Rock County faces budget gap
That was the sobering message administration shared with the staff and finance committees Friday morning during the committees’ annual pre-budget-season meeting.
The county’s total budget is about $170 million, so officials could be looking to fill a 3 percent gap.
The pinch comes from projected decreases in state aid, in sales tax revenues and in investment returns. Meanwhile, the cost of health care and retirement benefits, among other things, are expected to rise.
The county anticipates a $1.3 million cut in state aid for 2010. That’s the biggest aid cut County Administrator Craig Knutson has seen in 30 years of county administration.
“We will have to be as creative and innovative as we can when it comes to services and how we provide them,” Knutson said. “I can’t tell you what that means for the level of services in 2010.”
Knutson said that he, county board members, department heads and county employees are “mindful” of the fact that demand for services is increasing. Knutson has asked county employees to speak up if they have ideas for saving money on operations.
During the presentation, Knutson urged committee members and reporters not to get stuck on the numbers.
A lot could change between now and October, when Knutson presents his version of the budget to the county board. For example, the county won’t know how much state aid it’s losing until state officials approve a budget later this summer.
Some of the priorities Knutson highlighted include:
Rock County has collected a county sales tax since 2007.
In 2007 and 2008, the county collected less than it budgeted.
In 2007, it collected $6.8 million—$1.7 less than expected. In 2008, it collected $10.5 million—$910,000 less than expected.
The county plans to collect $10 million in 2009. So far, the county has collected $3.1 million in four months.
Sales tax revenue is used to offset property tax revenue in county operations. It also is set aside for capital improvements.
Like everyone else, the county is not seeing much of a return on investments.
Rock County budgeted for a $2 million return on investments this year. That’s down $600,000 from 2008, said Jeff Smith, finance director.
It’s unlikely that the county will meet that $2 million projection, Smith said.
“Though the county’s cash position is good, returns aren’t very good,” Smith said.
General fund balance
Rock County’s policy is to keep its rainy day fund balance between 10 and 17 percent of total spending.
After 2008 numbers are audited, Smith expects the fund balance will be at 10.5 percent of spending.
That means no dipping into savings to run operations in 2010, Knutson said.
In 2009, the county expects to spend about $700,000 of general fund money on operations. So, using no fund balance money in 2010 will feel like a $700,000 loss, Knutson said.