County mulls revenue, cost-cutting for 2014-15 budget gap
Goodhue County staff met for a budget workshop Tuesday to discuss options for a nearly $500,000 gap for the next two years.
County Administrator Scott Arneson said the proposed 2014 and 2015 budgets are generally well crafted, and that minor changes to line items like requiring Public Works vehicles to go longer without replacement would not be enough to address the shortfall.
"We have to figure out some revenue sources or cut expenses," Commissioner JIm Bryant said. "That's budget 101 right there."
He suggested the county management team assist County Board to restructure departments.
"We can't keep operating like this," Bryant said. "We have to look at something different."
A number of possible revenue sources were discussed, including state sales tax exemptions and a wheelage tax approved by the Legislature this year.
The exemption waves the sales tax for purchases of both tangible property and services.
County staff estimated it would save at least $56,000 in the 2014 general fund budget, but the actual number could be double that amount.
Finance Director Carolyn Holmsten said the county should know more about the exact figure sometime in September.
A wheelage tax approved July 26 by County Board also could be used to pay down highway construction bonding projects, which will be greater than usual next year. The estimated revenue from the $10-per-vehicle tax is around $450,000 in 2014.
Revenue from the wheelage tax was not included in the proposed budgets because County Board has yet to decide how to allocate the funds, according to an administrator's report.
Further uncertainty surrounding the implementation of Obamacare also could impact the budgets, which were calculated with the assumptions of a 6 percent increase for health care costs in 2014 and 10 percent in 2015.
Commissioner Dan Rechtzigel asked if the county should be prepared for Health and Human Services to add staff to help the transition to Obamacare.
HHS Director Nina Arneson said two positions would be added to the Income Maintenance/Welfare staff, but their expenses have already been included in the 2013 budget and were carried over into the proposed budgets.
Arneson added that the county is expected to receive some revenue from Obamacare due to enhanced federal reimbursement rates, but it is unclear how much that will be.
"There are many more unknowns than there are knowns for us," Arneson said, "but we are going with the information we have available and try to prepare the best that we can."
Rechtzigel also suggested looking at extending the replacement period on county computers and Sheriff's Office squad cars.
But Sheriff's Office officials warned that extending the replacement requirement for squad cars to 150,000 miles could end up costing the county more, as cars with 134,000 miles are currently needing major transmission repairs.
The proposed budgets for 2014 and 2015 are just over $63 million and $55.8 million respectively. A preliminary levy for 2014 is estimated at around $28 million, a 4.7 percent increase over the 2013 levy.
County personnel services constitute 44 percent of the proposed 2014 budget. The second highest expenditure is county services and charges at 31 percent of the budget.
County staff will continue to review revenue sources and cost-saving measures during the coming weeks, and will present additional findings at a Committee of the Whole meeting 4 p.m. Sept. 3 at the Government Center.
The committee also will finalize the preliminary 2014 levy amount in September.
"That will pretty much write the chapter for 2014," Rechtzigel said. "We'll need to have some concrete answers at that Committee of the Whole meeting."