Budget Passes Committee Unscathed – $.13 Cent Property Tax Increase

The Jefferson County Budget Committee met on Tuesday, June 25, 2013 in the Historic Jefferson County High School.  The Meeting was Called to Order by Committee Chairman Griffith. Committee Member Blevins was absent from Roll Call.

End of fiscal year 2012-2013 budget amendments were presented for approval. Amendments from the County General Fund that had a fund balance impact of $184,841 was Approved with a Motion from Committee Member Dockery and 2^nd from Committee Member Carmichael. Other Amendments on both the County and School System side were general end of the year housekeeping and had no fund balance impact. All requested amendments were Approved by the Committee.

The Committee discussed the second review of the County and School System budgets, including Current Projects, Assumptions, the Debt Service Fund, Capitol Projects Fund, School Budget, County Departments and Non Profits.

Jefferson County Finance Director Helton informed the Committee that the County side of the budget showed a deficit of $2, 292, 276.  Total County Debt is around $86 million dollars ($130 million including interest) and the Debt Service Fund Balance is in the neighborhood of $10 million dollars. Helton stated that he anticipates rolling around $500,000 into fund balance this fiscal year and that some of the pennies assigned to the debt fund (currently 25 cents on the property tax rate) could be reassigned to help balance the 2013-2014 budget. Helton also stated that the County General Fund Balance is currently $4,695,415 and that another $1 million dollars is anticipated to roll into fund balance this fiscal year. The County must keep a minimum of $3 million dollars in the County General Fund, which would allow room to use a portion of the fund to balance the 2013-2014 budget, according to Helton. He said that there are small County notes that could be paid off with some of the Debt Service Fund. Money accumulated in the Debt Service Fund (currently $10 million) can only be used to pay off debt, though pennies can be reassigned for the next budget year.

Director of Jefferson County Schools, Dr. Charles Edmonds, addressed the Committee regarding the School System Budget Proposal. Edmonds requested that the Committee reconsider their request for nearly $1.5 million in cuts to the Department of Education budget, stating that there were no avenues for cuts of that magnitude. The Department of Education budget proposal was resubmitted with the original deficit of $2,997,507 plus a request for $750,000 to meet the obligation of the County Commission to cover operational costs for Mt Horeb and the new Patriot Academy. The obligation was made in November of 2010 and provided funding in the amount of $500,000 for operational costs for the schools ($750,000 includes Mt. Horeb for 2012-2013 and both schools for 2013-2014). Director Edmonds stated that he would like to see the Commission and the School Board enter into a relationship of trust. Committee Member Akard made a Motion to Approve the School Budget and was 2^nd by Committee Member Beeler. The Motion Passed with Committee Members Dockery, Carmichael and Maples voting No.

Committee Members discussed options to balance deficit for the 2013-2014 budget, which totaled $5.2 million dollars. Because the worth of one tax penny is $116,500 the Committee needed to find a total of 45 pennies to balance the budget for the fiscal year 2013-2014. The Committee decided to subtract pennies from the 45 cents needed to balance the budget by identifying major new expenses and their funding avenue. Committee Member Mills made a Motion to raise the property tax rate by 7 cents, with 5 cents going to the school system general fund for new schools operational costs and 2 cents going to fund County wide SROs. 2^nd Dockery-Passed 7-1

Mills made a Motion to designate up to $1 million dollars from School Fund Balance (currently at $3.8 million and with a $1.5 million mandated reserve) to balance the school system budget. 2^nd Akard and Passed

Mills made a Motion to move $750,000 from the hospital reserve account to the County General Fund (to be available to balance the budget on the County side). 2^nd Carmichael and Passed

Mills made a Motion to use $275,000 from the Debt Service Fund (only available to pay of existing debt) to pay off the balance on the E-911 loan (which would result in a $500,000 rebate to the County). 2^nd Maples and Passed

Mills made a Motion to leave $500,000 in rebate (from previous motion) funds in the County General Fund to be available to use in balancing the budget on the County side. 2^nd Carmichael and Passed.

Mills made a Motion to move 6 pennies (worth $699,000) currently going into the Debt Service Fund to the School System General Fund to help balance the budget on the school system side. 2^nd Carmichael and Passed with Dockery and Maples voting No.

Mills made a Motion to balance the remaining side of the County budget with the use of County Fund Balance. 2^nd Carmichael and Passed.

Mills made a Motion to add 6 pennies to the property tax rate ($699,000) to balance the school system side of the budget, with any small remaining amounts not covered by the afore stated funding avenues to come from the school system fund balance. 2^nd Dockery with Griffith and Maples voting No.

Carmichael made a Motion to increase the property tax rate by 13 cents to balance the budget and to accept and complete the fiscal year 2013-2014 fiscal year budget. 2^nd Mills and Passed 5-3 with Beeler, Akard and Maples voting No.

In recap, the Committee balanced a $5.2 million dollar deficit (45 pennies) with a combination of a 13 cent tax increase, $750,000 from the hospital reserve fund, $500,000 rebate for paying off E-911, moving 6 pennies from the debt service fund, County general fund balance and school system fund balance. The fiscal year 2013-2014 budget will move to the Full Commission for review and approval.