Lauer: Establishing budget was an orchestrated effort

Few things are as difficult as developing a county budget, especially with diminishing revenues, but that’s what Lincoln County Clerk and Recorder Tammy Lauer has been dealing with the last six weeks.

As the county commissioners considered ways to trim spending, Lauer followed their cues and helped them craft a balanced budget of $15.4 million for the 2013-2014 fiscal year, roughly $2.7 million less than the county’s budget for the 2012-2013 fiscal year that ended June 30. The cuts were necessary due to the loss of several million dollars from the federal government that the county had received in years past. 

This year, government entities within the county will have to do without the $4 million annual appropriation from the federal Secure Rural Schools Program. Last year, about $2.7 million of that money went directly to the county, and another $1.3 million was split among the three school districts in the county to pay for employee retirement and school-related transportation.

In the case of the school districts, local property taxes will go up automatically to replace a portion of the federal funding. The county, however, has been able to avoid any tax increases so far. 

To make matters even more difficult, the county will receive about $100,000 this year from interest payments on previous investments, compared to past years in which the county had expected to raise $1 million or more from interest on investments.

As traditional funding sources dry up, Lauer said county leaders are considering ways to increase revenue. Commissioner Mike Cole of Eureka has been tasked to research new revenue sources for the county, Lauer said Thursday.  

“Commissioners are looking at ways to generate more revenue,” Lauer said. “I think it’s something they have to.”

Lauer said she worked on the budget for about five weeks or about 250 hours, coming in during the quiet evenings and on Saturdays, making sure incoming revenue and cash reserves would cover the necessary expenses for the rest of this fiscal year.

Lauer cautioned that the budget requires more scrutiny than just a cursory look or just reviewing the appropriated dollar amounts. She said reserve dollar amounts also must be reviewed.

“You can’t just compare the appropriations for last year’s and this year,” Lauer said. “With just the (appropriations) number, it doesn’t tell the whole story.”

After public hearings in late August in Eureka and Libby, commissioners approved a budget that will require the county to spend more than $2.5 million from its reserve funds to pay for all of the anticipated expenses for the year. 

Lauer said Lincoln County, with overall cash reserves of $15.55 million, is better off than many counties. But the burn rate has increased rapidly in recent years as the county has struggled financially, and the reserves eventually will get wiped out unless additional revenue sources are available or the county reduces spending substantially.

“(County Administrator Bischoff) Bill estimates we have about three years of reserve before things get really bad,” Lauer said. “A big reason for that reserve is Commissioners (Marianne) Roose, (Rita) Windom and (John) Konzen. When we were getting all that Secure Rural Schools funding years ago, they wanted to put much of it away for a rainy day. Other counties at the time were going out and buying brand-new equipment, new trucks and such. We didn’t do that. Lincoln County socked some of that money away. Well, those rainy days are here now. We’re better off than 75 percent of counties because of them.”

Lauer said county department heads recognized the need to reduce expenses and were willing to make sacrifices this year. Aside from reductions in federal appropriations, the county cut discretionary spending by about $600,000. The road fund took the deepest cut of about $300,000, while public safety funding was reduced by $208,000.

Lauer explained some funds for the 2013-14 fiscal year showed less appropriations than the previous year, but while less money was appropriated, expenses in those funds diminished. Lauer said one such account was the Ambulance Fund — more than $36,000 less — because the expenses decreased. 

“Every department has been great about cutting expenses,” Lauer said. “As far as cuts go, these were the easiest, if you can say any cuts are easy. Many departments voluntarily made cuts. The more difficult cuts will come in the coming years.”

Then Lauer explained why some funds have less money appropriated in the current budget.

“The reason the Ambulance Fund is less is because Troy is buying a new ambulance. This year, it’s their turn,” Lauer said. “It will take a year to build that fund back up.”

Lauer said the same can be said about the Airport Fund.

“They just don’t have the expenses that they did,” she said.

Commissioners indicated they are reluctant to lay off county employees, but instead prefer staff reductions through attrition. However, they have indicated there could be staff reductions in the future, most notably the county superintendent of schools position. They have also discussed the possibility of eliminating one of the two justice of the peace positions. Right now, there is one justice of the peace in Libby and another in Eureka.

Presiding Commissioner Tony Berget praised the efforts of Lauer and all department heads for their diligence in voluntarily trimming their budgets for the greater county good.

“Everyone has done a great job in getting to this point,” Berget said as the budget was approved.