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Budgets: County will draw on reserves to prevent employee pay cut
By Jackie R. Broach
Georgetown County will need to draw from its reserve fund to balance a 2013 budget that meets the criteria set by County Council: no tax increase, no decrease in services and no pay cut for employees.
It’s the same thing the county did last year to make ends meet, but this time it will need to use less than half as much from the reserve. The balance in that fund will stay well above the county’s self-imposed limit of $8 million.
A draft of the 2013 general fund budget presented to council this week calls for using $430,000 to $450,000, from the reserve. That includes $380,000 that would allow the county to maintain the 3 percent pay increase for employees that was approved last year.
The county drew $952,000 from the reserve last year to balance the budget. With the proposed transfer of funds, the reserve is projected to reach a low of about $8.4 million in 2014. A five-year projection shows the reserve starting to grow after that and reachingabout $9 million by 2017. Additionally, the projection calls for annual raises to be reinstated starting in the 2014 fiscal year.
“That could change next year, but at least the way we designed the numbers here, we see a 3 percent increase in 2014,” said County Administrator Sel Hemingway.
County employees haven’t had an annual raise in three years, since council approved a 3 percent pay cut for all employees and put cost of living increases on hold to help balance the 2010 budget. The one-time salary supplements of 3 percent they got last year, and are on track to receive again this year, doesn’t carry over from year to year the way a raise does. If council doesn’t fund the supplement, salaries will revert to 2010 levels.
The other good news in the budget for employees is that department heads were asked to maintain 2012 funding levels rather than make cuts.
“We felt like due to the fact that for the last three years we’ve asked them to cut expenditures, we had gotten to a point where there was very, very little left to carve out,” Hemingway said.
The challenges with rising costs the county saw in prior years continued this year. The county has already been notified it will pay more for health insurance, retirement benefits and workers compensation premiums.
Fuel costs are also expected to be higher. Though the most recent projections show the cost of gasoline going down this summer (prices have already started dropping in recent weeks), that’s an annual pattern and whatever the low is, it’s still likely be higher than last year’s lowest price.
“The constant is that every spring the floor is a little bit higher than the previous spring. We have no reason to believe that’s not going to be the case this year,” Hemingway said.
Additionally, the county has lowered its revenue projections for property taxes and fees related to the building industry and real estate business. The projected revenue growth for fees from building permits was reduced from 25 percent to 10 percent, and projected growth for property tax revenue was reduced from 3 percent to 2 percent.
It looks like the state legislature will increase local government funding, offsetting increases in uncontrollable expenses (such as workers compensation) and slower than expected revenue growth in some areas. There are no guarantees yet as to what local government funding will be, but county staff will continue to closely monitor legislative action to see how it affects the county budget.
County Council Member Bob Anderson asked about revenue at the landfill, something the county struggled with when it went through the budget process last year. It was operating in the red, and the deficit was projected to increase annually.
“Thankfully we saw increases in volume and gross tipping fees in the last year that alleviated that,” Hemingway reported.
Council has already given conceptual approval to the proposed budget. Second reading and a public hearing will take place May 22. Final reading is scheduled for June 12, which is also the day of the party primary elections.