July 7, 2017 at 5:00 p.m.
Council weighs spending limits
Council weighs spending limits
Jay County Council will consider a resolution at its July 19 meeting that would set minimum cash balances for 11 different county funds.
As outlined by Greg Guerretaz of Financial Solutions Group at a budget working session Thursday, such a resolution would be aimed at ensuring “an adequate operational cash flow and a margin of safety to protect against fluctuations in future revenue.”
Council members have been grappling with budget issues for the past several years, finding the county squeezed by a number of factors beyond its control: Property tax caps, changes in state law that affect property assessment, rising costs, and a ceiling on the total tax levy.
“You’ve got a very large business you’re trying to run here,” said Guerretaz.
Establishing minimum cash balances would have a positive impact on the county’s credit rating because it would demonstrate the “management logic” of the council’s approach to finances, he said. “This is a really an important management tool.”
A draft of the resolution, which will be reviewed by county attorney Bill Hinkle and is likely to be revised by the council, would require the following minimum cash balances in different accounts:
•County general — $1,500,000
•Cumulative bridge — $1,000,000
•Cumulative capital development — $500,000
•County health insurance — $50,000
•Local roads and streets — $250,000
•County highway — $1,500,000
•Rainy Day — $1,750,000
•Jay County EMS — $200,000
•Economic Development Income Tax — $500,000
•Infrastructure fund — $250,000
•Local Option Income Tax public safety fund — $100,000.
The budget group has been focused on finding ways to provide yearly raises for at least the next three years, building the general fund back to a healthier cash balance, and avoiding the tendency to “raid” the Rainy Day fund for operating expenses.
Because there are limits on what the council can do in terms of raising revenues, expenses have been targeted.
At mid-way through the year, the county’s finances appear to be in pretty good shape. “It’s not sunshine and daisies, but it’s not fire and brimstone,” said county auditor Anna Culy.
But there are a number of unknowns and variables that could change that situation dramatically before the year is over.
JEMS continues to be among those unknowns and variables.
The emergency medical service continues to struggle with its personnel overtime costs, and a switch to a new billing service has resulted in a delay in revenue.
“Certainly by year-end, it should catch up,” county commissioner Chuck Huffman told council members.
“It’s going to turn around,” said Guerretaz. “I just don’t know if it’s going to turn around fast enough.”
“This is a big question mark for me,” said Culy.
One option, if faced with a potential fund deficit at year-end, would be for the council to approve a loan from another fund, such as the infrastructure fund. But Guerretaz cautioned the council to make clear in a resolution the financial logic behind such a loan.
Another unknown: The amount of money the county will receive from the Indiana Department of Correction for housing prisoners at the Jay County Jail.
Though the county isn’t housing many prisoners from adjoining counties this year, it is still housing DOC inmates.
The number this year does appear to be up. “But should we count on that?” asked council president Jeanne Houchins.
“No,” said Guerretaz. “Right now, you’re not overly depending on it, nor would I recommend that.”
Though still in flux, current projections before the council are based upon a 2 percent pay increase in addition to a longevity increase. A freeze of pay levels for elected officials is also on the table, and that would limit chief deputy officials to just a longevity increase.
The working group had looked at a 3 percent increase, but that appears unlikely.
“With 3 percent and the longevity, the (general fund) balance sinks,” said Guerretaz. “We’ve got to be cautious and that’s why I’ve been saying 2 percent all along.”
“Three percent’s out of the question,” said councilman Bob Vance.
Still another factor: The county’s cumulative bridge fund.
The county reduced the cumulative bridge fund from 4 cents per $100 assessed valuation to 3 cents two years ago to relieve some pressure on the general fund. But commissioners are now weighing an increase back to 4 cents, and that would take dollars away from the general fund. Guerretaz recommended phasing in a return to the 4 cent level.
“If you try to go back there, someone’s going to feel the pain,” he said.
Many counties grappling with budget concerns are considering boosting their local income tax, but Jay County already ranks 11th in the state among the highest county income taxes. That ranking is likely to fall as other counties raise theirs, but Guerretaz urged leaving current rates where they are.
