April 26, 2019
By: Dwayne Page
The county has been digging into its savings account (surplus or fund balance) for the last couple of years to fund the government (county general) and unless it can tap into new sources of revenue limits may have to be put on any new spending in the upcoming budget year.
During Wednesday night’s budget committee meeting, the county’s financial advisor Steve Bates warned that the revenues are not keeping pace with expenditures in both the county general and capital projects fund. The county general funds the county offices, sheriff’s department, library system, ambulance service, etc. Capital projects is a fund set aside to make repairs or improvements to buildings, purchase vehicles, etc. Although the county helps fund and has to approve them too, the road department and board of education operate under their own budgets
Bates said sooner or later the county is going to have to face this revenue problem.
“The general fund has been going down. For the fiscal years 2017 and 2018 the county went into cash (surplus or fund balance) both years and probably will this year. The trend is there and the longer you wait the worse it’s going to get. I don’t have all the general fund expenditures plugged in but just copying and pasting what we had last year together with what has been approved in pay raises it doesn’t look good. You are at a point now where you are going to have to make a decision on where you want to take this county going forward,” said Bates.
“We have now found ourselves at a pivot point in DeKalb County. You have a capital projects fund but at some point if you keep depleting it you are going to have to replace it. It’s a great fund. I remember we created that fund with $15,000 several years ago and it has been a savior many times. When that tornado came through in 2011 as we were working on the county complex all that money to make the repairs came from the capital projects fund. If you want to keep paying cash so you don’t have to go to the local bank to borrow money for capital projects like buying patrol cars we need to keep a strong capital projects fund,” said Bates.
Strong fund balances also help support the county’s bond rating. “You have one of the lowest debt per capita ratios of any county in the state of Tennessee and among the strongest fund balances of any county I work with and an A1 bond rating which is excellent. The county has done a really good job but you need to maintain that. If the county has plans to build a school you need to protect your cash position now. You don’t want to go to market reluctant to raise revenues. You want to go with strong cash balances,” added Bates.
Budget Committee Chairman Dennis Slager said he would like for the county to explore alternatives for raising revenue other than turning to the taxpayers.
“There is no way we can move forward on this new budget without going into cash (surplus or fund balance) or raising revenues. Our county is growing and our services are expanding and its beginning to cause a strain on the county because revenues are not keeping up with it but I am looking for other avenues for revenues. I really believe we can raise some short term revenues real quick. In this budget I believe we can put together some revenue increases probably at least a couple hundred thousand dollars that won’t be property tax increases. Revenues that will hopefully offset some of the mandatory spending we’re going to have to do or spending we choose to do. There are numerous things we are not charging for as a county. For example if you come before our planning commission to bring plats we don’t charge a dime. We also need to adjust our court fees to bring in more revenue. All this may seem small but it all adds up,” said Slager.
“I think we have to fine tune the budget in front of us and check other revenue sources and then after this budget is voted on and passed I think we have to immediately start working on how to pull us out of the rabbit hole to get revenues back where they need to be. This is very serious. We are going into the savings account to fund the government and you can only go so many times. We did last year and we’re headed that way this year big time. Salary increases last year were not funded and now it’s like a double dip with state mandated pay raises and local step raises that have to be funded. This amounts to $750,000 to around a million dollars in new money we’re having to fund from this years and next year’s budget,” added Slager.
The current county property tax rate of $1.8335 per $100 of assessed value is distributed as follows:
County General: 0.9635 cents
Highway/Public Works: 0.03 cents
General Capital Projects: 0.10 cents
Debt Service: 0.13 cents
General Purpose Schools: 0.61 cents