Budget woes continue in Osceola County
FY 2020-21 general fund $500K short
REED CITY — The Osceola County Board of Commissioners held a public hearing on the Fiscal Year 2021 proposed budget during its recent meeting.
The proposed FY2021 budget shows a deficit of more than $500,000 in the general fund, and the board is looking for input on ways to increase revenue or reduce expenditures in the general fund.
No public comment was made during the public hearing.
Shortfalls in revenue caused by a Headlee rollback in the general operating millage from 6.403 mills to 6.399 mills and reduced revenue sharing from the state due to the COIVD-19 pandemic, continue to plague the county.
“The general fund currently has $500,000 of appropriated fund balance brought in to help balance it based on revenue that we have used, however, that still leaves a deficit of around $520,000 in the proposed budget,” Osceola County Coordinator Susan VanderPol said.
“Some of the COIVD-19 CARES grant funds will offset what we allocated in the FY2020 budget,” she added. “It is likely that we will utilize some of that, but we need to try to bring the general fund more into balance. You cannot take $1 million dollars from the fund balance, because in 2-3 years you would eliminate that fund balance.”
State law requires that the county have a balanced budget each year. In order to balance the FY 2020 budget, the board approved a transfer of funds form the fund balance of $500,000.
Without further cuts in expenditures, balancing the FY 2021 budget will require additional use of fund balance monies.
According to VanderPol, county policy requires that, at a minimum, the fund balance needs to have 10-15% of county expenditures within that fund.
The projected general fund expenditures for FY 2021 total $9 million, with total county expenditures totaling $23 million.
“Right now, the general fund either needs revenue increased or expenditures cut,” VanderPol said. “We have asked all the department heads to look at the budget and see if they can raise the revenue or what expenditures they may be able to do without. The sheriff’s department and the courts are the only two we heard back from.”
Due to previous budget shortfalls, the county has already eliminated some positions by not back-filling them when they are vacated, have reduced some positions to part-time, and have created shared positions between departments.
One proposed option for additional reduction in expenditures is to cut hourly employees by 2 1/2 hours per week. That would equate to a savings of around $71,000 annually, VanderPol said.
County clerk Karen Bluhm said that one position in the clerk’s office has already been left vacant, and reducing the other employees work hours might require refilling that position at least on a part-time basis.
“Right now, I’m hoping we can get by without filling it again next year, but if my girls lose another 2 1/2 hours per employee, I will have to fill that other position,” she said.
County Treasurer Lori Leudeman said she is working with the incoming sheriff, Mark Cool, to look at the sheriff’s department budget to see if there are some areas where considerable cuts can be made.
“He is looking at a possible $100,000 in cuts,” Leudeman said. “That includes reducing one administrative assistant.”
The treasurer’s department has reduced one of the full-time staff to part time, as well, so that position could remain as part-time, or be made full time and be shared with another department, VanderPol said.
Incoming Treasurer Tonya Hartline said she believed the office could continue with the part-time employee.
“It will obviously put more work onto each person here, but I made that recommendation looking at the upcoming budget and seeing the shortfall,” Hartline said. “I was hoping each department would look at their budget and would consider those types of options, as well. I would also like to say that if the department can not provide services, I would like to have the ability to go back to a full-time employee, but I will give it a try at part time.”
Hartline added that she would be willing to take an employee from another department and share the cost in order to reduce staff somewhere else.
“When you are looking at raising revenue or decreasing the budget by $500,000, it does require thinking outside of the box, such as sharing employees or treating a program differently,” VanderPol said. “It is a significant amount when you are looking at a $9 million budget and trying to cut half a million dollars out of it.”
“Really, the way to balance this budget is probably to reduce staff,” Hartline added.
Nehmer agreed that sharing staff was a good option, saying, “I don’t really want to cut staff any further than we have to, but we have to do what we have to do. I think there are a lot of cuts that have been brought up that could be implemented.”
Other possible ideas for budget cuts included increasing the employee Municipal Employees Retirement System contribution from 12-15% to decrease the burden on the county; reducing the cost of the MSU extension program through cutting hours or acquiring additional grant funding, or possibly asking voters to approve a MSU extension millage; using a central buyer for departmental supplies and buying in bulk to reduce costs; and looking at the county vehicle use policy.
VanderPol told the board she would work with the treasurer’s department to see what additional adjustments could be made to the budget to bring it more into balance and bring it back to the board at its meeting on Nov. 7.
“It does have to be balanced before the board can pass it,” VanderPol said. “If we can not bring a balanced budget back to you on the Nov. 3 meeting, we can have a work session that day to balance it, then it can be adopted on Nov. 17.”
Nehmer suggested they email all the departments and ask for their input.
“It can either be their decision, or it can be our decision,” Nehmer said. “We are asking for their input and if they don’t want to give it, we will assume they want us to take care of it.”
“I know this year has been extremely difficult,” Vander Pol said. “We are having to make adjustments with revenue projections, but we don’t know at this time where the COIVD-19 pandemic is going to take us. Budget revenues have been really difficult to project, so we will ask the departments to look at this and see what they can do.”
The board will take up the budget issue again at its meeting at 9:30 a.m., Nov. 3. Meetings are being conducted virtually at this time. To find out how to attend, visit Osceola-county.org or call 231-832-3261.