Commissioners discuss financial issues
An examination of revenues, expenses and ideas for finding project funds are part of the County Commission’s retreat session.
There’s a lot of issues facing Polk County Commissioners of late, all of them requiring some kind of financing to make right. Whether it be increasing employee salaries to ensure the county government remains competitive with surrounding areas, to how administrators might find the funding to help pay matching requirements for a state grant like the forthcoming airport runway extension project.
All of these items and much more come down the almighty dollar, and whether or not the county has enough cash — both on-hand and anticipated — to make it all work.
Explaining the system of how the county maintains a positive cash balance in the bank and where funding sources come for projects like Cherokee Road improvements was the focus of a commission retreat over finances.
The job of explaining the ins and out’s of the finances fell to County Manager Matt Denton and County Finance Director Muriel Dulaney, breaking down bit by bit for the commission where the money comes from that funds operations, but also where those expenses are going.
Commission Chair Jennifer Hulsey said the ultimate goal of the retreat was for the board to be on a level playing field together when it came to an understanding of the county’s finances with one clear vision for where Polk County’s government goes from 2018 on.
“The one thing I want to make sure we do as a board is to set goals and then to get them done,” Hulsey said. “But first we’ve got to know where the money is going to come from to get to where we want to be as a county.”
One thing remains set in stone for the county government no matter what decisions they make in the future: they must maintain a balanced budget, and have enough cash on hand to stay solvent for at least three months in case of catastrophic emergencies.
Government by the numbers
Here’s a fact to keep in mind over any discussion of government financing, whether it be a local municipality or the Federal government when discussions of revenues and expenses come up, much of the time lost amid the dollar signs followed by large figures. All of this money comes from citizens.
Property tax money collected in the fall each year after bills go out in September come out of the wallets of homeowners and bank accounts of companies. The fees charged for building permits are paid by contractors or individuals and add to the tallies of construction costs. Court fines are charged to those who violate the law.
Even inmates at the Polk County Jail pay out for com- missary items and to use the phone.
That goes for any debt incurred too. Whenever Congress decides the Federal government needs the power to borrow more money, the vote to raise the debt ceiling. The trillions already owed to cover the debt already incurred, plus all that money being spent now and in the future, will ultimately come from your tax dollars.
The same goes for when local governments buy bonds for projects too. Just as much as they are collecting money for revenue, the funds they borrow and spend belong to the people as well.
Hence why so much attention is paid to balancing budgets, setting low millage rates, putting in place options for public comment and legal transparency during any process involving finances, and submitting to annual audits.
For Polk County’s part, tracking every penny is the job of Dulaney and her staff.
She explained in detail and fielded questions from commissioners about how the county’s finances work day-today, and the variety of moving parts that go into determining what the county is required to spend and after what they can spend on initiatives brought up by the commission or department heads.
Achieving that goal is one of the hardest jobs in the county. It starts annually with the development of a budget. The planning for the budget starts months ahead of when it is approved in June, so that multiple meetings with various departments can take place to get a fixed idea of the spending needs of each. Once that is added up, Denton and Dulaney then get input from commissioners about initiatives they’d like to undertake that will add costs to the county’s annual expenditures, then after a lot more work getting the numbers to balance and tally correctly, they submit the budget to the county commission for an up or down vote.
The first starting point for Dulaney is to take a snapshot during the budget year of what the finances actually are at the moment, and use that as a basis to build up budget numbers that reflect what realistic expectations for the coming year. Thus the starting point of the budget is a single day’s revenue and expenditures multiplied by 364, and gets the county to a starting number of what they need on hand to cover costs for the next year.
Of course, all of that is assuming the county receives the money in they expect in revenues, since they are educated guesses based off actual revenues from previous years. Much of the time to end the budget year with unexpected revenue, the county looks to trim out any unnecessary expenditures in departments or save money on line item purchases by looking for lower cost alternatives than what was projected.
For example, during the recession the county was forced to cut costs across the board and hold back on raises because of an unexpected downturn in the economic fortunes of all. It meant that property tax revenues coming in at the rate expected went down as foreclosures grew, thus forcing budget numbers to shift in order to cover what cash didn’t come in from people paying their bills in a timely fashion.
It also hurt the amount of money derived from building permits, since the housing market downturn affected the construction industry and meant less new homes being added as was expected.
