Oconee County commissioners got the grim news tonight that the gap between budget requests and revenue projections for fiscal year 2012 is a whopping $3.8 million, rather than the roughly $2 million difference discussed earlier.
The immediate response of the commissioners was to ask Finance Director Jeff Benko to come back to the Board next week with a budget frozen at the 2011 level of $20.8 million and to find a way to balance that budget.
That won’t be easy.
The revenue projection is $18.8 million, and the fund balance–the county’s cash reserve–is very close to what Benko said he considers to be the minimum required.
|Davis at BOC, 5/17/2011|
That balance as of June 30, 2010, was $9.6 million, but the county set aside $1.1 million of that to balance the 2011 fiscal year budget, which ends on June 30. How much of that is going to be needed to cover expenses still isn’t known, Benko said.
Benko told the Board of Commissioners that $4 million has been set aside to be used to purchase rights of way for the widening of Mars Hill Road. The state will reimburse much, but not all, of the expense, but the county gets the payments in lump amounts.
Benko said he thinks roughly $1 million could be taken from the fund balance for the 2012 budget, but that would leave a gap of about $1 million between the projected revenue of $18.8 million and a flat budget of $20.8 million.
Benko floated the idea of a millage rate increase as well as cuts in services.
Neither of these enjoyed support when Benko first mentioned them, but BOC Chairman Melvin Davis later asked Benko to explain both.
Benko said that the tax rate could be increased without resulting in increased tax bills for properties in the county that had decreases in valuation.
Davis suggested that service cuts could include the closing of the library or county parks for a day, and Benko agreed that was what he was suggesting.
Commissioner Jim Luke said that a millage rate increase would affect homeowners more than commercial property owners and developers, since home owners generally have experienced less depreciation of their property than is true for undeveloped and commercial properties.
He left little doubt he was not enthusiastic about a millage rate increase for that reason.
The county’s constitutional officers and department heads made budget request presentations to the commissioners in April. At that time, the county was projecting that revenue would be less than $19 million and requested spending would come in about $21 million. The budget requests were not final at that time.
Benko's presentation tonight at the called special meeting was the first public indication that the budget situation was worse than originally suggested.
The commissioners agreed to meet again at 7 p.m. on May 23 in the courthouse to see more precisely what a flat budget means for the various departments and officers and to explore precise ways to bridge the gap.