San Juan County Auditor Milene Henley delivered the news in a 10:30 a.m. report to the Council this morning: Revenues are down, expenses are up and cash on hand is at its lowest point in three years, $1 million less than it was in 2008.
In her status report based on the County’s financial activity in the first quarter, Henley told the Council that, while the County’s primary sources of revenue – property and sales taxes – appear to be on track with projections now, other revenues are down significantly.
Among her projections: receipts from planning and permitting will fall $340,000 short of the amount budgeted and income from interest on deposits will fall by 70 percent. Overall, she expects the revenues that fund current expenses to drop by about $2.5 million dollars, that’s 18 percent below the County’s $14.1 million Current Expense budget.
On the expense side, department budgets were tightened to eliminate almost all reserves in 2009 and some costs – such as law enforcement and personnel costs – are running above expectations. Spending controls will be needed to offset a trend that she projects could otherwise amount to as much as an extra $500,000 by the end of the year.
Projecting ahead to the 2010 budget, Henley said that without cutbacks, the County would have no working cash by the end of that year.
She recommended that the Council consider finding $1 million in cost reductions for the balance of the 2009 budget year.
The cuts will not come easily as payroll costs account for 72% of the County’s general fund budget.
Cutbacks that went into effect with the current budget reduced the County’s workforce and directly affected 46 employees through personnel reassignments, reductions in hours or having positions combined or eliminated. Two additional employees were laid off in March.
County Administrator Pete Rose called the Auditor’s report sobering. “We will need to look seriously at the core functions of County government that are funded by general revenue, and we may find ourselves in the position of asking not ‘What is important?’ but ‘what is legally required?’ We are going to have to decide what we aren’t going to do.”
The County is limited to increasing its income from taxes on existing property by more than 1% per year without a vote of the people. County Council members mentioned the possibility of conducting a “levy lid-lift” election in discussions after the adoption of the 2009 budget, but there has been no concrete action in that direction.
A copy of the slides the Auditor used in her presentation is available online at:
http://sanjuanco.com/docs/news/1Q09_Financial_Rpt.pdf
