would be a huge amendment," said Ruben.

Normally, amendments are made during the 30-day display window, but the amendments are usually just corrections or small changes. A change from Plan A to Plan B would be too big a change in that time frame for the board to be comfortable with.

On Oct. 25, the board will make a decision as to which budget to display to the public for 30 days. There will also be a special meeting in November to approve the displayed budget, including possible amendments.

On the topic of finances, Ruben commented that he had recently explained property taxes to some citizens of Logan County. He said that a lot of people have the opinion that county money is mainly property taxes. However, property taxes would make up only 18 percent of the county's budget in Plan A of the proposed new budget.

"Where it (property taxes) goes is just a tremendous number of different things," Ruben said.

He also recommended a change to Plan A. Previously, the finance committee intended to sell bonds in the amount of $1 million. After reconsidering their options, Ruben believes that $700,000 may be a more appropriate figure to try for. This would also cut the amount left over for a contingency fund down to $100,000, instead of the $400,000 before.

These figures work under the assumption that $600,000 will be needed to pay for major criminal court cases in the next year. Furthermore, should more money be needed, alternative revenue bonds can be sold under the county's authority for three years after they are initially issued.

Should bonds be sold in the amount of $1 million, yearly payments from the county would be $86,600 per year for 20 years, which includes a projected interest rate of 4.5 percent. If only $700,000 was needed, the payback rate would be $60,200 (again, with interest included).

Should the interest rate change, these figures will be subject to change as well. Ruben said it all depends on what the market looks like when they are sold.

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The other topic for discussion concerning county finances was a 2 percent increase figured in under the payroll line item for nonunion employees. Both plans include this adjustment. The figures work out to between $13,000 and $15,000 per percentage point.

Ruben clarified that this money will be distributed to officeholders in charge of payroll in their respective organizations and is at their discretion. It is not a straight 2 percent raise to all nonunion employees.

Ruben said he does not want to take the manager's abilities to manage their payroll away. "You could have an employee that deserves a 4 percent raise, and you could have an employee that deserves no raise," he said.

Board member Andy Anderson said he wanted to see a way to guarantee that the 2 percent adjustment goes to employee raises. "We voted to give them a 2 percent raise," said Anderson.

Ruben replied, "We voted in finance to include an increase to the salary line item in their budgets by 2 percent."

Last year, the county approved a flat 2 percent raise to all nonunion employees but then decreased the total budget of the agencies involved by 3 percent. This created situations where an agency would have better-paid workers, but their financial ability in other areas began to suffer.

"Therefore, they have to have the discretion," said Ruben.

On a slightly positive note, Ruben reported that both potential budgets are balanced -- just barely.

"We take in revenues of $6 million, and we have a fund balance of $8,000 at the end of the year," he said.

Furthermore, if a referendum petition is successful, the board still has the authority to decide if the bonds will become part of the spring election.

Originally, Ruben supported the idea of not putting the bonds up for a vote, but after some time to think, he changed his mind.

"If we put it on the ballot and it would pass in the March elections, then we probably would be able to get the money in April. At that time, we could restore the funding to the outside agencies. They're not used to getting their money until the property taxes come in, in July and September anyway. Our intention would be to put it on the ballot and pass it," he said.

The same redistribution of funds could occur if enough time passes in the fiscal year and the board feels that the criminal court cases line item has an excess remaining.

After all of the discussion concerning the budget was finished, the original motion was passed by the board 9-1.

Board members present for the meeting were chairman David Hepler, Robert Farmer, Andy Anderson, Rick Aylesworth, Kevin Bateman, Bill Martin, Pat O'Neill, Gene Rohlfs, Chuck Ruben, Andy Meister and Jan Schumacher.



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