With higher revenues outpacing an increase in expenditures, Person County is seeing a mid-year surplus, County Finance Director Amy Wehrenberg said in a presentation during the Board of County Commissioners’ budget retreat Tuesday.
Wehrenberg said the county revenues are up $6 million, a 16.5-percent increase over the last year.
Over half of that increase is due to the county’s receipt of American Rescue Plan funds, shown in the budget as “transfers from other funds.”
Other increases are seen in the county’s property taxes, which are up $1.2 million and sales and other taxes which are up $778,589.
Sales taxes are up $433,000 for the three months reported, Wehrenberg said.
The county’s revenues from state and federal funding are down as a result of the absence of COVID-related funds and a delay in state grant reimbursements.
“We think most of this is just a timing issue compared to the year before,” Wehrenberg explained. “I am hopeful that category improves as we go along through the year.”
Interest rate adjustments have resulted in a $193,109 increase in interest earnings, almost entirely offsetting the loss of state and federal funding.
“We are encouraged that the [tax categories] are showing some growth and we feel like this is a fairly positive indicator going into the rest of the year,” Wehrenberg said.
Wehrenberg said the sales tax income is expected to increase by about $520,000 over the previous year to a total collection of $12.3 million.
“And that is a worst case scenario,” Wehrenberg said. “That would only be a four percent increase compared to the prior year, but it is more likely that we’re going to see an increase of about 10 to 12 percent, pushing that sales tax collection total well above $13 million.”
County expenditures are up $1.7 million with the highest increases in personnel and transfers to other funds.
A four-percent cost of living adjustment added personnel costs in all departments, new positions, an increase in state retirement contributions and an increase in health insurance rates drove the personnel cost increases.
Operating costs are up $282,731 midyear, mainly driven by fuel and supply cost increases and increased vehicle costs.
Being the county’s largest department, Department of Social Services saw one of the larger operational cost increases.
The Sheriff’s Office also saw large increases, mainly in fuel and vehicle maintenance.
“But operating costs are primarily up for all departments due to the inflationary economy and the elevated fuel costs,” Wehrenberg said.
The county’s transfers to other funds is the highest increased expenditure, up 34.5 percent over last year.
That is due mainly to the transfer of money to the county’s Capital Investment Fund for capital projects and to the Economic Catalyst Fund, Wehrenberg said.
Despite an increase in expenditures, the higher revenues leave the county with a mid-year surplus of about $4.2 million.
That surplus indicates a “strong possibility” that the county will be see a fund balance, or savings, increase at the end of the fiscal year, Wehrenberg said.
At the end of the current year, the county will have slightly more than $7 million in outstanding debt, but that will increase to $26.4 million if the board moves forward with funding improvements at Person High School.
“Although this is a significant jump, the county’s debt capacity is large enough to absorb the increase without overburdening our ability to meet operational commitments,” Wehrenberg said. “The county’s current debt obligations are extremely low given the fact that very little debt has been issued over the past 10 years.”
Due to delays in taking on the school project debt, even if it were issued, the county’s debt service would decrease by $27,000 in the coming fiscal year, according to Wehrenberg. A larger increase would be seen in the 2024-25 fiscal year when a full year of the new debt is in place.
Based on the latest audit, the county’s available unassigned fund balance reserves were $21 million, Wehrenberg said – 31 percent of the county’s General Fund expenditures.
The county’s fund balance reserve policy requires any amount over 25 percent of General Fund expenditures to be transferred over to the Capital Investment Fund.
In the past two years, approximately $10.6 million has been transferred to the CIF as a result of the policy.
Wehrenberg reiterated that the mid-year surplus is a positive sign that the county will pass the 25 percent of General Fund Expenditures threshold in the fund balance and will see another boost to the CIF.
“This is an exciting process now because it does give us a way to manage those excess reserves at year end which we will badly need in the CIF to support new debt as it comes along,” Wehrenberg said.
The full meeting can be viewed at youtube.com/c/PersonCounty under the live tab.
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