So making sure the numbers remain conservative and the budget stable without having to borrow money is the first and foremost priority. The goal is to avoid using Tax Anticipation Notes, or TANs, when the revenues fall too far and there’s not enough money in the bank are somewhat costly and have to be paid back in a short amount of time.
Good thing for the county they are nowhere near that point. The fund balance remains healthy with several months of cash on hand for operations, plus $8.2 million in the landfill account despite transfers out in 2017 to help cover costs of the new Public Works facility and 911 addition at the Emergency Management Office.
Finding new revenue sources
To make sure the fund balance continues to grow, Commissioners provided a variety of ideas of where new revenues could come from without having to raise the millage rate on property owners in the coming years.
For instance, County Commissioner Scotty Tillery wants the county to look at the potential for self-insurance for covering county vehicles, while maintaining a company to provide liability insurance on everything in the county fleet. His idea is that by keeping a pool of money available to repair or replace vehicles damaged in wrecks rather than having to pay out monthly bills for automotive insurance, the county might save money overall.
Additionally, he said that by making county employees who get into a wreck and are found at fault cover repair costs up to a certain amount, the likelihood of employees driving more carefully would increase and save money over time.
Hulsey also briefly asked for more information about another idea to provide the county with additional revenue to cover the costs of running the Polk County Jail: charge inmates for their stay. Several municipalities across the country are engaged in the practice, but currently the cities, county or state or federal prison authorities cover some if not all the costs for inmates.
The idea was also floated to increase the amount charged for fees on bonds when anyone charged with a crime is allowed out of jail in trade for cash or liens on property until cases are resolved.
Using county purchased gasoline at the new fueling station has also brought down fuel costs in many departments, but not all, since it is not always convenient for employees to drive back to Cedartown to fill up their tanks. However commissioners requested Denton make sure departments are utilizing the new fuel farm next to the Polk County Police Department as much as possible, since fuel purchased in bulk by the county comes in much less than consumer prices by the gallon at the pump.
Commissioner Jose Iglesias also brought back up a question he’d asked before about collections on property taxes already owed, and when the county holds tax sales. Tax Commissioner Kathy Cole usually gives taxpayers no more than three years to pay back any back taxes, interest and fees they owe before putting a property up on the auction block.
“We had almost $400,000 on the latest tax sale list,” Iglesias said. “So if we’re waiting three years to collect and it is based on a preference, we should be able to consider going from three years to two.”
However that process is ultimately up to Cole, who as tax commissioner is responsible for collecting property and sales tax revenues in the county, along with the fees collected annually on older vehicles and now ad valorem taxes and annual tag fees sent onward to the state, a portion of which later comes back to county coffers.
And there’s a lot the commission wants to spend money on in the future that will require additional revenue to cover.
Department heads across the county government have all requested additional funds for increasing salaries for their employees. The county is looking at changing the retirement rules to allow those who are under 60 but have put in enough years to come to the number 80 to leave service without penalties early.
Then there are unexpected costs that are coming up now, like the need to remove a large amount of brush collected during storms over the past years requiring contractors to grind it down and cart it away that will be costly, expected cost thousands. Projects the state is helping fund like Polk County Airport’s runway extension and widening and repair of Cherokee Road will require matching funds that weren’t included in the budget in FY 2018 to undertake immediately.
Of course there’s always unexpected maintenance on vehicles, or culverts that have collapsed that need immediate repair.
Additionally, Commissioner Hal Floyd has an initial proposal to provide raises to law enforcement officers in Polk County as well.
One thing that Commissioner Chuck Thaxton added that he wants to be funded in the years ahead is cash set aside for future generations to be able to work on solid waste disposal issues in order to avoid problems in the years ahead.
“The reason I say it is because financial reasons is why they (past boards) got into the mess they got into,” Thaxton said. “Lets make sure we’re not in that financial mess again in 26 years or whatever.”
What’s ahead
The good news is that one budget year follows another.
Denton, Dulaney and Commissioners are already forming a schedule of meetings with employees, hearing items from committees and have two budget work sessions already planned for mid and late May to ensure everything adds up for the FY 2019 budget.
Ideas are being floated to find additional revenue sources. Then in August, the commission will have to approve an annual millage rate on property taxes for bills to go out to homeowners, and before year’s end a audit will be completed on the FY 2018 budget to ensure everything tallied up correctly.
The cycle continues, so long as the money keeps coming in.