04/29/2009: "Council Needs To Cut $1 Million From Budget"

San Juan County Auditor Milene Henley presented the County Council with an early r1st Quarter Financial Review on Tuesday, the news was bad.

Henley said the primary sources of revenue are strong at the moment, but a predicted “poor summer could change that.”

County Administrator Pete Rose informed the Council that “We will need to look seriously at the core functions of County government that are funded by general revenue, and we may find ourselves in the position of asking not ‘What is important?’ but ‘what is legally required?’ We are going to have to decide what we aren’t going to do.”

Rose said he and Henley have already informed County Department heads that additional reductions need to be made.

Henley recommended a $1 million cut in the current expense budget; or the County will run out of money sooner than later. Projecting ahead to the 2010 budget, Henley said that without cutbacks, the County would have no working cash by the end of that year.

Henley told the Council that while the County’s primary sources of revenue are property and sales taxes, and are as projected, the bad news is that other revenues are down..

Henley projects a $340,000 shortfall of the amount projected in the budget from planning and building permits. In addition, she expects interest payments on deposits will fall by 70 percent. All of this is adding up to a drop by about $2.5 million dollars of revenue into the County: a 18 percent drop below the County’s $14.1 million Current Expense budget.

On the expense side, department budgets were tightened to eliminate almost all reserves in 2009 and some costs -such as law enforcement and personnel costs- are running above expectations. Spending controls will be needed to offset a trend that she projects could otherwise amount to as much as an extra $500,000 by the end of the year.

The cuts will not come easily as payroll costs account for 72% of the County’s general fund budget.

Cutbacks that went into effect with the current budget reduced the County’s workforce and directly affected 46 employees through personnel reassignments, reductions in hours or having positions combined or eliminated. Two additional employees were laid off in March.

The County is limited to increasing its income from taxes on existing property by more than 1% per year without a vote of the people. County Council members mentioned the possibility of conducting a “levy lid-lift” election in discussions after the adoption of the 2009 budget, but there has been no concrete action in that direction.

A copy of the slides the Auditor used in her presentation is available online at:
http://sanjuanco.com/docs/news/1Q09_Financial_Rpt.pdf