From its beginning in late August 2013 until now, this has been the most unique, unusual – pick an adjective – county budget process in the county's history, and it still may not be over.
In the latest chapter, on Tuesday, Jan. 14, county council held a special meeting after the county received its 1782 form back from the state's Division of Local Government Finance (DLGF). The 1782 tells the county how much it has to cut out of its General Fund.
It was terrible news. The state told council it had to cut $1.6 million from the General Fund, from $4.9 to a little more than $3.3 million, a cut of more than 30 percent. According to some council members, they went into the meeting thinking they were going to layoff as few as seven to as many as 20 county employees and maybe more. There are around 100 county employees, so it could have been as many as 20 percent of the workforce.
To council president Jeff Koch, the form made no sense whatsoever. Council had asked for no large increase in spending over 2013. Therefore the hit was coming from the revenue side. Lawrenceburg reneged on its contract it signed in 2006 for its $500,000 annual payment to Franklin County, leaving $1.1 million unaccounted for. There was roughly $350,000 council put in jeopardy by missing an advertising deadline during the budgetary process, but the DLGF gave council a pass on that front, council said.
Therefore, there is apparently a $1.1 million revenue shortfall somewhere.
Auditor Steve Brack, first deputy Debbie Richardson and DLGF employee Cathy Stockhoff worked diligently on the situation after the county received the 1782 form on Friday, Jan. 10. Stockhoff is a Brookville resident and a former Franklin County deputy auditor. Brack and Richardson called the DLGF Indianapolis office early and often, asking questions on the funding, often exasperating the state officials, Brack and Richardson said.
Brack was called away on a family medical emergency, leaving Richardson and Stockhoff working on the problem long into Monday night, Jan. 13.
At some point, they found a document in the downstairs archive in the Government Center from 2003 where some investment CDs in the amount of $3.1 million was put on the wrong line on a form. And that amount has been put in the wrong line since that time. The funds were investment funds and were attributable to the General Fund.
That led to phone calls to the DLGF on Tuesday, and at 4:20 p.m. on Tuesday, Jan. 14, the county received a second 1782 form that put the county's General Fund at $4.9 million, the amount the county council had requested. It meant no layoffs, no cuts, the employees received raises of 50 cents, and the Veterans Services Officer's part-time position was made full-time.
At least twice during the brief, 16-minute meeting, and later during the follow-up questions, Koch said the newly found money was not the county's savings. He said the money was revenue DLGF figured as part of the General Fund but was not savings.
“Let's get this straight,” Koch said. “This is not dipping out or spending any of the savings. We are not touching any of that. That (money) goes into that enormous calculation they do. That is part of the puzzle that they do. That is what got us to be able to fund (the budget).”
However, after council quickly and unanimously approved sending the 1782 form back to the DLGF, council members Daryl Kramer and Aaron Leffingwell had questions. They looked at it that night and then went to the auditor's office on Wednesday, Jan. 15, to tell Brack and Richardson of their findings. The money in question was the county's savings. They met with Brack and Richardson for two hours on the subject.
That meant when the county funded the $4.9 million budget and spent that amount in 2014, it would spend the bulk of the county's savings account. The savings account would go from $3.1 million to $800,000 by Dec. 31, according to the two men.
And spending the bulk of the county's savings could be devastating to the county, according to commission president Tom Wilson. He said the county's bond rating and other factors are based on what is left in the savings.
Kramer said the state suggests counties should have at least half a year's budget in savings. That is for cash-flow situations and in case of emergencies as well as unforeseen situations regarding property tax problems.
In the recent past, there have been delays in getting property tax statements out, meaning the flow of tax money into the county's coffers has been delayed. If that was to occur with the county's savings depleted, the county would not have enough money to pay its creditors or to meet payroll.
However, Koch disagrees with Kramer and Leffingwell. Koch said the money is not the county’s savings. He said he talked with a DLGF representative who told him as long as the County Council did not approve any additional appropriations it would not use any of the county’s savings.
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