$2.4 million gap in initial Berrien budgetPublished 1:11pm Friday, July 12, 2013
BUCHANAN — The Redbud City got the first glimpse of Berrien County’s preliminary 2014 budget Thursday night as commissioners met at Buchanan Area Senior Center after touring Pears Mill.
County Administrator Bill Wolf intended to send his projections to department heads on Friday so they can begin sculpting $52.8 million in revenue and $55.2 million in expenditures to close a $2.4 million general fund “gap” by Aug. 23.
Revenues of $52.8 million increased $1.066 million from the 2013 budget.
Expenditures of $55.2 million climbed $3.466 million from the 2013 budget.
The 2012 audit is complete. Berrien County received an “unqualified result” on $50,006,438 in revenues and expenditures of $48,965,832, for a positive change in fund balance of $1,040,606. Berrien County ended 2012 with a general fund balance of $16,387,485 — an increase of $1,020,606 from 2011.
Wolf said his objective with the 2014 spending plan is to contain general fund spending at the projected revenue level, $52.8 million, without tapping fund balance. There would be the traditional $1.3 million transfer from the delinquent tax revolving fund.
Berrien County’s fiscal year follows the calendar, Jan. 1-Dec. 31.
Commissioners try to complete the general fund budget in October.
“We are very much at the front end,” Wolf said. “This is the first step of a very detailed process that involves numerous hearings with commissioners, committees and every department and elected official in this county. This year is a little different because we’re going online Nov. 1 with our new Munis software for finance and HR (human resources). You’re going to see us combine general fund and special funds and move them through the system at the same time.”
Special funds include 911 millage ($2.97 million), public safety millage ($2.3 million), senior citizen millage ($1.979 million) and parks millage ($625,120).
“We do this every year,” Wolf said. “Some numbers are sizable, intimidating, shocking, but I assure you, there is nothing particularly unusual about this presentation compared to the last eight I’ve done. We always start in the hole at this stage. That’s the whole purpose of this exercise, which I call the administrator’s budget guidance. The staff and I come up with some ideas of where we think budgets are going to be when they are submitted by the departments. They already know what they are expected to do to get this whittled down into a manageable form where revenues and expenditures match to meet the needs of the county.”
Real property taxable value increased 1.13 percent. Personal property taxable value declined 1.21 percent between 2012 and 2013, representing an estimated $810,000 gain overall in general fund tax revenues because an anticipated loss of $308,000 in personal property taxes did not occur.
“I’m predicting an increase of $370,530 in real property taxes over and above the actual last year,” Wolf said. “Getting ready for 2013, we anticipated a slight decline in property taxes — but it didn’t happen. The real estate market is not great by any stretch, but it’s getting better. I’m seeing almost a 10-percent increase in personal property, but it’s a relatively small piece of our overall property tax. It’s largely attributed to investment at the Cook Nuclear Plant.”
The county receives 80 percent of its revenue sharing, $2,366,492, with the 20-percent balance, $591,623, provided after it complies with three incentive categories, transparency, cooperation and unfunded accrued liabilities worth $197,206 each.
“We got all of them this year,” he said.
As recently as 2007, Berrien County earned $1.6 million from interest, compared to the $100,000 budgeted for 2013 and 2014. The state estimates $1,120,473 from convention and liquor taxes. Half is directed toward substance abuse prevention through Lakeshore Coordinating Council. The balance for the general fund, $560,237, increases $18,902 from 2013.
Salaries for 650 employees go up $600,000 due to bargained wage increases and steps.
Health care’s $800,000 budget impact was calculated with an assumption of a 13-percent increase — steeper than the typical eight to 10 percent — though the Affordable Care Act employer mandate delay could further change figures.
“In January 2014, everyone in the county will be paying 18-percent participation, which you as commissioners have been paying for several years,” he said.
Pension vesting increased to 10 years. “We are seeing a sizable increase in our employer contribution which will probably affect us negatively to the tune of about $525,000,” Wolf said.
Fuel consumption during the first five months of 2013 ran 4 percent over 2012, and that year consumed 4-percent more fuel than 2011. “For 2014, I projected a 2-percent reduction from the 2012 high” with departments expected to conserve, Wolf said.
The county doesn’t pay fuel taxes, so $3.40 a gallon equates to $3.90 pump prices.
Four bargaining unit contracts expire at the end of 2013: Probate Court (55 employees), District Court bailiffs (five employees), Friend of the Court (32 employees) and general county (188 employees).
This year a three-year change-out of 250 desktop computers was completed.
“This exercise has two purposes,” Wolf said. “I’m telling you where I think we are going into 2014. The other purpose is telling departments what to put into their budgets.”