Commission told it must cut $3.9 million in spending over next six months
By BRYAN CLARK
CHARLES TOWN – Newly-appointed financial director Tim Stanton told the County Commission today that it will have to cut $3.9 million in expenditures to keep this year’s budget in balance – about 13 percent of its budgeted spending for the year.
“There is a need to reduce the expenditure level here in the county,” Stanton said. “You are in a position where you simply do not have enough money to fund the county departments and also fund the component units and fund all the charitable organizations.”
The situation is made more dire by the fact that the county’s fiscal year, which began in June, is already half over. Cuts to annual budget appropriations will therefore be concentrated almost entirely in the second half of the year, effectively doubling their size over that period.
The size of the cuts to the county commission’s departments – including those in charge of maintaining county property, running county parks, and reviewing planning and zoning applications – and the outside agencies they fund – including development and emergency services authorities – will depend to a great deal on how much the county’s other elected officials will agree to cut their budgets.
Elected officials’ budgets are set at the beginning of the fiscal year, and cannot be cut without their agreement. If elected officials do not agree to any cuts, county departments and outside agencies will have to see cuts of about 26 percent. Since these cuts would fall entirely between now and June, spending by these groups would effectively be cut in half, according to Stanton.
Stanton’s report indicates that the Assessor’s Office is so far the only elected agency to agree to cuts, coming in at about 14 percent. So far, elected officials and department heads have agreed to cut their spending by about $1.4 million, only a third of the cuts that will eventually be needed.
But talks between the finance director and elected officials are ongoing.
“The elected officials have been very cooperative in trying to resolve the issue,” said Stanton.
Stanton’s report examined one possible budget balancing scenario that through next June would substantially cut cut contributions to county employee’s health reimbursement accounts, eliminate all charitable contributions, cut its contributions to libraries and eliminate all funding to the Partnership for Affordable Housing. It envisions cutting $268,000 from the Emergency Service Agency’s budget and cutting $15,343 from the Development Authority, which is around a quarter of each agency’s budget.
The proposal would also involve drawing down all of the county’s yearly budget contingency and numerous cuts to smaller programs, like eliminating a $5,000 scholarship fund that Parks and Recreation uses to give disadvantaged youths access to summer programs.
Even with all the cuts examined in Stanton’s report, the commission would have to find an additional $379,792.
Neither would the cuts fix the county’s structural budget situation.
“None of the adjustments are perpetual,” Stanton said. “They are reductions that managers have made. They are deferring their spending, and they think they are going to defer it this year and spend it next year. So I am in a reactionary mode trying to preserve cash.”
Stanton said the commission would need to address structural problems with its fiscal picture when it draws up the next budget in June.
Commissioner Walt Pellish said one structural change that should be made is to segregate funds it receives from gaming at Hollywood Casino, rather than relying on them to fund ongoing spending.
“Once we get out of this bind … we need to look at anything that is coming out of the track and get it the hell out of general revenue,” he said.
Commissioner Dale Manuel noted that this would mean reducing the county’s general revenue budget by around 20 percent.
Stanton will recommend next week that the county adopt a suite of nine policies designed to keep the county’s budget from entering a similar crisis in the future. These include keeping an unencumbered balance in their general revenue fund, funding reoccurring expenses from reoccurring revenue sources, and closer monitoring of employee salaries and benefits.
Commissioner Patsy Noland said the commission is suffering now for fiscal mistakes it made in the past.
“Mistakes have been made for years, and we are paying for the mistakes of the past,” Noland said.
Commissioner Walt Pellish said the county’s long-term fiscal outlook depends heavily on its ability increase economic activity.
“We’re in a bind right now, but this is not a long range bind,” he said. “We have to keep in mind that the only solution for this county is to add jobs and new business. We’ve got to increase revenue.”