By Jessie Burchette
jburchette@salisburypost.com
Faced with a $1 million shortfall in the current budget, Rowan County may force some employees to take unpaid days off or eliminate some positions altogether.
Or county commissioners could opt to use $1 million of the county’s $20 million fund balance.
County Manager Gary Page detailed the revenue shortfall Monday night, offering possible alternatives to fill the $1 million gap.
Commissioners talked briefly about possible courses including whether the board or Page will decide where to make budget cuts. Board members agreed to discuss the situation in more detail next week at their three-day retreat at the Tadlock South Rowan Library.
Page gave commissioners a financial report showing the revenue picture. Overall, the county’s revenue is expected to be short $1.7 million.
Measures implemented in October ó including a hiring freeze followed by a 5 percent cut in departmental spending ó are projected to save $761,000.
On the revenue side, the county has seen a major decline in sales tax receipts, down $600,000, and in building permit fees, down $400,000. Other revenue sources, including money from park usage and Health Department and Social Services fees, are also down substantially.
Page said counties typically experience a downturn about every 10 years.
“This may be the worst in 30 years,” he added.
After delivering the bad news, Page provided good news.
“You have money. You have $20 million in fund balance. … The (Local Government Commission) requires fund balances for times like these.”
Rowan’s fund balance stands at about 22 percent of annual operating costs, the state average for counties of similar size.
Page said the board can decide to use $1 million from the fund balance or direct more cuts, including asking employees to take days off without pay or eliminating positions. “We are down to our last options,” he said.
Commissioners Vice Chairman Jon Barber said some employees would take a serious financial hit if they lose days. He said the board should make the decisions about cuts, not the manager. He also noted some cuts in departmental budgets could cause the county to lose state and federal funds.
Commissioner Chad Mitchell said he prefers the manager make decisions about unpaid days off, saying Page would have more flexibility.
“Let the manager manage,” Commissioner Raymond Coltrain said. “He needs to make the decision.”
Commissioner Tina Hall urged the board to be careful in using the fund balance. Last June, she noted, the board used $8 million from the fund balance in the current budget.
Responding to Hall’s questions, Page said if no further cuts are made, the county will not spend $7 million of the $8 million budgeted.
If the county spent the entire $8 million of fund balance money included in the current budget, the fund balance would dip to $12 million by June 30.
Looking forward, Page said he will have 90 days to craft the 2009-2010 fiscal year budget.
He warned it will be a tough budget with no pay raises for employees and cuts to services and programs that aren’t mandated by the state, including county contributions to non-profit agencies.
Page also talked briefly about establishing an efficiency committee to look at an array of issues including benefits, possible privatization of some services or operations and elimination of services and positions.
“This is a year of reassessment … a year of right-sizing,” Page said.
This will be his first budget in Rowan County. The budget process was well under way when the board hired Page last April.
Contact Jessie Burchette at 704-797-4254.