County Girds for Crunch
Economic conditions have prompted County Manager Cary McSwain to prepare a contingency plan as a precautionary cushion against a possible dramatic drop in revenues.
In a work session Thursday night, McSwain told the Moore County Board of Commissioners that revenues are leveling off, fewer building permits are being issued, and fewer deed transfers are being recorded. He said he has imposed a temporary freeze on some budgeted capital projects at least until the county gets a clearer picture of the economic impact of the current financial crisis, probably by mid-January.
However, he said Moore County remains in sound financial condition and that these are merely precautionary steps to protect the county should the crisis hit home too hard.
"We're being responsibly cautious," McSwain said, assuring the board that "we're in good financial shape right now."
Register of Deeds Judy Martin, Financial Services Director Lisa Hughes and Planning Director Joey Raczkowski provided statistics to back him up on that.
The freeze on capital projects does not apply to building projects planned for a downtown Carthage tract the county purchased in 2007 for a jail expansion, a public safety complex and a new office building, because these are not items for which funds have been budgeted.
Hughes said the "frozen" items amount to hundreds of thousands of dollars appropriated within the 2008-09 budget. Among them are a microwave tower system for Public Safety, a loader for Solid Waste, computer software, replacement vehicles plus $300,000 for the wastewater treatment plant that would have come from an enterprise fund, not the General Fund.
McSwain had prepared a comprehensive contingency plan, incorporating widely varying cost-cutting options ranging from hiring delays to issuance of six-month tax anticipation notes.
Cuts in staffing were not proposed, but the latest employment figures show that the county presently has 27 vacancies, 13 of which have been unfilled for more than six months. In some cases, a freeze on filling these vacancies would not be cost-effective because the county is paying overtime for other employees to work longer hours to handle the workload. Paramedics and emergency communications dispatchers are among the unfilled positions that are considered vital, requiring around-the-clock service.
The options were divided into three main categories: short-term temporary measures, long-term financial options; and long-term systemic, structural or permanent strategies.
Examples of short-term measures are closing some facilities for a half-day once a week, replacing vehicles with more efficient models, and changing thermostats to reduce energy costs, as well as hiring delays and delays in capital projects. Refinancing outstanding bond indebtedness for lower rates and privatizing landfills are among the long-term options. Among the systemic or structural options would be a review of cash management options and appropriation of less than 100 percent of estimated revenues.
"These are turbulent times," McSwain said. "We've been watching these things carefully."
Signs of the slowing economy are found in such things as the issuance of building permits, deed transfers and revenue collections.
"We're neck-and-neck," Hughes said in reference to revenues collected so far in the 2008-09 fiscal year.
Fee Collection Off
The yield to date for the 2009 fiscal year was identical, 37.7 percent, in comparison with the yield for the same period of the previous year. However, the county's undesignated fund balance, which usually shows growth, grew by zero percent. Expenditures were down slightly.
Graphs showing collection of code-enforcement fees and fees collected by the register of deeds showed slight declines. Code enforcement fees were above the amount budgeted, but collection of register of deeds fees was below budget.
"I've never seen it this low," Martin said, though adding that property is still changing hands in Moore County.
For the time being, collection of sales taxes appears to be stable, although this could change.
Commissioner Tim Lea asked if there is any likelihood the state might commandeer these funds if the state has a serious revenue shortfall.
Hughes said the state collects these local option taxes for counties and must turn this money over to counties.
"They can't mess with this," said McSwain.
After the meeting, McSwain reiterated his belief that the county is in sound financial condition and said the temporary delay in capital project expenditures is simply a case of "being responsibly cautious."
The options are expected to be a focus of the budget planning retreat the commissioners will hold in January.
During the long work session the commissioners also heard a report on gang prevention measures, a proposed update of the land use plan with addition of a master water and sewer plan, and an update on contracts by County Attorney Misty Randall. The board was also prepared to discuss membership terms on various advisory panels.
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