Jul 8, 2012 - By Martin Reed, Staff WriterAll eyes on falling gas revenue
After asking department managers for a 5 percent budget cut, the Fremont County Commission is banking on receiving at least $1 million in federal funding to create an annual spending plan on par with last year's.
Yes or no?
Congress has yet to decide whether to allocate the full $2.2 million in funding known as payment in lieu of taxes, or PILT, for Fremont County. Other local governments throughout the country may also receive funding.
"The budget was hinging on the PILT funding, and we went ahead and budgeted for half," said commission chairman Doug Thompson.
Historically, federal leaders have allocated the funding that supports local governments, Fremont County Clerk Julie Freese said.
"We added in a million in the hopes, because they've done it for 30 years, we're going to get at least half," Freese said.
If the federal funding does not come through, the commission may trim budgets or use the county government's cash reserve to supplement the lost revenue.
Natural gas impact
The concern driving the commission's budgeting philosophy this year takes into account worries about the spending plan starting in July 2013 when falling natural gas prices will take their toll on revenues.
"If we do get that (PILT), we know next year it's going to be worse," Freese said. "The assessed value is expected to drop by about $70 million, proposed at this time. As usual when we look two years out, we've tried here at the county to mitigate that and hold off some reserves so it helps us out next year."
During budget hearings in past weeks, commissioners heard concerns that the budget cut would lead to layoffs because personnel costs were the largest expense for the departments.
"We started off ... not considering PILT, but some of the cuts in personnel we were having to make would be hard to resurrect or to re-employ after you sever somebody's employment, maybe six months down the road, five months, find out you have funding," Thompson said. "This budgeting of half of the PILT gave us the flexibility of having to avoid unnecessary personnel cuts. There are probably some amounts in there that could be shaved, several thousands dollars up to $10,000 or $20,000. We'll have time to propose those when we adopt the budget."
Commissioners will hold a public hearing on the proposed budget at 5:30 p.m. Monday, July 9, in their chambers at the county courthouse in Lander. They will officially adopt the new fiscal-year budget during their meeting the next day.
Commissioners describe the proposed budget as "static," meaning expenditures for county departments are roughly the same as the current general fund spending covering day-to-day business at nearly $22 million.
Overall, the general fund budget that covers major departments -- including the Fremont County Sheriff's Office, roads, county attorney and most courthouse offices -- totals $32.7 million, including $8.4 million in a cash reserve account and $950,000 in the transportation department inventory.
The budget uses an estimated assessed valuation of $990 million, but the amount could exceed $1 billion -- providing extra revenue derived from an increased value of the mill levy.
The idea of budgeting money that remains questionable is not sitting well with at least one commissioner.
"I am disappointed that we're using revenue projections from PILT for $1 million when we don't know if and when we're going to get it," said commissioner Keja Whiteman.
Whiteman cited a work session commissioners attended in late June.
"That whole exercise in reducing individual budgets was pointless because all the money was returned," she said. "And I think any time you can cut money from budgets without affecting services is a good exercise in conservative spending."
Whiteman criticized the decision to return department budgets to a static level rather than cutting when possible.
"We have no idea if and when PILT payments may come in, and I think the wise thing to do is to budget without it, and if we get it in, to add it into the next year's budget, the 2013-14 budget. That would be much more wise on the part of the commission," she said.
"I don't run my personal budget like that. I certainly don't want to use other people's money and county money like that."
Thompson said the static budget is not extravagant.
"The 5 percent (cut) was trying to address the complete loss of PILT, and by budgeting half, we can still go back to that 5 percent on select cases," he said. "However, we can kind of maintain a working budget that is, I think, still fairly bare bones. We have said no new hires, or by a case-by-case basis there have been some approved, and some are kind of conditional, and no raises."
The PILT funding could provide support to other areas neglected in the proposed spending plan.
"One of my thoughts is if we get some assurance of a continuing payment of PILT, as the federal government should, we could possibly do a bonus or something when that revenue picture becomes clearer," Thompson said. "It gives us an opportunity to maybe address -- we raised the cost of health care a little bit -- we might be able to address that and keep everybody equal or on an even keel."
Concerns about the spending plan for 2013 and beyond continue to loom in the budgeting process, Thompson said.
"I think we're putting the pieces in place right now that will allow us to probably have an even budget or maybe a slight downturn without totally having to cut some very important services to the county by doing what we're doing this year," he said. "We could go ahead and spend above our revenues and hire people and make like everything is wonderful ... but we know it's coming so we're trying to take some intermediate steps at this point looking two years out and maybe even three."
Fremont County Commissioners hold a
public hearing on the
budget at 5:30 p.m. Monday, July 9, in their chambers at the county courthouse in Lander. They will officially adopt the new fiscal-year budget during their meeting the next day.
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