Monroe County 2014 Budget Hearings – Update for Thursday, 2013-09-18

19 Sep

Yesterday’s penultimate session of the Monroe County 2014 Budget Hearings saw a couple of important developments. The budgets heard were the following:

  • Emergency Management (including Emergency Management in the General Fund and Emergency Right to Know)
  • No changes were made
  • Surveyor (including Surveyor in the General Fund and Surveyor’s Section Corner Perpetuation Fund
  • No changes were made
  • Building Department
    • No changes were made, although concerns were noted that the staffing level of the Building Department may still be a bit high, especially since residential construction is still down substantially
  • Plan Commission
    • No changes were made
  • Sheriff
    • A training line for $8400, required by contract and accidentally omitted from the budget, was added. The sheriff requested increased salaries for deputies in order to reduce turnover; however, this request was not acted upon
  • Animal Control
    • No changes were made. For the first time in several years, there was no serious argument about the cost of the Interlocal Agreement with the City of Bloomington for use of the animal shelter
  • Correctional Facility (including the Correctional Facility budget in the General Fund and the Misdemeanant fund)
    • No changes were made in the budget as submitted. The Council appropriated an increase of $102K to the Correctional Facility to add full-time mental health care services at the jail to its health care contract. This was the only substantial increase that the Council has approved during budget hearings
  • Highway (including Highway, Administration, Maintenance and Repair, General Expenses, Local Road and Street, Cumulative Bridge, Westside Economic Development Area (TIF), 46 Corridor Economic Development Area (TIF), and Fullerton Pike Economic Development Area (TIF)
    • No changes were made. I have written in the past about increases in 2013 to the amount of gas tax that local governments receive from the state (Counties Agitate for Increased Road Funding), and that increased funding was seen in this year’s Maintenance & Repair and General Expenses budgets (out of the Motor Vehicle and Highway fund, which is entirely funded by gas taxes). These budgets saw a substantial increase in bitumen (asphalt, used to repair roads) and lease-purchase payments for new highway vehicles to replace Monroe County’s seriously aging fleet.
  • Stormwater
    • The Council added 1/2 of a position of a Deputy Treasurer, in order to cover the costs to the Treasurer’s Office in performing the stormwater billing function. Note that this is not a new position – this is simply covering some of the costs of an existing position in order to support stormwater billing. This arrangement will still need to be approved by the Stormwater Management Board, which may choose to fund the 1/2 position as appropriated, or some smaller amount.
  • Health (including the Health General fund and the Local Health Maintenance fund)
    • Minor changes were made voluntarily by the Health Department, in order to correct for several position reclassifications that were budgeted but not granted

The other large, more global change that was made during today’s budget hearing was to change the health/life insurance fringe rate from 21% to 20%. Monroe County Government is self-insured for health care (with a stop-loss insurance policy to cap total claims). The health insurance fringe rate is essentially a “tax” on all salaries in the organization, which is used to fund health premiums and other expenses of the program, and to pay claims. Part of that fringe rate goes into a reserve fund that is used to pay claims. That reserve fund has to be big enough to accommodate some large claims — say, an employee undergoes cancer treatment.

Just as with any insurance system, we need to constantly watch that reserve fund to make sure it is neither too large (in which case, we are essentially reducing departments’ budgets, only to build up cash for no reason) nor too small (in which case we would be unable to pay claims). Although there is no formal guidance, there is a general consensus among county officials (with the guidance of our benefits consultants) that $2.5M is around the right size. However, the current rate of 21% (i.e. 21% of all salaries is charged to county departmental budgets to fund the health plan) is raising too much money, resulting in reserves that have grown to $2.7M.

The Council made the decision to reduce the rate to 20%, which resulted in a $144K cut to the General Fund and COIT funds combined (and saves all funds that have salaries in them). Note that this action does not change employee benefits or compensation at all. As usual, we will still need to monitor the reserves fund and the health/life insurance fringe rate closely, to ensure that reserves don’t drop too much, and will continue to reevaluate this rate each year.

The following chart summarizes the changes that have been made to departmental submissions to date, in the General and COIT funds combined:

Change Amount Total Deficit
Clerk (Positions)  $(122,901.00)  $849,768.72
Public Defender (Move to Supplemental?)  $(108,225.00)  $741,543.72
Assessor (Position)  $(40,966.00)  $700,577.72
Recorder (Perpetuation)  $(40,966.00)  $659,611.72
HR (Request Withdrawn)  $(33,780.00)  $625,831.72
Prosecutor Supplies  $(21,000.00)  $604,831.72
CASA (Move to Juv Non?)  $(15,000.00)  $589,831.72
Pauper Attorneys  $(70,000.00)  $519,831.72
Commissioners  $(20,000.00)  $499,831.72
Probation (Grant-Funded Positions)  $(46,763.00)  $453,068.72
Fringe ($144,636.73)  $308,431.99
Sheriff Training  $8,500.00  $316,931.99

At this point our departmental requests exceed planned revenues by $316,932. Remember, though, that all of these numbers are only estimates of what will actually happen. The revenues may be higher or lower than projections, and departments don’t always spend all of their budgets. Generally, by the end of the budget year, deficits of this small size are wiped out by reversions (unspent appropriations that are returned).

The other thing to note is that these numbers do not include any employee cost of living increases. It is difficult to provide cost of living increases when deficit-spending — so it is important that the Council and county departments still look for savings.

One more day of budget hearings left!

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