County trims contingency funds By Katrina Elsken Okeechobee News Reserve funds were again spotlighted in county budget hearings. Okeechobee County’s projected total reserves as of Sept. 30, 2014, will be $40,684,586. The reserves fall into four categories, and three of the four categories have spending restrictions. The projected reserves as of the close of the 2013-2014 fiscal year are: • Restricted reserves: $16,047,200; • Committed reserves: $10,693,334; • Assigned reserves: $8,555,289; and, • Unassigned reserves: $5,388,764 Use of some reserve funds are restricted by law. Restricted reserves are funds which were collected for a specific purpose and can only be used for that purpose. For example, the gas tax can only be used for road improvements. See COUNTY— Page 5 Article Continued Below See COUNTY on Page A05 COUNTY Continued From Page 1 Assigned reserves are funds that were designated for a specifi c purpose by the consensus of the county commission. The assigned reserves also include the Capital Projects fund which is used for maintenance of fixed assets, future expansion and capital improvements. These funds also include the Public Safety Fund which is used for Fire and EMS; and housing funds (housing grant funds are also restricted by the requirements of the grant). Committed reserves are funds that have been designated by administrative regulation, and their use can only be changed in the same way the designation was created. A large part of committed reserves is the Landfill Trust Fund, currently at about $6.5 million. Dropping that reserve below the fixed “fl oor” of $8 million requires a “super majority” vote of the commission. The Landfill Trust Fund originated with the money the county received from the sale of the landfi ll, It is currently below the minimum because the county commissioners voted to borrow money from that fund to pay off the debt on a building, in order to eliminate the interest being paid on that debt. The county has been repaying the money borrowed from the trust fund, and is scheduled to have it back over the $8 million minimum at the end of the 2014-2015 fiscal year. Unassigned reserves are the general fund reserves. The county tries to keep enough to cover 3 months expenses in reserve. The projected reserve in the general fund will be between 2 and 3 months of expenses. In addition to the county general operating fund reserves, some reserve money has also traditionally be kept individual department budgets. During the budget hearings on the 201415 fiscal year, the commissioners have tried to trim this from the individual budgets, asking the Constitutional Officers and the county department heads to trim any contingency funds from their individual budgets. In an emergency situation, such as a hurricane, they can request funds from the general reserves. This change in budgeting has met with some resistance. At the Thursday meeting, Clerk of Courts Sharon Roberson expressed some concern about trimming contingency funds from her department’s budget. She pointed out that she has always been fiscally responsible and turned back unspent funds to the county each year. In recent years the amount returned has been about $200,000 a year. She said sometimes the emergency need is immediate, for example when a $6,000 computer server failed, if they had not had funds immediately to purchase a replacement, the offi ce would have been unable to do business. Asking the county for a budget increase would require waiting for a county commission meeting and going before the board to request the budget increase, she said. “In a time of emergency, we would do that,” said County Commission Chairman Frank Irby. In an emergency, the Clerk’s office can’t wait two weeks for a meeting to ask for a budget amendment, the Clerk pointed out. “I could be removed from Okeechobee if I overspent by budget,” she said. “If it’s not in our budget, we cannot spend it,” County Commissioner Joey Hoover said other constitutional officers have also been asked to trim contingency fees from their individual budgets. “Paul (Sheriff Paul May) used to carry almost a million dollars,” he said. “It took a while for him to finally say ‘all right. I’m going to let y’all carry the reserves.’ He’s a constitutional officer “Otherwise what happens is I am taking $200,000 from the taxpayers and the board is also holding back reserves as well,” he said. “How much am I legitimately and responsibly and prudently taking from the taxpayers for an emergency fund that is not a budget item?” “ That’s not our money. That’s money we took from people,” Commissioner Hoover said. “My point here is, don’t carry reserves. Let’s not have a laundry list of expenditures that we don’t have a plan to spend,” said Chairman Irby. “I am sure you have some plan in the budget for things you will need to purchase. “I am assuming you have money in your budget for replacements and repairs. Some of it you may not spend, but most of it is probably a pretty accurate projection of what you will spend,” he said. “If you’re holding $200,000, we either have to raise the millage rate or we have to ask someone else to cut their budget. We don’t have that money,” Chairman Irby said. Commissioner Joey Hoover pointed out that when government takes money out of the private sector’s hand, that is money that is not circulating in the private market, “I know it has happened for years and years, every department has tried to put back a little,” he said. “Just because we did that for the past 30 years, doesn’t mean we should keep doing that. “ We are holding a lot of the taxpayers’ money,” he said. “ We need to make sure we are holding the right amount.” “ We went each of our departments come in and went through it line by line,” said Commissioner Margaret Helton. “It’s the same thing. Each department was carrying a contingency fund. That is how we reduced our budget.” The board has reviewed the operating areas of the county and provide direction to staff regarding requested reductions and staff is adjusting accordingly and reduced General Fund operating by $265,208 or 3.6 percent of BOCC General Fund Operating Budget. The Clerk agreed to go through her budget to trim contingency funding. “And if I need it, then I’ll be back,” she said. Property Appraiser Bill Sherman reduced budget by $162,572–about 12 percent of what was originally requested. He said that was the excess that had in last year’s budget. “But I also want to remind you that when I got to trial and that trial costs me $200,000, I am going to lay that bill on your desk,” he said. “A couple years ago we overspent our budget by $31,000 in legal defense,” he cautioned. After this adjustment, the Property Appraiser’s office budget is $1,162,000. Commissioner Bryant Culpepper asked why the county keeps such a large amount in the Landfi ll Trust Fund. He said he was told this is kept in case of a catastrophic event at the landfill. He questioned why the county needs this reserve since Waste Management has a bond that would take care of these expenses should something happen at the landfi ll. Jim Threewits, deputy county administrator, said there is no way to know how much expense the county would have should there be such a catastrophe. He added that in such a disaster, the county would have immediate expenses which may or may not be reimbursed. “I think it is the timing of that mechanism and you don’t know the whole cost,” agreed Mrs. Chartier. Mr, Threewits compared it to the immediate expenses the county has during a hurricane that may or may not be reimbursed by FEMA. “ The goal was to always be prepared, if you are dealing with a regional landfi ll,” he said. “ You need to have money in case something tomorrow goes sour.”
Posted on: Fri, 15 Aug 2014 14:00:22 +0000
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