A first draft of the 2018 Douglas County budget presented at a two-day budget retreat indicated a shortfall in revenue by as much as $11.9 million in order to meet budgetary expenditures in the coming fiscal year, which begins Jan. 1, 2018.

The Douglas County Board of Commissioners spent Tuesday and Wednesday in the Development Authority of Douglas County's boardroom pouring over a proposed 2018 fiscal year budget that, due to a number of variables, is expected to bring in less revenue required to meet the coming year’s budgetary needs, according to County Finance Director Jennifer Hallman.

Within the 2018 proposed general fund, prior to any budget improvement requests (BIRs) made by Douglas County’s constitutional officers and department heads, proposed expenditures were listed at $85.8 million. However, projected revenues are only expected to come in at $77.3 million, which leaves an $8.5 million shortfall in revenue to balance the projected budget.

Even with a limited number of budget items recommended, the county is looking at a possible $93.7 million budget for next year, compared with an adopted $83.3 million budget in 2017.

The question remains as to whether the county will need a property tax increase in order to balance the 2018 budget.

District 4 Commissioner Ann Jones Guider said, “I warned about the direction we were headed with the 2017 budget because we had to transfer $8.5 million in funds from other accounts to balance it. If someone maxes out their credit cards and funds, they don't go out and buy a new car hoping ‘something will come up’."

“That is why I say we certainly cannot take on any more debt — or projects— for now,” Guider said. “We must make cuts that have the least adverse affect on the citizens and we must continue to look for cost-saving ways going forward. I stated last year, I would fight against any tax increase. We got ourselves into this mess; we have to find a way to dig ourselves out.”

There are a number of reasons that some of the county's revenues are trending downward, Hallman said.

She said the county revenues fell due to a reduction in funds from vehicle taxes, and decreases in the Local Option Sales Tax (LOST), Clerk of Superior and State Court fines, the jail surcharge and Rideshare fees.

She said Rideshare fees based on FY2017 indicate trends have declined by $69,000, possibly due to gas prices. Hallman pointed out that a 2017 fund balance of almost $5 million was used to balance this year’s budget.

“In the past, we had Google dollars and the one-time jail property reimbursement which did not have as much of an impact to the bottom line,” she said.

She said that while more expenditures were stable and remained at 2017 budget adopted levels, two expenditures increased. Group insurance, based on trends and data from MSI Benefits Consultants indicated an increase for 2018 for over $1.2 million. Retirement benefits have also climbed by an additional $2 million.

In 2016, voters approved a six-year Special Purpose Local Option Sales tax (SPLOST), which is taking care of big ticket items,” said District 2 Commissioner Kelly Robinson.

County Administrator Mark Teal said there are no huge items in the proposed 2018 budget.

“The major items that were asked for aren’t in there,” he said. “We couldn’t afford it.”

Salaries and benefits for county employees make up 58 percent, or $54 million, of the 2018 proposed budget. Operating costs are 31 percent, or $29.2 million, of the budget makeup. Capital expenditures and BIRs account for 11 percent, or $10.4 million of the budget.

During Wednesday’s session, the board received a report from Nancy Berkley with Evergreen Solutions regarding a recent Classification and Compensation Study authorized by the BOC.

In the study, Berkley said the consultants looked at the results of the study to develop a new pay plan which offers more parity and individually assigned pay grades to classifications.

Currently, the county is operating under multiple step plans with 30 steps each.

Proposed are two pay plans, one for non-public safety employees and one specifically for public safety, which wants to retain the same number of pay grades and 30 steps per grade.

 

To implement the compensation study, to bring employees up to the new minimum would cost $339,213 and would impact 153 employees. To move to the market tier 3 points with a 2.5 percent minimum adjustment would cost $1.143 million and apply to 570 employees.

To upgrade public safety employees would cost the county $609,701, with 487 employees receiving a salary adjustment.

District 2 Commissioner Kelly Robinson said in regards to the 2018 proposed budget, “I went into this cycle with priorities for District 2 being economic development and transportation with a tie for third priority between health and welfare and public safety”.

He said, “The public passed a SPLOST in 2016 which had transportation/economic development receiving 51 percent of dollars collected. Mental health is the key priority as we recalibrate policy along priorities which tie into alternative sentencing which lowers public safety costs. My constituents stated ‘continue on’.”

Based upon this week’s discussion, the staff is expected to prepare a revised proposed budget following this week’s retreat.

As this is a preliminary budget, the commissioners will still have to roll up their sleeves toward the goal of putting together a balanced budget in time for the first public budget hearings on Dec. 5.

The BOC is expected to adopt a 2018 budget on Dec. 19, its last scheduled meeting of the year.

The BOC also heard a presentation Tuesday regarding the Douglas County Defined Benefit Plan, administered by the Association County Commissioners of Georgia (ACCG) and GEBCorp.

At issue is a 2017 budget shortfall in county contributions at $2.5 million, due to required changes in the mortality table and an assumed investment return, said Hallman.

“With respect to our plan, salary increases have been greater than anticipated over the past two years and more participants than anticipated are taking advantage of unreduced early retirement provision,” she said.

Douglas County’s funding ratio is 76.9 percent; according to ACCG policy, if the funding ratio is below 80 percent, them the county must contribute the recommended amount, Hallman said. She told the commissioners that the 2018 budget had already been adjusted to include the $6.1 million contribution.

She said that during 2008, 2009 and 2010 the county used credit to get through the recession and they funded the program higher than the required amount.

“We have exceeded what was required each year, but the funding ratio changed in 2016 and 2017. It has gone from 8.4 percent to 14.6 percent since 2008,” Hallman said. “Early retirement is impacting the budget.”

She said that in 2019, there will be a change to the mortality table for government plans in 2019.

“According to the mortality plans, government employees live longer,” Hallman said.

Douglas County’s employees contribute 5 percent to the fund.

“As Douglas County continues to grow, I feel very optimistic about the 2018 Proposed budget, particularly as the SPLOST will absorb capital expenditures which is normally supported by the General Fund,” said Douglas County Commission Chairman Romona Jackson Jones. “

“Therefore, my main priority in this budget is addressing the proposed market study that has the potential to bring all public safety and non-public safety personnel salaries up to parity with the market. Furthermore, in light of increased employee pensions, healthcare and workers compensation cost, I wish I could do more. Nevertheless, the 2018 budget will be a relativity flat spend based on what the new administration has inherited.”

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