By Jessie Burchette
jburchette@salisburypost.com
Faced with a projected $4.7 million budget shortfall, Rowan County commissioners approved a series of measures Monday night to fill the hole, including unpaid days off for employees, and a 1 percent cut in school funding.
Less than two months ago, county officials had projected a $1.7 million shortfall.
In the past two weeks, the state opted to take $580,000 in lottery funds. Sales tax figures received last week showed sales fell off a cliff in October and November.
Although December sales tax collections improved dramatically ó up 28 percent over November’s totals ó County Finance Director Leslie Heidrick said nobody knows what the final figures will be.
Heidrick and County Manager Gary Page estimate sales tax revenue will be $2.5 million short by the end of the current fiscal year on June 30.
“Hopefully that’s the worst case-scenario,” Heidrick told commissioners.
Heidrick and Page gave commissioners a revenue sheet showing the total $4.7 million deficit. Almost every category of county revenues is projected to be below the budgeted level.
“We do have a good fund balance. It can’t take a $4.7 million hit,” Page said.
He offered the board six recommendations to reduce the deficit by $2.8 million, leaving $1.9 million to be taken from the fund balance.
Page repeatedly cautioned that if the state opts to take more money, the deficit could grow dramatically ó and more drastic measures will have to be taken.
Commissioners unanimously approved all the manager’s recommendations. But they urged Page to wait until June before taking 1 percent from the county’s current expense allocation to the Rowan-Salisbury and Kannapolis City school systems, hoping improved revenues will make it unnecessary.
If made, the cut to the school systems’ budget would total $345,000.
Commissioners also struggled with a recommendation to give all 750 full-time county employees one day off in April, May and June at a savings of $400,000.
When Commissioner Raymond Coltrain suggested commissioners also take a one-day pay cut for those months, Heidrick responded she had already included that in the calculated savings.
Page said the specific days for the furloughs will most likely be the Monday after Easter, the Friday before Memorial Day and June 30, the last day of the fiscal year.
Other steps to offset the shortfall include:
– Delaying capital asset purchases and fixed asset purchases, saving $400,000;
– Medicaid assistance from the federal stimulus package, a total of $680,000;
– Financing a new Rowan-Cabarrus Community College classroom building instead of paying cash, saving $1 million now.
Commissioners took some solace in not having to eliminate any positions.
Vice Chairman Jon Barber expressed concern, though, that potential cuts will eat into the 4.1 percent cost-of-living increase commissioners gave county employees. Hall noted the 4.1 percent cost of living increase is a $1.3 million recurring expense.
Commissioners Coltrain and Chad Mitchell urged Page to look at potential savings by operating county offices on a four-day work week during which employees would work 10-hour days.
Looking to the upcoming budget, Page said the RCCC project and a planned Town Creek Sewer project could be packaged in a loan, reducing the county’s cost next year by more than $1 million.
Calling the current situation “crisis management,” Page said Rowan’s fund balance will have to support the county for 2010, acknowledging commissioners won’t raise taxes in such tough times or with an election looming next year.
With the prospect of dipping into the fund balance for $4 million or more, he said the current $20 million account could drop to $12 million ó equal to the 8 percent of annual operating expenses recommended as a minimum by the Local Government Commission.
Mitchell laid much of the blame for the economic woes on President Barack Obama for his negative assessment of the economy and the stream of negative news. And commissioners took turns bashing the state for taking funds earmarked for the counties and schools.
Hall expressed concern the state will continue to make more severe adjustments, taking more money.
The board unanimously approved a resolution offered by Barber opposing Senate Bill 386 and Senate Bill 2, which would allow the state to take lottery proceeds meant for education and corporate income tax revenue.
The county’s legislative delegation will be asked to vote against the two bills.
Contact Jessie Burchette at 704-797-4254.