Unspent money expected to shore up Washington County budget

Posted: November 5, 2017 at 1 a.m.

FAYETTEVILLE -- Washington County expects to have $12.5 million remaining in the general fund after paying all the bills for this year, Treasurer Bobby Hill said.

The money includes a fund that acts like savings for the county, money the state mandates be saved from revenue and unspent money in departments' budgets.

Part of that may help offset a $5 million gap between projected spending and expected revenue next year.

"I think we are OK short-term," Hill said.

Justices of the peace continue discussions this week on how to reduce the shortfall in the proposed $68 million budget for 2018. A focus will be on the $36 million available in the general fund.

The 2018 budget must be approved by Dec. 31.

The general fund has about 50 budgets within it, Hill said. Restrictions dictate where the money in other funds can be spent. But money in the general fund can be moved around to help with cash flow. For example, the general fund has provided $8 million to the jail, insurance and road departments during the past five or six years, Hill said.

Justices of the peace said they also plan to consider cuts to bridge the gap, including $100,000 from Ozark Regional Transit.

Justice of the Peace Eva Madison, a Democrat representing northeastern Fayetteville, has said repeatedly she wants justices of the peace to consider ways to increase revenue, too. That could include increasing property taxes or changing how a sales tax is divided between the general fund and Road Department. Madison is chairwoman of the budget committee.

The difference between revenue and spending for the county's overall budget might not be as big as predicted. Several departments are spending less than budgeted, and revenue is expected to continue to grow, according to county records. The county may not have to cut $5 million depending on the ending balance, officials said.

"We're really not going backwards if those projections are accurate," said Justice of the Peace Joel Maxwell, a Republican representing western Washington County.

Departments funded completely by the general fund spent 73 percent of their budget as of Sept. 30. The numbers are the most recent available from the Comptroller's Office.

Based on the past four years, the county is expected to spend 90 percent of its budget, Maxwell said. That would leave about $3 million unspent in the general fund at the end of this year. More money would be left over in departments not completely funded by the general fund, records show.

The county could break even, despite showing a shortfall between proposed spending and revenue, Maxwell said.

Stabilizing Finances

The county's finances are stabilizing, Hill said.

The recession that started December 2007 hit county revenue. Records show a decline in property tax value in 2009 and 2010 particularly, Hill said. The general fund property taxes brought in nearly $12 million in 2010 but dropped by $840,000 the next year, he said.

"You can see in 2010 the rapid decline in growth from the prior year," Hill said in email.

Revenue form the countywide one-cent sales tax also fell by 10 percent between 2006 and 2011 as consumers lost confidence, Hill said. The tax took another hit after the 2010 U.S. Census showed more growth in cities and reduced the county's share of the revenue.

Around the same time, property tax revenue dropped after the Quorum Court cut the millage rate to 3.9 mills from 4.4 mills in 2011.

Money in the general fund that rolls over each year fell from $27 million to $13 million over the past six years. Money held in reserve was $11 million in 2011 but down to $6 million this year.

The county plans to spend another $2 million this year to cover costs at the jail. That would bring reserve not dedicated to any particular expense to about $4 million.

Even so, the carryover money next year is expected to be about the same as this year. Numbers show the county is leveling out and holding its own for now, Hill said.

"We are stabilizing," he said.

Underspending

Department heads are making an effort to save, they said.

Washington County Judge Joseph Wood's departments spent about $19 million by Sept. 30, leaving about $8 million for the remaining three months, according to county records. Wood is head of 16 departments: environmental affairs, animal shelter, building and grounds, road, planning, information technology, comptroller, county attorney, emergency management, grants, human resources, county library, juvenile detention, purchasing, archives and veteran service.

Wood is in charge of about $10 million of the county's general fund money and the Road Department's $11 million budget.

He has said repeatedly he wants to trim his budgets and has proposed a 3 percent cut in his overall budget for next year. County Attorney Brian Lester said in an email Wood also plans to save the county $500,000 in this year's budget.

Justices of the peace are trying to save, too, they said.

Quorum Court committee chairmen have reduced the number of meetings this year. The court spent 60 percent of its budget by the end of September. Each justice of the peace is paid $200 per meeting.

Departments also have saved by not filling positions, county officials said previously. The county Human Resources Department doesn't track positions elected officials choose to leave unfilled, Lester said in email Friday.

Madison said coming in under budget is not enough.

Elected officials could spend 100 percent of their budgets and revenue could fall short, Maxwell said. Also, the county faces a $1 million surprise bill every year, he said. A nearly $1 million accounting mistake surprised justices of the peace this year, he said.

Plus, the carryover money includes holding 10 percent of revenue for emergencies, as required by the state. That accounts for $4 million in the general fund that cannot be spent, records show.

"It doesn't matter how much money is in your mattress, what's important is the amount of money in your checking account," Maxwell said.

Looming shortfalls

The county stands to lose money after the next U.S. Census as cities grow in population and get more of the revenue from the 1 cent sales tax. The county will lose $1.5 million the first year after the new census in 2021. The county can also expect to lose $1.5 million per year with the sunset of a road tax in 2023, justices of the peace have said.

Source: Treasurer’s Office

Upcoming meeting

The Washington County Finance and Budget Committee will meet at 5:30 p.m. Tuesday at the Quorum Courtroom in the courthouse. The committee plans to finalize the 2018 budget and send it to the full Quorum Court for approval.

NW News on 11/05/2017