Tuesday, October 20, 2009
 
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Draft of 2010 Logan County budget gets tentative approval

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[October 20, 2009]  It began with two full mornings of budget hearings in August and was followed by monthly and special meetings that took as much as three grueling hours each, but the Logan County Board's finance committee had the 2010 budget draft ready last Thursday evening. The result was a proposed budget that keeps the bottom line in the black with hopes of no layoffs, includes annual raises and was completed without raising taxes.

Eleven of the board members were in attendance at the board of whole and had received their copies. Bill Martin was absent due to an injury.

For the past two months the committee painstakingly pored over every line of the 67-page document and weighed requests against projected revenues and expenses. High energy and fuel costs, increasing liability and health insurance, and other expenses have all been of major concern in recent years. This year the financial planners had to factor in how much shortfall there might be from sales, income and property taxes and other revenue sources, due to the current economic climate.

"We made significant cuts in the revenues where we thought certain taxes will not be bringing in the same amounts they brought in, in years past because of the economy," Ruben said. "We kept tight where we thought attainable."

No new taxes

Property tax provides the largest source of revenue for the county. An increase in the property tax levy may be seen without raising taxes. One factor would be due to new construction. Another is that the consumer price index is added to the old rate. This is not a tax increase.

In 2008, property taxes brought in $1,127,414. In 2009, $848,530 was budgeted. In the 2010, $627,262 is projected.

This year's consumer price index provides around a tenth of a percent increase. Finance chair Chuck Ruben told the board that in dollars this amounts to about a $3,000 increase, which you can essentially call zero in comparison with the size of the Logan County budget. "So, there's very little growth in the tax levy from property tax," he said.

In September the committee factored in all the department budgets and special requests and then looked at the proposed expenditures versus anticipated revenues. They saw a deficit of $925,816.

The 2007 audit had just come in and was used to project figures for this budget. Also of importance was the bottom line at the end of last year. Whatever is left over in the general fund from one year rolls into the next year.

The audit first showed an ending general fund balance of $81,000. However, that figure diminished after some corrections were made and fell to $19,000.

For several years it has been the committee's goal to reverse the trend of the declining general fund balance. These funds serve as a reserve that is needed to buffer any surge of expenses when revenues such as property tax payments might lag. A reserve would also be important to have in case of an unanticipated catastrophic occurrence. Auditor Helen Barrick recommends having a minimum of 20 percent of the county expenditures in reserve. With Logan County expenditures being an estimated $6 million, $1.2 million would be appropriate.

The committee began the job of looking at how or where to make cuts. It was agreed that rather than tell this department or that department how to make their cuts, the decision process would be left up to the department heads. They could best decide what was best for their department. A special meeting was called to meet with the department heads to get their responses on how they would cope with various levels of cuts.

Ruben explained to the board that a 10 percent reduction in department budgets would have provided a $490,000 balance. A 5 percent reduction would have left $233,000.

"We decided that the 5 percent reduction was probably the way to go. We then added in the raises and a few other adjustments," Ruben said. The final result would provide a $175,000 ending fund balance.

The budget includes cost of living raises for all full-time, nonunion county employees. The 3 percent pay raise for all county employees amounts to about $40,000.

Ruben thanked the committee for all their hard work. He said that during the process there was some agreement and some disagreement.

The floor was then opened for board comments on the budget. Not all portions of the budget met with the approval of all the board members.

Board members' first responses:

David Hepler -- I just got my copy and plan to read it over and get some feedback.

Pat O'Neill -- I cannot vote in favor when salary and compensation is a large majority of our expense. This budget raises wages and, what it boils down to, cuts services. I don't think this is something we should do in light of hard economic times.

John Stewart questioned putting the chamber of commerce request for $5,000 under the airport-farm budget rather than the historic sites budget.

Ruben said that the finance committee wanted to help them, but funds were not available to meet the request out of the historic sites budget.

The county cash rents the airport property where the balloon fest has been held in recent years. Currently alfalfa is put in so that the crop is out in time for the festival.

The finance committee saw providing the funding out of the airport-farm fund as a natural fit. This year there was a large increase in land rent at both the airport and the farm. "Essentially we're giving them (the chamber) their payment for rental of the ground back to them," Ruben said.

