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Council hoping to heal ailing General Fund

February 22, 2012
In order to relieve a General Fund that has been ailing for years and recently has gotten worse, the Crawford County Council has moved $273,342 of appropriations for service contracts to newly-created line items within the Orange County Riverboat Admissions Fund.

The General Fund has been operating in deficit spending at a rate of about $500,000 each of the past two years and hasn't been in good health for some time. While the General Fund appears to have been in decent shape in 2009, that likely was only because of cuts made at the recommendation of a budget committee established in 2008 that masked the problem by creating temporary cash flow.

In short, the county's General Fund expenses have exceeded its income for some time, explained Dennie Stroud, a former long-time state finance employee who now works for the county.

The situation became worse when the county learned from the Indiana Department of Local Government Finance, which is in the process of certifying the county's 2012 budget, that this year's General Fund needed to be reduced by $35,000.

Collections in 2011 were 13-1/2 percent less — $289,000 — than what the state had certified the county to collect. Auditor Ricki Hawkins said that was due in part to fewer people paying property taxes than anticipated.

Stroud added that it also was because the DLGF does not take into account the so-called circuit breaker provision, which caps the amount of property taxes a person or business has to pay. He said there really isn't any way for local governments to predict how much of a hit they will take because of the circuit breaker.

The county also took a financial hit when the Indiana Department of Correction reduced the number of offenders it housed in the county jail, Hawkins said. The county, she noted, had received up to $1 million annually from housing the state inmates.

The council, following action taken by the board of commissioners, voted 6-0 (president Jerry Brewer was absent) at its Feb. 14 meeting to move the $273,342 of appropriations from the General Fund to the Orange County Riverboat Admissions Fund. The council chose to move the service contracts since regular employee salaries cannot be funded with riverboat gaming dollars. It moved more than what was needed in an effort to help the General Fund get caught up.

"What we're doing now is not a fix," Stroud said, adding that it is a step in the right direction.

The line items moved from the General Fund included the following: Auditor: Computer Services, $15,000; Treasurer: Computer Services, $15,082; Extension: Contract Services, $39,460; Youth Service Bureau, $36,800; Hoosier Hills PACT, $20,000; County Attorney, $50,000; Circuit Court: Public Defender Contract, $50,000; Jail: Doctor, $25,000; County Council: Attorney, $6,000; and Consultant Contract, $16,000.

Hawkins added that the $273,342 total is just the appropriation (the amount authorized to be spent), not the actual amount that will be spent. For 2011, the actual total spent was $160,292, she said, explaining the extra appropriations were built into the line items in case there are unexpected expenses later.

"We're trying to catch it early and get it going," she said.

To do that, the council instructed Hawkins to send a letter to department heads informing them of the seriousness of the situation.

The letter, dated Feb. 16, stated: "After reviewing finances and budget appropriations, the county council concluded that all departments should keep a close eye on their budgets, and do not exceed the approved amount. At this time there are no reserve funds for additional appropriations. You may do transfers within your budget with council approval."

Councilman Steve Bartels said the county cannot wait until a crisis to address the problem.

"That's wrong," he said.

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