Anthony Ahrens, of the citizens budget advisory committee, addresses members of the community during a presentation of the county's 2018 budget on Monday night in the courthouse. Committee members Mitch Townsend and Bill Marshall are also pictured.
After more than 45 budget meetings and discussions, Lewis County staff presented the 2018 budget, which relies on $1,346,129 in reserves for the general fund, to a record number of community members on Monday night.
That amount brings the budgeted use of reserves in all other funds, including the general fund, to $6,143,629.
County staff walked the community members through the budget process, challenges, fund types and expected revenues and expenditures for the 2018 year.
In the general fund, there was a $244,044 change in revenue from the preliminary budget after previous decisions that included a $800,000 shift from the roads fund, the decentralization of the fiscal office and an increase to grants for the sheriff’s office and the jail.
Expenditures changed by $300,159 from the preliminary budget due to cost of living adjustments, an increase in medical costs and a contribution for the senior center nutrition programs, among other items.
Revenues in other funds changed by $1,225,500 from the preliminary budget, while expenditures increased by $2,757,393.
The numbers presented are still not final, Becky Butler, with the county’s budget office, said. The budget does not include a $39,600 reduction to the Washington State University Extension office, and the county is still waiting for the final tax levy calculations from the assessor’s office.
“The budget is a fluid document,” Butler said. “We amend it about four times a year as things come up… but we have to adopt one by Dec. 4.”
Members of the citizens budget advisory committee appointed by the county commissioners provided their insight into the process, stating the county, like many others, is in a budget crisis.
“I had my eyes totally wide open after listening to all the different departments present,” Bill Marshall, with the committee, said. “People say, ‘Well golly, there is some places you have got to cut’… But where do you cut? There is nothing left to cut.”
Marshall stated the few areas that could be cut would result in fewer services to citizens.
With the majority of costs going toward salaries and benefits, it makes reductions difficult, staff said.
“It’s going to come down to staff levels,” she said. “We are already at bare bones as the citizens group said.”
Commissioners did approve at last five increase requests for the 2018 year. Unfunded and underfunded mandates such as paying for the legal counsel of defendants who can’t afford their own and the cost of jail medical services have made it difficult for the county because the services are required, but little to no funding is provided by the state or federal governments to carry out the requirements, staff and commissioners said.
Increased costs to medical insurance and state retirement have also put a pinch on the purse strings. Earlier this year, the county faced an estimated 68 percent increase in medical costs, which caused a switch to a new insurance provider. That came with an increased cost to staff and the county, but it was better than the alternative, county staff said.
The ability to generate funds through timber sales has also decreased, Commissioner Gary Stamper said. This year, the about $1 million the county would receive in secure rural schools funding has not yet been reauthorized.
“We are a timber county and that’s just one of the things we are dealing with,” Stamper said.
Although the county will balance the budget using the estimated $1.3 million in reserves, at the end of 2018, that number will likely go down.
The 2017 budget was adopted with the use of $1.9 million in reserves and the initial projection for year end numbers landed at $628,000. The number has not yet been finalized with the last budget amendment of the year expected soon.
In 2016, $843,000 in reserves were used to balance the budget, but around $3.1 million was originally budgeted.
Typically there is between $900,000 and $1 million of a rollback due to vacant positions in the county.
“I don’t anticipate it being as high for 2018 because we reduced the budget so significantly,” Butler said.
She added that if something doesn’t change, there will be significant reductions possible for the 2019 budget.
The Government Finance Officers Association recommends that governments, regardless of size, maintain a fund balance of at least two months of operating expenditures. For Lewis County, that amounts to around $5 million.
“We are still higher than we need to be, but we have to keep that level,” Butler said.
The 2018 projection for fund balance is at $7,556,373.
In 2011, there was $11,786,942 in reserves.
“Expenditures may need to be decreased by an estimated 1 percent to 2 percent in 2019, unless there are significant increases in economic development, sales tax revenue or a change in state shared revenues to offset mandated program costs,” states the budget presentation. “The county will need to reduce cost to maintain an appropriate level of reserves.”
Commissioner Edna Fund spoke to the Local Government Committee of the Washington House of Representatives in Olympia on Friday to relay concerns about the unfunded mandates. The committee will look to study the issue, which could later relieve some of those financial obligations.
