End of the Year Fiscal Update for Monroe County Government

30 Jan

At last week’s Monroe County Council work session, I gave a presentation to the council and the public on the fiscal state of Monroe County Government as of the end of 2014, particularly from the perspective of the county’s primary general operating funds — the General Fund (property tax) and the County Option Income Tax (COIT) fund (income tax), as well as the Rainy Day fund (essentially, our savings account).

In short, the county’s financial position is strong. The most important slide in the presentation was the following, which summarizes the two general funds (property tax and income tax) as well as the Rainy Day fund:

2014 General Funds Summary

Although the County had $2.2M less in cash on hand at the end of 2014 as it did in the beginning, this was due primarily to planned spending on one-time capital expenses, including $1.8M to equip the 911 Dispatch Center and $155K for the Monroe County Urbanizing Area plan. In addition, because settlement (the process by which the property tax collected by the county gets distributed to all of the taxing units that receive property tax) was not complete by the end of 2014, the county only received 95% of the property tax it should have received  for the second half of the year. The remainder will be paid in 2015.

A couple of other important findings in the report:

  • We paid out approximately $200K in expenses that did not by law require an appropriation by the Council. These expenses include special prosecutors, certain election expenses, elected official travel to certain state-mandated meetings, and State Board of Accounts audit expenses. This $200K per year number is relatively stable from year to year, so my recommendation is that the Council budget that amount per year, even though we don’t have any control over it.
  • Both general funds (property tax and income tax) end the year with healthy balances. The general property tax fund required a transfer of $2.7M from rainy day to stabilize it after several large one-time capital purchases over the last several years (Johnson Hardware Building, 911 Dispatch Center equipment, and the Monroe County Urbanizing Area plan).
  • We still have a $3.3M balance in the Rainy Day fund, which gives us a buffer in case property tax settlement continues to be delayed, or if income tax should take an unexpected nosedive.
  • County departments reverted (i.e. didn’t spend) approximately $1.3M of their appropriations in 2014. $605K of this was in personnel. Personnel reversions also appear to be quite stable from year to year. Personnel reversions generally occur because of employee turnover. When a position is vacant — even for a day —  it leaves unused personnel (salary and benefits) appropriations. Even when that position is filled, it is generally filled with someone whose salary is at the entry level for that classification — creating more reversions. The council was in general agreement that departments should transfer any of their unused personnel appropriations before requesting any additional appropriations towards the end of the year.
  • The circuit breakers (tax caps) are taking an increasing (but still not yet alarmingly large) bite out of property tax revenues in Monroe County. I have written about circuit breakers before here and here.

The last slide in the presentation summarizes the 2015 budget that the Council adopted in October:

2015 Budget Summary

As this chart shows, the budget that was passed is a balanced budget (actually, is about $122K in surplus). However, there  are a lot of things that this small surplus doesn’t take into account both good, like the additional 2014 property tax revenue that we will receive in 2015, as well as 2015 reversions, and bad, like the circuit breakers and any additional appropriations that we might have to make beyond what was budgeted for 2015.

The entire report can be found here: 2014 Budget Wrapup Presentation G McKim

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