Four employees have been laid off at the county Community Development and Planning Department since the beginning of the year.
And it would appear that’s just the beginning, as county officials prepare this week to cut $1 million or more out of the 2009 budget in order to keep pace with a sluggish economy.
In a sobering presentation to the County Council, Auditor Milene Henley last week said that a slowdown in local construction could cost the county as much as $400,000 in lost revenue — by itself — by the end of the year. Though sales tax and property tax revenues remain on track with projections, Henely said the down swing in construction and significant drops in other revenue sources, such as revenue generated buy licenses and permits, fines and forfeitures, charges for good and services, and interest on investments, will likely add up to at least $1 million less in revenue than anticipated when the budget was adopted in December.
“We’re seeing an economy in which people are doing less, spending less, putting off and that affects every aspect of our lives,” she said.
Administrator Pete Rose said when revenue has been lean the county has been able to avoid cutting jobs and programs in the past by relying on its Road Fund and “cash reserves” to supplement its general fund, which pays the bulk of day-to-day expenses, like payroll. About 72 percent of the general fund is used to cover payroll costs, he added.
“That has left us not well positioned for an upset in revenue like we’re seeing right now,” Rose said. “Our short-term problem is revenue, but our long-term problem is structural.”
While expenses need to be reduced immediately, Rose cautioned the council to keep the future in mind as well. He presented a list of potential cuts which affect nearly every county department and account, including roughly $96,000 out of the Sheriff’s department, $56,000 from the prosecuting attorney and $67,000 from public health.
“We need to see if there are ways we can combine and flatten the organization, and we will have to weigh the value versus costs of having service centers on three islands,” he said.
The county entered the year with an overall budget of $51 million, of which the general fund comprises $13.9 million, or roughly $200,000 less in general-fund spending than in 2008. The budget the council approved in December anticipated a drop of about $200,000 in sales tax receipts compared to the $3.2 million generated the year before.
Rose said the general fund is not the only arena affected by the economic slowdown. The budgets of the Land Bank, which relies mostly on real estate sales for its revenue, and the solid-waste fund, which is funded almost exclusively be tipping fees, will need to be revised in the next several weeks.
Henley offered up six different options for cutting costs, the most drastic of which would eliminate support for senior programs entirely or divert more money from the roads. The council was expected on Monday to be briefed by managers regarding how their department would be affected by the pending cuts.
