recommendation of a 2.5% salary increase for county administrative employees and commissioned sheriff’s deputies is part of the county auditor’s recommended budget for 2019.
Auditor Kevin Robinson released his recommended budget last Thursday. His document is a recommendation only, as final budget authority rests with the three member county commission. The county commission will finalize and approve a 2019 budget in January.
Noted in Robinson’s explanation of his recommendation is that Sheriff Mark Owen had requested another half of million dollars in salary increases in the sheriff’s department. The sheriff’s office requested wage increases of $3,500 per commissioned officer. The sheriff also requested to add four additional positions.
“Funding these requests would increase the general fund budget by an additional $500,000, approximately. Reductions in expenditures or additional revenues are required for these requests,” Robinson wrote in his proposed budget document.
Robinson pointed out “the 2.5% recommendation is equal to the rate approved by the Salary Commission in 2017, which applies only to elected officials with terms beginning in 2019 or 2021. The last approved cost of living adjustment for elected officials was 2009 to wages set in 1997. Elected officials are excluded from the 2.5% wage adjustment recommendation for the county employees.”
Robinson recommends transferring only $273,000 from the general fun into a reserve fund, “including $121,500 to replenish the available balance for 2018 expenditures driven by unanticipated expenses.”
Robinson said this $273,000 into reserve is down from the $1 million transfer into reserves in 2018. He said the drop in the amount of money being placed into reserves is due to increased budget requests by law enforcement, corrections and prosecution.”
Another interesting aspect to Robinson’s proposal is his recommendation to budget $859,614 for potentially covering a shortfall in tax collections at Zona Rosa necessary to make bond payments. In 2018 the county had budgeted $634,501. There is a one percent sales tax at Zona that goes toward those bond paymetns but it has traditionally come up well short.
“This proposed transfer is for budgeting purposes only. The proposed amount enables the county commission to understand available cash after operational requests, and what cash would be available for unforeseen events. The decision whether to transfer funds, appropriate funds, or issue payment is made solely by the county commission,” Robinson said.
“The full 2019 Zona Rosa TTD payment is proposed in Fund 4900. The 2019 total payments to be made by the Trustee on the bonds are $2,227,000, compared to the 2018 of $2,134,500. The bond payment schedule has several graduating variables which increase the payment annually,” the auditor added.
“The additional amount anticipated in 2019 to potentially cover the collections shortfall is an estimate only. Actual shortfall in collections at the time of release of the auditor’s recommended budget is unknown. The bond payment by the trustee is due Dec. 1, 2018, following the release of the auditor’s recommended budget. Additional information is anticipated to be included in the 2019 Commission Proposed Budget, to be released by January 20, 2019,” Robinson said.
Robinson’s recommended budget includes a transfer of $411,000 into a fund for deferred maintenance and capital improvements. “This, with $231,000 in projected cash carryover, the county has funding for deferred maintenance and capital improvement projects,” he said.
In the revenue department: •Sales Tax – the auditor’s Recommended Budget includes a conservative estimation of approximately $9,150,000, a 4.75% decrease to 2017 actuals collections or 4.0% less than the estimated collections for 2018, or an estimated $385,000 less collections. With recent economic development and retail, it is reasonable to anticipate sales tax collections increasing marginally.
•Use Tax – the 2019 Auditor’s Recommended Budget includes an estimation slightly over prior years, $4,250,000, which is approximately $299,000 less than the estimated collections for 2018, or $114,000 over 2017 and similar to 2014 and 2015 collections.
As for insurance, Robinson wrote in his proposal: •Partially Self‐ Funded Insurance – To manage the increasing cost of health and dental insurance, the Commission approved in 2016 a multi‐year plan to adopt a partially self‐funded county‐provided medical insurance plan. By design, self‐funding strategies enable the county to control the investment in medical benefits for the county employees. The 2019 plan coverage and contribution rates, as determined by the Commission, are consistent with the rates in 2018.
•Fund 1015 – Self‐Funded medical insurance has an estimated 2019 beginning reserve balance of $371,000 up from $295,000 in 2018. The change in fund balance is primarily due to participants plan election and reduced claim expenses to the County.
•Expected Claim Rate (ECR) and Administration – For 2019, the ECR is $1,425,000, and fixed administrative fees of $751,000 for a total of $2,176,000. Health insurance plan increased 5.4% over 2018.
•County Contributions – In 2018, the county incurred claims which realized the benefit of the self‐insurance plan falling below the expected claim rate, the maximum exposure to the county for health insurance. Following open enrollment, the rates for 2019 will be adjusted from the auditor’s recommended to a rate based on participants’ elections of coverage.
•Sliding Scale – The 2019 plan coverage includes a sliding scale for county contributions. Prior to 2018 the county had a fixed contribution rate. The sliding scale strategy is designed to reward employees for selecting the plan with the best negotiated provider rates, thus reducing the amount of claims submitted for medical services provided.
•Budgeting – For purposes of developing the 2019 auditor’s recommended budget, current enrollment is used to establish county contributions for 2019. Based on current data and the adopted sliding scale, 2019 contributions are $2,402,000, down from $2,595,000. These rates are anticipated to meet the required funding of the plans maximum liability for 2019 of $2,176,000.
•Terminable Clause – The partially self‐funded medical insurance policy adopted by the commission has a maximum run‐out risk in 2020 of an estimated $145,000, should the plan be canceled at the end of 2019. The program contains reinsurance and stop loss gaps which mitigates the risk to the county.
The adopted budget is the county’s financial plan which reflects legal spending limits for each of the administrative authorities. During the course of the year, unforeseen and operational necessities may require revisions to the budget.