Jay needs a long-term plan

Start planning, keep planning and plan ahead.
That was the message from Financial Solutions Group accountant Greg Guerrettaz, who on Wednesday presented an overview of the county budget to a joint session of Jay County Council and Jay County Commissioners. The discussion also included suggestions for how to provide some financial relief.
One of his recommendations, which the groups acted on, was to form a subcommittee to begin working on the 2017 budget. It will be made up of council members Ted Champ, Jeanne Houchins and Bob Vance, commissioner Faron Parr, auditor Anna Culy and engineer Dan Watson and will hold its first meeting May 4.
Guerrettaz added that it would be good to have 2017 budget estimates from department heads within the next 30 days in order to plan for next year.
“So we know where we’re going,” he said, cautioning that adjustments will need to be made to balance the budget. “We already know where we’re going, we’ve just got to figure out how to not go there. And the sooner we start that, the better off we are.
“Seventeen we’ve got to figure out guys. And guess what, ’17 budget, in my opinion, started tonight.”
Suggestions from Guerrettaz included:
•Creating more stability within the budget to prevent large swings in revenue and spending.
•Making better use of funds that are in good shape in order to take pressure off of others that have been struggling.
•Taking a different approach to using flexible funds such as cumulative capital development.
•Petitioning the legislature to allow counties to make use of their local option income tax (LOIT) operating levy freeze stabilization fund.
•Working to generate consistent increases in the county’s assessed valuation.
•Eliminating the use of the rainy day fund on general operating expenses.
The drop in the rainy day fund balance — from $2.57 million in 2013 to $1.8 million in December — was one of the things that leapt off the financial documents for Guerrettaz.
“I always consider this your last bottom dollar,” he said. “The rating agencies do not want to see, and most people do not want to see … that you’ve budgeted some operating expenses in there now.
“Your last bottom dollar fund has now been created into an operating fund. That’s tough. That told me you were getting backed into a corner.”
He suggested taking a quarter of the LOIT funds being returned to local government entities this year — about $933,000 for Jay County — and using it to replenish the rainy day fund. (The other 75 percent must be used for road and bridge improvements as required by the state legislature.)
Guerrettaz noted the importance of having the rainy day fund for emergency expenditures, which always come along. Examples in Jay County could include flood mitigation or purchasing a new dispatch system for the sheriff’s office.
“I call it heading towards a brick wall. You know every county is heading towards a brick wall,” he said. “The question is, do you want to tap it, do you want to hit it hard, or do you want to go around it. Well, in racing, you want to go around it.”
He also discussed the way the county has been funding its roads — using the economic development income tax (EDIT), infrastructure and cumulative capital development funds in addition to the motor vehicle highway fund.
Guerrettaz suggested cutting back on the use of those funds, given the general strength of the motor vehicle highway fund and the influx of about $700,000 earmarked from the state. Those funds, especially cumulative capital development, could then be used to help other funds that are struggling.
Another area Guerrettaz pointed out in his 150-plus-page financial analysis is fluctuating income in a variety of funds, including for Jay Emergency Medical Service.
Property tax revenue for JEMS has cleared the $500,000 mark twice in the last decade, but then dropped from $543,283 in 2011 to $197,470 a year later. Culy explained that Indiana’s Department of Local Government Finance adjusts the amount of property tax money that can be brought in following years in which JEMS collects more in fees for services.
The county has twice dipped into its rainy day fund — first for $300,000 and again for $400,000 — to help the JEMS fund. It also is currently paying a paramedic’s salary out of the rainy day fund.
Guerrettaz indicated that he believes he can help the county work with DLGF to create stability and make sure that a consistent amount of property tax dollars are being allocated to support JEMS.
He added that many places that try to offer countywide ambulance services struggle to do so cost-effectively and asked if the cities and towns are charged for the service. (They currently are not.)
“You’ve got to get your fees for the service you provide,” he said.
Other suggestions included shifting payment for “communication officers” to the 911 fund, which is relatively healthy and is expected to continue to grow, from the general fund and petitioning the state legislature to allow flexibility with the LOIT option levy freeze stabilization fund. That fund was designed to help counties in times when income tax revenue decreased, but revenue has continued to increase and thus the fund has $1.4 million that is sitting unused.
“We’ve got a fund that’s totally ineffective and totally ridiculous,” Guerrettaz said.
While there are cuts and changes that can be made to help Jay County’s financial situation, Guerrettaz pointed to growth in assessed valuation as the long-term key.
The county saw a 0.05 percent decrease in assessed valuation in 2016. The assessed valuation had increases in each of the previous six years, ranging from 0.45 percent in 2010 to 7.67 percent in 2015.
Guerrettaz expressed the need for the county to do whatever it can to help bring new businesses to Jay County, whether it be through financial incentives, legislative changes, use of economic development money or other creative solutions.
“One of the most important ingredients for the next five to 10 years in this county is AV growth,” he said. “We’ve got to get good quality AV here and bring in assessed value … because that’s the long-term saving grace. That’s got to be prime directive No. 1.”
Council member Ted Champ, who was a vocal opponent of using the rainy day fund to balance the general fund budget this year, noted the reality that expenses will need to be cut back and the need for department heads and council to work together to do so.
Commissioner Jim Zimmerman also talked about the need for teamwork amongst all county officials.
“It’s not some thing we can fix overnight, but let’s sit down and figure out where we can go from here,” he said. “We’re all on a team … We all want to get to the same place.
“That would be my encouragement to everybody sitting in this room that’s going to be working on this tonight, to think about where we go forward from here.
“We’re not all going to have the same ideas. But we all have the same goal and the same purpose, that we want to move Jay County forward in a good financial position.”