Stewart disagreed that county government should be giving money to organizations. If you're going to do that, then you should look at Railsplitter, maybe Emden Homecoming, Atlanta and Mount Pulaski fall festivals, and where's it going to stop? he questioned. "This is the county government, supposed to be running the government, not giving it to organizations to have festivals and such," he said.

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The county receives a 1 percent hotel-motel tax that goes to tourism. In 2008 the county received $113,000 from that tax. The 2009 budget was budgeted at $150,000, but with the recession, 2010 has been budgeted at $135,000.

The county also receives a 0.25 percent special-use tax, of which half the funds are designated to go to Main Street Lincoln and the other half allotted to historic sites, with funding granted by request.

Historic Sites Motel Tax Fund

2010 anticipated revenues:

  • Main Street, $16,250

  • Historic sites, $16,250

  • Total: $32,500

2010 expenditures:

  • Main Street, $15,000

  • Atlanta Library and Museum, $3,750 (Downey Building and Palms Grill project)

  • Logan County Genealogical & Historical Society, $2,300

  • Postville Courthouse, $2500

  • Mount Pulaski Township Historical Museum, $3,250 (chair lift)

  • Emden Historical Society, $500

  • Hawes Grain Elevator Museum, Atlanta, $1,250

  • Civil War statue, $10,000

  • Heritage In Flight Museum, $2,100

  • Emden Whistle Stop Depot, $750

  • Total: $41,400

The account will carry over a fund balance of $10,370 to this budget, which would leave a balance of $1,470 at the end of 2010.

Each of the historic sites listed below Main Street had requested twice the amount of the numbers above. The requests were for specific needs that would be beneficial to tourism and thereby expected to increase tourism revenues in Logan County.

In the initial stage of cuts, the finance committee recognized that the chamber pays nearly the same amount they were requesting for the balloon fest into the farm account for rent of the property for the festival. It would be a wash to move their request to the farm fund, as Ruben put it.

Then, by cutting each request by half, everyone would get something.

Those requesting the funds from this account were notified that their funds would be allocated by request in two rounds during the coming year and are subject to money coming in.

Jan Schumacher pointed out that there are taxes collected to go for historic purpose and asked if he was opposed to that.

Stewart said that he was not opposed to the tourism-based tax going to tourism.

Kevin Bateman agreed with Stewart. "You're opening up something here," he said. "There could be a line out the door for almost any kind of festival or just about anything in the county."

Chuck Ruben -- "We do have a compelling issue of time on the budget." He recommended that anyone with an issue on one item see if there would be enough support from the board to see about removing that one item from the budget by amendment, "as opposed to throwing out the whole document."

Ruben and farm committee chairman Bob Farmer said that bids to farm the county-owned ground went up this year from $80 to $127.50 per acre, increasing revenues in that fund.

Terry Carlton, board chairman -- I understand your point: "What about the other events that take place around the county?" It's not just a matter of giving them $5,000. They are paying the county for the use of that land. Taking the funds from the airport-farm fund is a trade-off.

The other aspect is the tax gained for Logan County. It's a premier event that happens in Logan County. There is a significant spike in the hotel-motel taxes in that period. The county gets both a 1 percent and a 0.25 percent allocation from the motel-hotel taxes. The county receives significant revenue during that time period.

(Figures from this month's clerk and recorder report -- In July, the combined 1 percent and 0.25 percent hotel-motel taxes returned $6,706. In August it was $20,600. This figure does not take into account all the dollars that were spent at local eateries and retail businesses, including fuel stops during the three-day event.)

Stewart put forth a motion and Bateman seconded it to remove the $5,000 for balloon fest from the farm fund.

Jan Schumacher added to her comments that the revenue the chamber of commerce generates for the county (with this event) makes it a worthy expense.

Finance chairman Chuck Ruben assured everyone that amendments could still be made up to the time of final approval. He urged acceptance of the document as a whole. The board tentatively approved the draft Thursday evening. If accepted tonight (Tuesday), it would be posted for public viewing for 15 days and then would be reviewed and amended at next month's board of whole and ready for the board's final approval at the adjourned meeting in November.

Vice chairman Pat O'Neill called for a verbal straw vote, which sounded votes for each direction, and he called it favorable to removing the $5,000.

He then called for a vote on approving the budget, which yielded a couple of nonsupport calls but more strongly indicated that the budget would pass.

[By JAN YOUNGQUIST]

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