In a split 3-2 decision Tuesday night, the Ashe County Board of Commissioners approved the 2012-2013 county budget.
“We just didn’t see eye-to-eye working through this budget,” said Commissioner Gary Roark who voted against the budget, along with Commissioner Gerald Price. Commissioners Judy Poe, William Sands, and Larry Rhodes voted to pass the budget.
The $32,794,622 approved budget holds the county’s ad valorem tax rate steady at $.40 cents per $100 valuation, meaning county property taxes will not increase, but does not provide the entirety of nearly $540,000 in additional funding requested by the Ashe County Board of Education.
Like last year’s budget, the 2012-2013 budget will again dip into what is essentially the county’s savings fund, the general fund. The approved budget uses $2,947,286 to balance the budget, an increase of $299,697 above last year’s fund balance appropriation.
Ashe County Manager Pat Mitchell said the move is necessary to balance the budget, but has said repeatedly the county must be careful to manage its fund balance.
“History has shown us through situations like New River (Behavioral Healthcare) that we’ve got to maintain our fund balance,” said Mitchell in an interview Wednesday morning. “If we draw too much on our fund balance and it gets too low, that is unhealthy. You don’t want a fund balance that is too high, because you’re essentially holding taxpayer dollars that could be better used someplace else. But if the fund balance drops too low, and we don’t have the funds to cover those costs that arise, then we have real problems.”
Mitchell used the New River Behavioral Healthcare crisis last fall as an example of the need for a healthy fund balance.
“We paid out over $400,000 for something that we had no other choice about,” said Mitchell. “A healthy fund balance helps protect you from those sorts of things.”
Mitchell said the Local Government Commission generally recommends a fund balance of at least 8 percent, but said the size of Ashe County means our percentage needs to be higher.
“As small as we are, eight percent is not nearly enough,” said Mitchell. “I think somewhere above 18 percent, and preferably between 20 and 25 percent is ideal.”
Mitchell said the budget approved Monday night will leave Ashe County with a fund balance between 19.7 and 20 percent.
During her budget message on May 25, Mitchell told commissioners the budget does take into consideration any appropriations from the general fund in case the county faces additional issues with NRBH, but said she did budget an additional $20,000 to deal with legal fees as the lawsuit launched by former employees in April of this year works its way through the courts.
The budget also provides county employees with a two percent raise, their first in two years, though Mitchell said three years ago, county employees received a one percent salary increase.
“The employee (salary) increase was not in the original budget recommendation, but commissioners brought up the idea during the worksessions,” said Mitchell. “There was a great deal of discussion among commissioners on raising the salaries by two or three percent, but they ultimately settled on two.”
The two percent raise added roughly $184,000 to the final budget.
The budget increased education spending by approximately 4.05 percent, but did not provide Ashe County Schools with the nearly $540,000 increase in funding it requested on June 5.
Ashe County Schools is facing a potential funding shortfall of more than $1.1 million because of the loss of state and federal funding over the last three years.
“The final budget for Ashe County Schools is a moving target,” said Superintendent of Ashe County Schools Dr. Travis Reeves on June 5. “We do know that the federal money is going away and, in the best case scenario, we’re still looking at a million dollar shortfall if the house budget that has been proposed is approved.”
The $1.1 million budget shortfall county schools are facing in 2012-2013 is a result of a cost saving measure called a discretionary reversion, a tactic used by state legislators that allows local school systems the flexibility to determine the appropriate budget areas to cut.
A “discretionary reversion” is essentially the state requiring the district to send back a portion of its already allocated funding.
Since the budget crisis began in 2008, the district has had to “send back” to Raleigh over $2.2 million.
ACS will also be without $1.1 million in additional state and federal funding in 2012-2013 the system has received over the past three years. The American Recovery and Reinvestment Act, Edujobs, and state “stabilization” dollars have been exhausted. In total, the Ashe County School System is facing a total funding shortfall of approximately $2.2 million.
School Board Member Dr. Lee Beckworth, addressing commissioners during the budget hearings public comment period said, “I’m here to ask your guidance for the future. I know you spend a lot of time working on your budget to come up with the numbers for the school system. It’s a lot less than we had hoped for and, I guess for me personally, I’m asking for guidance for next year on what we need to do to convince you we do have a great need for our children, in terms of funding, in this county.”
“In the time that I’ve been here, every year that I’ve been here we’ve discussed fund balance, ours and the school systems,” said Mitchell. “I though Dr. Beckworth’s comments were on target and I gathered they are going to be spending down some of their fund balance. I think going forward, it’s got to be a balance between the two boards, to see where those various fund balances need to be.”
Mitchell said she understands the school system’s position, but said the county must protect its own fund balance.
“We simply cannot take our fund balance down too far,” said Mitchell. “This is always going to be part of the conversation when you’ve got two boards that are trying to balance their resources against the resources of the other board.”
Mitchell said commissioners will meet with the board of education and central office staff starting in August or September to outline long range spending and capital improvement plans.
“A new potential middle school will be a part of those talks,” said Mitchell. “We need to start doing some long range planning, so that we can identify our infrastructure needs so we can review that each budgeting session to stay on top of what we need to do. It’s a critical piece of budgeting responsibility.”
Ashe County Public Library Board Member Jenny Bush addressed commissioners during the public comment period and made one last case for an additional $18,000, “to help keep the doors open.”
Bush said the funding is necessary to help the library maintain its 56 hours per week.
“In difficult economic times, the people of Ashe County are turning to their library for help finding jobs,” said Bush. “The library staff helps residents with resumes, cover letters, and job searches. We have a small business center which provides information and free counseling for entrepreneurs, and our Voluntary Income Tax Assistance (VITA) program helps residents file their tax returns.”
The VITA program brought in more than $350,000 in federal tax refunds this year, according to Bush.
Mitchell said the library received level funding of more than $400,000, in addition to funding the library’s heating and lighting costs, cleaning, maintenance, and janitorial supplies, and more than $470,000 in debt service payments on the library building each year. In total, the library budget is $1,021,150.
“When we went through and considered the library,” said Mitchell, “I’ll admit it’s one of the most critical pieces of economic infrastructure a community has. It benefits so many people.”
The approved budget, and Mitchell’s budget message, are available for download in full at www.jeffersonpost.com.