I’m embarrassed to see that I haven’t made a blog post since August 12 — unfortunately there just hasn’t been enough time in the day. However, that doesn’t mean that nothing has been happening in Monroe County Government; in fact, just the opposite! On Tuesday night, the Monroe County Council completed its annual budget hearings for 2015, which took up a good portion of the month of September. Budget hearings are a required annual process in which each county department presents its budget request for the upcoming year, and the county council votes to approve it or make changes.
During budget hearings, the County Council appropriated over $62M for county government functions across 47 funds.
All in all, this was, in my view, a particularly successful budget hearing. The most significant and substantive accomplishments were:
The Council passed a balanced budget. For the first time in a number of years, the Council passed a budget in which planned expenditures for the primary operating expenses (in the General Fund and the County Option Income Tax Fund) are less than planned revenues. I’ll discuss more about the concept of a balanced budget in a future post.
County employees (other than those whose salaries are mandated by state law) will receive a 2.8% cost of living increase. 2.8% represents two years of increase in the actual cost of living (as measured by changes in the Midwest Consumer Price Index from the previous December to December). This is the standard methodology that has been used by the Council in recent years. County employees did not receive any cost of living increase in 2014.
The Human Resources department was increased from one full-time employee to two (moving a half-time position to full-time). Many councilors, including myself, indicated early in budget hearings that this increase was our number one priority if the resources were available. The county has over 525 full-time employees, and over 700 employees including part-time, and 1 full-time HR professional is well below the level needed to properly serve an organization of this size. With the increased resources, the HR department has plans to enhance employee training, increase desk audits, and introduce performance management techniques, along with other initiatives.
Two employees in the Recorder’s Office were moved from the Recorder’s Perpetuation Fund to the General Fund. The Recorder’s Perpetuation Fund is funded by certain fees on recorded mortgages and deeds, along with copies made of these documents, and is statutorily earmarked specifically for the preservation of records and the improvement of record keeping systems and equipment in the Recorder’s Office (in fact, the council doesn’t even appropriate the fund; it is entirely under the control of the Recorder). However, whenever balances in the Recorder’s Perpetuation Fund grow large, county councils are always temped to try to use the Recorder’s Perpetuation Fund to support the general operations of the Recorder’s Office, despite the murky legality of such arrangements. Back in 2008, when the Monroe County Recorder’s Perpetuation Fund’s balance was over half a million $, the Recorder worked with the County Council to move the entire salary of 1 employee, half the salaries of 2 employees, and three quarters of the salaries of 2 employees out of the General Fund into the Recorder’s Perpetuation Fund. This was enormously helpful to the County Council in funding county government through some difficult times; however, by 2013, the balance of the Recorder’s Perpetuation Fund had almost entirely been spent down.In an attempt to stabilize the fund, for the 2014 budget, the Council rearranged the funding of the Recorder’s Office staff, paying for 3 employees out of the Recorder’s Perpetuation Fund and 3 employees out of the General Fund. Unfortunately, due to diminishing revenues from recorded documents, this restructuring wasn’t adequate, and the Recorder’s Perpetuation Fund is now in a position where it can mostly likely not even meet payroll for 2014.In addition, some new legislation in 2014 clarified the use of the Recorder’s Perpetuation Fund for general operations, stating that the fund could be used to fund salaries and other general operational expenses, but only if the Recorder attested each year that the records perpetuation efforts and technology of the department were fully funded. For these reasons, the Council moved two of the three positions funded out of the Perpetuation Fund into the General Fund, leaving only one position in the Perpetuation Fund — the Microfilm Deputy, whose work is clearly related to the purpose of the Perpetuation Fund. Although this may seem somewhat “inside baseball”, this move was a huge step in ensuring the sustainability of the Perpetuation Fund, and weaning the Council off of the use of the very limited Perpetuation Fund to subsidize basic county government operations.
Two employees were moved from the Prosecutor’s Pretrial Diversion Program fund into the General Fund. This situation is very similar to that of the Recorder’s Perpetuation Fund, which which a fee-driven fund (Pretrial Diversion) was used to subsidize basic county government operations that should have been paid for out of County General. In the case of Pretrial Diversion, though, the situation was much more adversarial than with the Recorder’s Office. For a number of years, the Prosecutor’s Office would deposit excess revenues from Pretrial Diversion into the General Fund — in essence, the Pretrial Diversion Program was subsidizing the General Fund.The last year this occurred was 2006, in which $170K was transferred from Pretrial Diversion to the General Fund. During the last year of the Carl Salzmann administration, 2007, this practice was discontinued, and no funds were transferred to the General Fund. In apparent retaliation, in 2008 the County Council transferred $170K of salaries for Prosecutor’s Office employees (legal secretaries and paralegals) from the General Fund into the Pretrial Diversion Program fund.As with the Recorder’s Perpetuation Fund, over the years, the revenue and cost curves went in the opposite direction — pretrial diversion revenue declined overall (though not every year), while personnel costs (salary and benefits) naturally increased, leading to an unsustainable situation. Again, as with the Recorder situation, the Pretrial Diversion Program fund expended all of its reserves, to the point where it faced a negative balance by the end of 2014. Again, the Council started to address the situation in 2013, moving one of the salaries back into the General Fund for 2014. However, again this wasn’t enough, and the Council had to move the two remaining general prosecutorial positions (i.e., positions not there to support the Pretrial Diversion Program) into the General Fund several months ago in 2014.
The 2015 budget included all of the basic prosecutorial positions in the General Fund that had been moved into the Pretrial Diversion Fund by the Council in 2008 — thereby finally ending the unsustainable subsidy of the Prosecutor’s Office by the Pretrial Diversion Program fund. Incidentally, this is not only an important accomplishment because it ensures the sustainability of the Pretrial Diversion Program; more importantly, it ends a practice that could be perceived as a conflict of interest — i.e., the Prosecutor formerly could be perceived as having an incentive to ramp up the Pretrial Diversion Program in order to fund basic operations.
I’m very proud of all of my colleagues on the County Council and in other county departments this year for what they accomplished — a balanced budget, a cost of living raise of county employees, increased organizational capacity, and weaning the county off of unsustainable fee funds.
Of course, there is still some unfinished business. This year we raised the Juvenile County Option Income (Juvenile COIT) Tax from 0.05% to 0.095%. The 2015 budget moved some youth-related expenses from the General Fund into the Juvenile COIT fund; however, the Youth Services Bureau had a proposal to add two new positions and reclassify several others in order to provide more outreach and build organizational capacity. This proposal was removed from the 2015 budget proposal, however, and will be considered in the future by the County Council on its own. The Treasurer’s Office also requested 1-2 additional staff in order to address claimed chronic understaffing in the office. The Council ultimately declined to add additional positions during budget hearings, but agreed that they needed to address the staffing levels in the future. Finally, the planned revenue for 2015 also included around $250K in an appeal for a one-time excess levy in order to correct several past errors. The Council still needs to complete this appeal — and there is no guarantee we will receive all of what we are requesting.
The next step in the budget process is for the Council to formally adopt the proposed budget, as well as set the tax rates and levies that will be used to fund the property tax portion of these budgets. Budget adoption hearings will be held on Tuesday, 2014-10-14 and Wednesday, 2014-10-15, at 5:30PM each evening.