County needs a budget timeout

There needs to be a timeout.
That’s the message financial consultant Greg Guerrettaz stressed to Jay County budget committee members about the county’s projected 2017 budget.
“I’m saying timeout. It’s not going to work,” he said near the beginning of Monday’s committee meeting.
In opening up the nearly two-and-half hour-long meeting, Guerrettaz highlighted that the ending balance for the county’s general fund in fiscal year 2015 would have been around $142,000 had it not been for the $500,000 poured in from the county’s rainy day fund to help balance the budget.
Current projections estimate the ending balance to be $36,099.37 at the end of 2017.
“We’ve got a trend here we’ve got to break,” Guerrettaz told committee members Faron Parr, Ted Champ, Jeanne Houchins, Anna Culy, Bob Vance, Doug Inman and Dan Watson.
A timeout, Guerrettaz indicated, allows time for the county to further establish a game plan.
What that game plan entails for Guerrettaz is setting minimum fund balances, targets for where the committee would like to strive for the balance of the county’s major funds at the end of its fiscal year on a consistent basis.
“The really hard issues here are going to be what are we going to accept as a minimum fund balance in each of the funds,” he said.
But with the county’s current fiscal situation, Guerrettaz said the minimum balances would act as more of a target rather than a minimum the county can enact right away.
With such figures in place, though, the budget committee and county council could back their way into seeing what funds they can provide department heads in budget increases.
Setting such figures would help the county begin to solve what Guerrettaz called “structural issues,” where expenses have begun to exceed to revenues.
When asked by Houchins the target amounts he would recommend, Guerrettaz suggested $2 million for the rainy day and $1.5 million for the general fund.
“We’ve got a long way to go,” he said of the $1.5 million target.
Like in previous meetings, concerns related to the finances of Jay Emergency Medical Service (JEMS) were discussed at length.
JEMS was $146,817 in the red in 2015, and projects to be $123,891 in the red this year. It has been helped via the rainy day fund ($300,000 in 2010, $400,000 in 2014 and $44,098 annual for a paramedic salary and benefits since Feb. 2014).
“That’s the big drag factor. I cannot, again, see any light coming,” Guerrettaz said.
Inman looked into whether JEMS needs to increase its base rates, but his research shows the charges are already similar to those in neighboring Adams, Delaware and Randolph counties.
“To me, (JEMS) is not a matter of revenue because if we charge a thousand dollars or $5,000 dollars a run, whatever Medicare or Medicaid are reimbursing are part of the problem because we are in a low income area where people are under that program and those reimbursement plans are what they are and aren’t getting better,” said Inman. “We just have to get better at how we run that department and the expenses have to be looked at.”
Guerrettaz asked whether third-party billing might help ease the financial strain of the department. Houchins said its something to look into, but Inman said there seems to be some resistance from the department for third-party billing.
Inman said he looked into whether Jay County Hospital would chip in funding for JEMS, but that’s a no-go.
The department’s financial strain requires hard decisions, Guerrettaz said.
“What you have to decide now, over the next three years, what are you willing to subsidize that department, OK, because it’s going to take that one,” he said.
That’ll include also having to decide what gets restricted from the general fund as a result.
“Guess what, it’s compounding, you know. This big old snowball is getting bigger and bigger, OK,” he added.
Near the end of the meeting, Guerrettaz asked if privatization of JEMS would be a possibility. Multiple members of the committee said it’d be hard to sell a service that isn’t profitable.
A suggestion from Houchins was to look at the hours worked by employees, and whether they can be changed.
Currently, the JEMS overtime budget is almost 20 percent of its total salary budget for its 2017 projection.
Champ said that as a service to county residents, JEMS doesn’t need to necessarily be profitable but that it needs to be close to breaking even.
Other major funds looked at during Monday’s meeting included the Economic Development Income Tax (EDIT) and Cumulative Capital Development (CCD).
Guerrettaz discussed the possibility of freeing up the two funds by moving around some of the funds allocated there that are used by Watson’s department.
“I’m trying to get you on a path in the Rubik’s Cube of public finance in Indiana. We have to get it all where it’s all white, not red,” he said
A theme stressed by Guerrettaz during Monday’s meeting was fixing structural issues in the budget. Fixing those issues, he suggested throughout, will give a better idea of whether wages can increased next year.
“My prime directive is, is there a way we can give salary increases, I look at the general fund and I start looking at all the other ones and I look for relief,” Guerrettaz said. “At this point in time, in the majority of them here in Jay County, I’m not finding relief. Why? Because I’ve finding other structural issues that need to be taken care of.”