Rescue plan

Commissioners diverge on bailout spending | Local News

Whether Lawrence County should use its one-time allocation of federal funds to fill county budget shortfalls is a point of contention between two commissioners.

Sentiments on government spending were aired between Commissioner Loretta Spielvogel and Commissioner Chair Morgan Boyd on Tuesday. Their positions were considered by the third commissioner, Dan Vogler, as “a healthy discussion”.

Spielvogel publicly disputed Boyd’s comments at an earlier meeting that if the county did not tighten spending, it could face a $1 million deficit in a few years, which could result in higher taxes or possible layoffs.

And while Spielvogel suggests using some of the one-time allocation of COVID funds to fill holes in the budget over the next two years, Boyd thinks those funds would be better spent on infrastructure to promote future development to to generate more tax base.

He said the one-time allowance will run out, fearing that if unnecessary county government spending isn’t cut, the county could be looking at potential tax increases or layoffs in a few years when that money is gone.

Spielvogel, reading a statement prepared Tuesday, said she “begs to disagree” with Boyd’s assertion that the county’s surplus fund is shrinking.

She said that because of her earlier comments, she had received calls and texts from employees worried about their jobs and from residents worried about higher taxes due to the deficit.

She touted the previous Trump administration for providing funding during COVID through the CARES Act to help government entities continue operations without cutting services. As COVID continued, the Biden administration provided more funds through the American Rescue Plan Act (ARPA), she said.

Lawrence County receives $16.8 million in ARPA funding. Half was received last year and a second installment is expected in August or September this year, she said.

She estimated that “of this amount, we can use up to $10 million at our discretion.”

Reading a financial report from the county comptroller’s office, she noted that the general fund currently has $6.184 million, the COVID fund has $8.292 million, a capital expenditure account has $1.5 million ( for building improvements) and operating reserves are at $2.75 million ($250,000 less than Boyd had projected).

“That’s a total of $18 million in our bank accounts, not including an additional $8.4 million coming later this year,” she said.

A BUDGETARY PHOTO

Boyd explained in a conversation Thursday “there’s a difference between cash flow and budget.”

The county’s bi-weekly payroll costs between $500,000 and $1 million. The county pays $6.2 million a year in health insurance to cover all county employees, he explained. “We are cash-poor in January and cash-rich in April when taxes come into effect. The general fund has $36 million. We don’t just get that in January.

On the contrary, it accumulates as the tax money arrives.

In addition to covering operating expenses, the county earlier this year borrowed $2.5 million with 0.92% interest in a tax revenue anticipation note to meet county expenses up until the property tax money arrives, and he still owes all of that debt, according to information from the county treasurer’s office.

Treasurer Richard L. Rapone said the first installments will be made at the end of the tax cut period in May.

The county learned Thursday that its County Assessment Office software needed to be replaced, an unbudgeted or anticipated expense of more than $500,000, because the program is no longer supported, Boyd said. This money will likely come from COVID funds.

The replacement of the roof of the courthouse at a cost of $750,000 will be paid for using funds from the capital reserve fund. The information technology upgrade across the government hub will cost $1 million, with money already designated from COVID dollars being managed through the Capital Reserve Account. Boyd noted that very little of a penny in the capital reserve account is budgeted for specific capital projects.

“It’s not money for rainy days,” he said.

Although the county is allowed to use its federal COVID money for infrastructure improvements such as water, sewer and utility expansions, and improvements to the airport and its parks, “in this as far as I’m concerned, we’ll use the money first to get us through any shortcomings we come across,” Spielvogel said, adding that the county needs to control spending but is not on the verge of bankruptcy. .

“This is probably the first time the county has had such a monetary surplus, and it will likely never happen again,” she said. “I know I only have one vote, but I will say here and now that I will not vote to cut services, lay off employees, or raise taxes while there is at least $10 million left in our Bank accounts.”

Boyd argued that the COVID money “isn’t excess funding, it’s reserve funding.”

The county’s general fund by next year will be $40 million, with a likely shortfall of $1 million, he projected, telling the meeting that it is “fiscally irresponsible and atrocious a fiscal policy of drawing on reserves without any expectation of replenishment or replenishment of these reserves”. , because you are creating a huge budget deficit. That’s what we saw in 2018 and 2019, and that’s what drove us to raise taxes in 2020.”

The reality was a deficit of more than $2 million in 2018 and 2019, he said. When the current Board of Commissioners took office, its only choice, due to past spending, was to raise taxes or cut services.

“We chose to take the decision – unanimously, I might add – to raise taxes.”

“With these reserve funds right now, the only scenario where we won’t have to raise taxes after spending this funding is if we invest in economic development and infrastructure,” he explained.

“While we expect one-time federal stimulus funding to fill a fiscal gap that is not the result of COVID-19 – and our revenues have stabilized at pre-COVID numbers – any deficit we incur will not won’t disappear if we exhaust our reserves,” he continued. “You’re advocating a huge tax hike if we exhaust that reserve,” Boyd told Spielvogel.

He reminded her of his campaign quote in the newspaper when she was running for commissioner: “The budget is tight and we need to make sure the money is spent wisely. If we can only afford burgers, we can’t go out and buy steak, or sooner or later we won’t have money to buy burgers either.

She responded that she will “definitely advocate” that COVID money should be used to stabilize the budget, and that infrastructure funds may possibly come from other state and federal funding sources.

“You can’t budget for hope,” Boyd said. “You have to budget on facts, statistics and realities. I will not vote for an unbalanced budget until 2023. If we use this funding to fill operating deficits, it could be a safety net for a few years, but you will be heading for an incredible amount of economic pain because of a tax increase – or in the form of staff cuts – because that is the only area of ​​operation we have left to dig into. This is where we are right now.

Vogler said the county is lucky to have received federal CARES money.

“With the US bailout money, we have the opportunity to strike a healthy balance between the internal needs of this organization and the needs of our community,” he said.

He said other counties are looking to spread their ARPA dollars over how they are distributed in the community and maintain a level of property taxes over the next two years.

“The county government has only one main source of revenue, and that is property tax,” he said.

“I look forward to having healthier discussions and reaching a consensus that allows us to balance our internal needs and the external needs of our community. I’m ready to achieve that,” Vogler said.

OFFICE EXPENSES

IN QUESTION

Boyd had also criticized the spending of the Commissioners Office for three permanent offices – one for Spielvogel and two of the Commissioners Office staff. He had vetoed the purchase, but Spielvogel and Vogler approved it.

Spielvogel disputed Boyd’s claim that the desks cost $900 and that the money was not budgeted.

“Desks were $600 and one was for me,” she said. “They weren’t specifically (detailed) in the budget, but neither are paper clips, staples, pens, paperclips, etc,” she explained.

Attempts to obtain the exact cost of the offices from the county comptroller’s office failed on Thursday because not all invoices had yet been received. According to an invoice, the total projection for the purchase was around $730.

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