Further cuts to be discussed by BOC

For the second year in a row, the new budget has been balanced with what Yearwood has characterized as “Band-Aids” that will not be available in FY2012, when the financial challenge could be more serious.

In addition, the reserves available in FY2011 are expected to drop to about $3.3 million, which is enough for roughly one month of expenses instead of the recommended three months.

The administration recently liquidated a $2 million certificate of deposit, setting aside about $1 million to make sure payroll can be met until property tax revenues replenish accounts in December.

BUDGET MAY NOT BE VIABLE
So even as the public process for the new budget began Tuesday, there was a real question of whether there will be enough money to cover its planned expenditures. Right now, the $31.5 million spending plan is balanced on paper. However, it projects only $40,000 more income than expenses. In each of the past five years, the government spent an average of $1.7 million more than it took in.

As a result, the county’s reserves dropped from $10.8 million to $4.7 million, and when the current fiscal year ends Sept. 30, the reserve balance is expected to be down to about $3.3 million.

That is roughly enough to cover one month of county operations.

Asked point-blank by Commissioner Billy Parks if the $31.5 million revenue projection in the budget is valid, Yearwood said it is. But he said any unforeseen expenses could render that inadequate.

“The only thing that would change it, Bill, is if we have an emergency expenditure like big (prisoner) medical bills or other unforeseen expenses that come into the county. We don’t have any way to pay it.”

Yearwood said the BOC would have to hold the line with department managers, who for the first time in recent memory, would not have the option of coming back to ask for any more money.

“We are going to have departments early on come in to say ‘I need this and I need that,’” Yearwood said. “It will be up to this board to say, ‘Sorry, we do not have the money.’”

If unforeseen, but required, expenses arise during the year, the board will have to cut spending in other areas to free up the cash, he said.

“It’s going to come to the point where we either start unpaid holidays, start furloughs, or start cutting personnel. And that is the only option we are going to have. We do not have anywhere else to go.”

He added: “They’re the only Band-Aids we have left.”

For more on this story, see the September 1 edition of the Barrow Journal or click here to read the full story online when you subscribe to our new e-edition.