“You’ve got breathing room in your income tax rate, but you’ve got to be careful,” he said. “Let’s really, really manage your expenses.”
As outlined by Greg Guerretaz of Financial Solutions Group at a budget working session Thursday, such a resolution would be aimed at ensuring “an adequate operational cash flow and a margin of safety to protect against fluctuations in future revenue.”
Council members have been grappling with budget issues for the past several years, finding the county squeezed by a number of factors beyond its control: Property tax caps, changes in state law that affect property assessment, rising costs, and a ceiling on the total tax levy.
“You’ve got a very large business you’re trying to run here,” said Guerretaz.
Establishing minimum cash balances would have a positive impact on the county’s credit rating because it would demonstrate the “management logic” of the council’s approach to finances, he said. “This is a really an important management tool.”
A draft of the resolution, which will be reviewed by county attorney Bill Hinkle and is likely to be revised by the council, would require the following minimum cash balances in different accounts:
•County general — $1,500,000
•Cumulative bridge — $1,000,000
•Cumulative capital development — $500,000
•County health insurance — $50,000
•Local roads and streets — $250,000
•County highway — $1,500,000
•Rainy Day — $1,750,000
•Jay County EMS — $200,000
•Economic Development Income Tax — $500,000
•Infrastructure fund — $250,000
•Local Option Income Tax public safety fund — $100,000.
The budget group has been focused on finding ways to provide yearly raises for at least the next three years, building the general fund back to a healthier cash balance, and avoiding the tendency to “raid” the Rainy Day fund for operating expenses.
Because there are limits on what the council can do in terms of raising revenues, expenses have been targeted.
At mid-way through the year, the county’s finances appear to be in pretty good shape. “It’s not sunshine and daisies, but it’s not fire and brimstone,” said county auditor Anna Culy.
But there are a number of unknowns and variables that could change that situation dramatically before the year is over.
JEMS continues to be among those unknowns and variables.
The emergency medical service continues to struggle with its personnel overtime costs, and a switch to a new billing service has resulted in a delay in revenue.
“Certainly by year-end, it should catch up,” county commissioner Chuck Huffman told council members.
“It’s going to turn around,” said Guerretaz. “I just don’t know if it’s going to turn around fast enough.”
“This is a big question mark for me,” said Culy.
One option, if faced with a potential fund deficit at year-end, would be for the council to approve a loan from another fund, such as the infrastructure fund. But Guerretaz cautioned the council to make clear in a resolution the financial logic behind such a loan.
Another unknown: The amount of money the county will receive from the Indiana Department of Correction for housing prisoners at the Jay County Jail.
Though the county isn’t housing many prisoners from adjoining counties this year, it is still housing DOC inmates.
The number this year does appear to be up. “But should we count on that?” asked council president Jeanne Houchins.
“No,” said Guerretaz. “Right now, you’re not overly depending on it, nor would I recommend that.”
Though still in flux, current projections before the council are based upon a 2 percent pay increase in addition to a longevity increase. A freeze of pay levels for elected officials is also on the table, and that would limit chief deputy officials to just a longevity increase.
The working group had looked at a 3 percent increase, but that appears unlikely.
“With 3 percent and the longevity, the (general fund) balance sinks,” said Guerretaz. “We’ve got to be cautious and that’s why I’ve been saying 2 percent all along.”
“Three percent’s out of the question,” said councilman Bob Vance.
Still another factor: The county’s cumulative bridge fund.
The county reduced the cumulative bridge fund from 4 cents per $100 assessed valuation to 3 cents two years ago to relieve some pressure on the general fund. But commissioners are now weighing an increase back to 4 cents, and that would take dollars away from the general fund. Guerretaz recommended phasing in a return to the 4 cent level.
“If you try to go back there, someone’s going to feel the pain,” he said.
Many counties grappling with budget concerns are considering boosting their local income tax, but Jay County already ranks 11th in the state among the highest county income taxes. That ranking is likely to fall as other counties raise theirs, but Guerretaz urged leaving current rates where they are.
“You’ve got breathing room in your income tax rate, but you’ve got to be careful,” he said. “Let’s really, really manage your expenses.”
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