PRESTONSBURG — County officials all wore pained expressions during a budget work session Wednesday, as they struggled with financial woes and a laundry list of tough decisions that will have to be made in an election year.
Three hours later, county officials were no closer to a consensus on a budget that will have to include significant cuts or an increase in revenue to account for a predicted shortfall of $600,000.
The county’s budget currently calls $15.4 million in revenue, with expenditures of $16 million.
The work session was attended by Magistrates John Goble, Hattie Owens, Warren Jarrell and Ronnie Slone, as well as Judge-Executive R.D. “Doc” Marshall, County Clerk Chris Waugh, Sheriff John K Blackburn and various other office personnel.
During the session, a list of proposed cuts were presented to the fiscal court by County Treasurer David Layne. The cuts included a wage freeze, higher deductibles on health insurance for county employees, having fee offices such as the sheriff’s office and county clerk’s office pay their own health insurance, removal of some line items including support of the LINKS program and Hope in the Mountains, increase of county garbage rates to $15, a 3 percent hotel tax, a reduction of wages in the jail, and a further reduction of line items including fire hydrants, economic development and placing park and golf course employees on seasonal status.
The county would not have to make all of those cuts, but would have to sufficiently account for the $600,000 shortfall. As an example, according to the proposal presented, having the fee offices pay their own health insurance could account for a savings of $410,000.
Both Sheriff John K Blackburn and County Clerk Chris Waugh objected to the proposal, saying that forcing them to cover the fees would not solve the county’s problems.
Waugh says that because the fiscal court is responsible for the fee offices, if they can’t afford the bills, the court will be responsible for them anyway.
“I want to do my part to help,” Waugh said, “but I just don’t see how by forcing us to do something, that you may end up having to pay in the long run, is going to help.
“You can’t say you’re going to gain in your budget, because if we can’t pay it, you’re going to have to.”
County Attorney Keith Bartley agreed, saying that the transfer of responsibility would only eat up the excess revenue that the offices generate for the county.
“Let’s say you tell Chris and John you got to cut $200k every year. Well, you lose their excess revenue, so it’s a wash,” Bartley said.
Sheriff Blackburn said that the county taking over the fee offices would not help.
“You all want to take over the fee offices, but if you can’t run the judge’s office,” Blackburn said. “How are you going to run the fee offices?”
“We did not say we wanted to take over the fee offices,” Marshall said. “That’s more work on me.
“I never, ever, said that I wanted to take control of the fee office. The only reason it was brought up is because that’s what other local governments had done.”
Bartley said the jail is the real cost that is dragging the county down.
“I think that we can save $1 million a year if we just closed that jail, sent everyone home, and sent prisoners to other counties,” Bartley said.
Closing the jail was listed among the options on the proposal, but according to the numbers provided by County Treasurer Layne, the savings would only be about $240,000, due to transportation costs, continued maintenance and upkeep on what would be an empty building, and the jail’s bond payment.
Several times during the meeting, Layne came under fire for the proposals being put forward.
“He’s your judge,” Layne said, referring to Marshall. “I don’t know why everyone is arguing with me. It’s my job to try to prepare a budget, where your revenues and expenditures match.”
The county’s budget is prepared at the behest of the judge-executive, but must be approved by the magistrates. The magistrates were openly against many of the cuts proposed Wednesday.
Magistrates discussed several other options during the meeting, including furloughs and hiring freezes. Though a suggestion to not refill the deputy judge’s position was rebuffed by Lois Marshall.
“The law says he (Judge Marshall) gets a deputy judge, whether you approve of it or not, and you set the salary,” Lois Marshall said. “A county this size absolutely needs a deputy judge.”
The former deputy judge, Barry Davis, resigned nearly a month ago to pursue a different career. The deputy judge is responsible for managing the county’s affairs in the event that the judge is out of the county or is otherwise incapacitated.
The proposed budget also called for the sheriff’s office to demand that the Floyd County School Board pay the sheriff 4 percent to collect the taxes. Currently, the office gets 2 percent from the collected taxes, which, according to Layne, leaves the office at a significant deficit versus how much it costs to collect the taxes. According to Layne, all of the surrounding counties get 1.25-to-2 percent more than Floyd County. Officials in the sheriff’s office said that attempts in the past to get the board to raise the percentage have been rejected.
The idea was put forward to simply refuse to do the work if the board will not agree to the rate increase, but Bartley said simply refusing to continue to do the work is not an option. “If you tell the board you won,t do it, then the sheriff is screwed, because they lose $180,000 and will have to lose 5 or 6 jobs.”
Warren Jarrell asked Judge Marshall what his proposal would be, with regard to the cuts which were proposed.
“My original suggestion was an occupational tax,” Marshall said. “We forgot about that, so we’re back to the basics here.”
Last year, Judge Marshall proposed implementing a 1 percent occupational tax on the county. According to County Treasurer David Layne, that would have brought in an estimated $3 million in revenue, which would have negated the necessity for budget cuts. The proposed tax was rejected by all the magistrates.
“It’s not that we want to see anybody suffer,” Judge Marshall said. “Facts are facts. If we haven’t got the money, how are we gong to pay it?”
District 2 Magistrate Hattie Owens said during the meeting that she felt Layne’s numbers were “off” and that the proposed budget was being used as a “scare tactic” to push the judge’s proposed 1 percent occupational tax. But according to Layne, based on current revenues and projected expenditures, the county has only enough projected income to push through until August, at which time the wheels fall off.
Also plaguing the council is the continued presence of phantom contractors bills allegedly owed to Anthony “Harpo” Castle, which have not been submitted for payment, but could be in excess of $500,000.
Layne says he told magistrates last year that he was told of the contractors payments and that the county would be broke this May. “It’s May, and we have $226,000 in the bank.”
Another potential pitfall facing the county going forward is a change to FEMA rules, which will no longer allow counties to be paid up front in the event of a disaster, and will instead require them to pay for projects and then be reimbursed. Everyone in the room agreed that a major disaster like the flood which struck in May 2009 could bankrupt the county.
Denzil Allen, who was present during the session, was asked to bring the court the projected costs of their health insurance. Court members are expected to meet again in two weeks.