The Board of County Commissioners has completed a Draft Recommended Fiscal Year 2015 Operating and Capital Budget. This was without a doubt the most difficult budget review and approval cycle that we have been faced with. Fortunately, our financial policy and past budget practices have positioned the County to maintain the high quality of public services that our residents, taxpayers, and visitors expect. We are not obligated and encumbered with debt service obligations which would only lessen our ability to direct available funds to current operating costs. All County Government department, office, and component unit budgets were reviewed in detail and the Board, Department of Financial Services Director Scott Weeks, and I directed our focus on circumventing a structural deficit for not only this budget period but in impending fiscal years.
The summary of the Budget is as follows:
- The Recommended Fiscal Year 2015 Budget is $71,881,778. The Requested Budget was $79,964,688. I will explain how this $8 million + difference was adjusted and the Budget was balanced.
- The budget shows a reduction in assessed revenue of $3.8 million in primary tax accounts to include Real Property Tax revenue, Personal Property and Utilities Tax, Income Tax Revenue, Recordation Tax for Fiscal Year 2015. We are projecting an increase in Local Transfer Tax, Hotel Rental Tax, Highway User Tax, and Admissions and Amusement Tax with the net difference in total loss revenue estimated to be $5.6 million not including transfer of reserves. The Hotel Rental Tax is restricted for Economic Development and Tourism.
- The Garrett County Employee Health Care Coalition that was created in 2006 has proven to be a judicious decision and 3 years ago the Coalition, comprised of the County, the Board of Education, and Garrett College amended the Plan to a Self-Insured Plan. A result of this prudent decision is that the plan assets accrued to a level that for Fiscal Year 2015 will allow the Plan to direct escrowed funds to offset the cost of employee health care and reduce the cost in the operating budget of the 3 entities.
- Prior action by the Board of County Commissioners obligated and committed additional funding for Fiscal Year 2015 to the Garrett County Board of Education that will maintain an operating funding level equal to that of Fiscal Year 2014. The Garrett County Public School System presented financial and budgetary information to the Board of County Commissioners in November of 2013 that the System was faced with a $2.2 million projected deficit for Fiscal Year 2015. This included a loss of State funds primarily due to the decline in student enrollment. At that time the Board of Education had initiated the required process to consider closing 3 elementary schools. The Board of County Commissioners then committed to a funding appropriation that would assure that the $2.2 million deficit would be eliminated. This commitment by the County would prohibit the closing of these schools. The deficit would be funded by directing a percentage of the Board of Education’s escrowed funds in the Coalition Health Care Trust ($1,000,000), additional County funding ($500,000), potential State of Maryland Funding ($500,000), and a reduction of current operating costs ($200,000). Fiscal Year 2015 Budget will confirm an increase in operating funds to the Board of Education of $535,897 which is a result of actual State funding of $464,103. The County had agreed that if the additional State funding was less that the projected total the County would be responsible for the difference. (Net difference of $1,000.000). The County was also required to fund $235,544 in additional teacher pension cost for Fiscal Year 2015.
- Certain County Government departments operating budgets for Fiscal Year 2015 will be less than 2014 due to the recent department reorganizations that reduced the overall cost by approximately $180,000. Certain position vacancies were not replaced and staff were reassigned which has shown in the short term to be good judgment and will prove in the long term that we continue to operate more efficiently with less staff. This is attributable to our many dedicated and talented employees. We will continue to look at all positions and personnel assigned to these positions.
- The only Small Equipment/Projects that were recommended for approval are those that have already been committed to which include the Last Mile Network Broadband Phase II for $500,000 which includes an grants funds of $250,000 and a County match of $250,000 and the HART Animal Center which also has $250,000 in grant funds and a County match of $150,000.
- The Budget will show no recommended Capital Outlay for Fiscal Year 2015.
- The Board of County Commissioners have taken a position to not provide funding for all capital outlay and small equipment/projects for this budget period.
- To balance the Fiscal Year 2015 Budget funds will be reassigned and transferred from the County’s Unreserved/Unassigned Fund Balance. The total of this transfer is $1,118,736. It has not been the financial practice of County Government to use and direct reserve funds for operating costs but the alternative would be to increase the real property tax rate. This was not an option for the Board for this budget period.
I would ask that you reference the Budget on-line at the County website http://garrettcounty.org/resources/commissioners/pdf/Budgets/budget15/FY15-Recommended-Budget.pdf and direct any questions to Scott or me. We would be available to discuss the funding appropriation for your respective department or further explain the comprehensive budget. After that point time if there are further questions on the original/recommended budget appropriation, time will be scheduled with the Board of County Commissioners.