PRESTONSBURG - Floyd County Fiscal Court members sat down again Monday to work on a spending plan for the upcoming fiscal year, but after going line-by-line through the budget, officials still found themselves with a nearly $300,000 shortfall.
Court members worked for nearly five hours Monday trying to find enough tiny cuts to the budget to stave off having to make drastic cuts to services, or increase revenues through additional fees and taxes.
Thus far, the magistrates have been against adding a 1 percent tax to the budget, which would bring in an estimated $1.9 million, and have also balked at having fee offices such as the county clerk and sheriff pay for their own health insurance.
Sheriff John K Blackburn says his office begins every new year with a zero balance, and asked the court how he is supposed to pay for his health insurance when he already has to borrow money to make payroll at the beginning of each year.
“You know I start out zero amount every year,” Blackburn said. “I have to borrow money every year from the state to get started.”
County treasurer David Layne responded that if the sheriff’s department began covering its own health insurance, they could pay their premium in December, when the department still has cash flow.
Denzil Allen, of Hatton and Allen Insurance, told the court that the county’s health insurance for the coming year would likely be $681 per month, per employee. Allen said he was still working to reduce the rate by another 1 percent. The rate includes a $500 deductible. The city of Prestonsburg has chosen to reduce costs through restructuring health care, and while monthly rates are significantly less, the costs are pushed on to employees who are faced with a deductible of $3,000.
Some progress was made during the meeting. After discovering a series of errors related to insurance costs based on incorrect numbers of employees, the court was able to make some significant savings. However, by meeting’s end, the court still remained $270,000 away from a balanced budget. Though no votes were taken, magistrates did appear to be working from a budget that included a 3 percent hotel tax. The use of money generated from the tax is however limited to tourism activities. Officials estimate that they will generate roughly $80,000 a year from the hotel tax.
During the marathon work session, the magistrates went line by line through the budget, looking to make cuts in everything from coffee to cell phones. Layne told them repeatedly that they would not find enough savings in line-item cuts to make up the difference.
“You can’t take single line-items and balance the budget,” Layne said. “You can’t.”
At one point, Magistrate John Goble said that they merely wanted to cut the “fluff.”
“I ain’t got no fluff to cut, John,” Layne responded. “We cut the fluff.”
“Some of them are overinflated,” Goble replied. “Cut $1,000 off each line-item.”
“There isn’t a thousand dollars to cut,” Layne said.
“It’s like the sky is falling,” Goble said.
“It has,” answered Layne.
Officials are considering a raise to the garbage rate, with an estimated $50,000 revenue per 50 cent raise to the rates. While senior rates are frozen, county taxpayers would be on the hook for as much as $16.25, to cover the $270,000 short fall.
Magistrates believed they had narrowed the gap another $200,000 drawing from a rainy day fund, until Judge-Executive R.D. “Doc” Marshall and Road Foreman Mike Jarrell informed them that three recent projects, which are still in progress, had likely already drained $156,000 of that fund.
If officials can’t find away to make serious cuts or find new revenues, the road department will likely feel the burden of next year’s budget woes. When asked by Magistrate Goble how much the county spent on roads last year, Jarrell said, “Oh hellfire, son.” According to Jarrell, the county spent $109,000 for gravel and $170,000 for fuel last year, which Layne and Jarrell both said is already over budget, with almost 60 days remaining in this fiscal year.
Removing another $270,000 from their budget would likely cripple the county’s ability to repair roads and respond to disasters. More ominous still is the fact that the county has not had a significant natural disaster since the Martin flood of 2009, nearly four years ago.
Adding further insult to injury for the county’s budget woes was yet another round of discussions related to “phantom bills” allegedly owed to Harpo Castle and C&C construction which have been estimated to be anywhere between $300,000 and $500,000. Current budget projections do not account for those alleged expenses, as the judge said no bills have submitted. Castle told Times Staff on Tuesday that the county actually owes three companies under his direction more than $800,000.
Judge-Executive R.D. “Doc” Marshall said last week that the county is expected to continue to receive coal severance through the 2013-14 fiscal year, but that more cuts will likely have to be made in next year’s budget.
The county has seen its budgets continue to shrink over the last three years, as coal severance tax revenues and the economy have both gone south, but must still have a balanced budget ready for state approval on June 1, and a second reading and approval of that budget by June 30.
The county’s next regularly scheduled meeting is Friday.