County Income Down In First Half
The actual dollar drop totaled nearly $2 million to $3.8 million, a figure that represents only 4 percent of the $87.8 million the county expects to receive this year from property-tax payments. Those receipts will begin to trickle in next week with the bulk of the revenue to come in September and October, as a result of the state having moved the property-tax payment date from winter to summer.
In the meantime, Kent County Fiscal Services Director Robert White told members of the Finance Committee last week that the county has spent more than it has taken in for the first two quarters of this year. Expenditures from the general fund, which covers most of the services offered by the county, were up by 2 percent this year from last year, to $80.5 million.
White said the fund's cash balance declined by almost $37 million from the end of 2007 to June 30 this year, taking the account from $98.8 million to $61.9 million in six months. At the end of last year, the cash reserve would have covered 170 days of operations. By the end of June, the reserve could only cover 107 days.
At current revenue and spending levels, White said the cash balance would drop to about $50 million over the next 12 months and cover from 85 to 90 days of operations.
"The perception is the county is very, very rich," said Commissioner Jack Boelema.
Boelema said it is typically very difficult for him and fellow commissioners like Harold Mast to convince others in the county that
White said the general fund's unreserved and undesignated account was much lower than the cash balance at $13 million, money commissioners can spend on whatever services they see as necessary.
"You have a reasonable fund balance of $13 million. It's a one-time resource; you use it once, then it's gone," he told committee members. "The county does not have an excessive fund balance."
One reason the cash balance is so important to the county is that it's one of three major factors the ratings agencies consider when they grade the county's credit level, and it's the only element of the three the county can control. The others are the per-capita income of a county's residents and the unemployment level in a county.
White said income has dropped off in the last year and the jobless rate reached 7 percent in the county in June, a number that was under the state's 8.7 percent but well above the nation's 5.7 percent. The city of
Other reasons the general fund received less revenue was that income to the Register of Deeds Office was down by 21 percent from last year because there were fewer property transactions during the first six months this year, and interest income was off by 25 percent from last year. White said the fund's investments drew a return of 4.8 percent in August of 2007. By June 30, the halfway mark of the fiscal year, the fund's yield stood at 3.8 percent.
The major reason for the increase in general fund expenditures over the year's first half was the county had to increase its transfers to the Department of Human Services Childcare Fund by nearly 35 percent over last year to $2.8 million, which was up from $2.1 million.
A few weeks ago, commissioners allocated another $750,000 to the account because the department had removed more children from their homes this year than last year.
Commissioners are expected to transfer another $64,000 this week from the childcare fund to the DHS Social Welfare Fund to cover a shortfall in the department. DHS officials have control over a county checking account, and they wrote checks to vendors that exceeded the department's budget. Under state law, the county is responsible for those checks even though county officials didn't authorize the payments.
"It's our checking account in the DHS' hands. This time the checking account came up $64,000 short," said White.
"I hope we can get a handle on the DHS," said Commissioner Harold Voorhees. "It concerns me."
The general fund is expected to have revenue of $166.2 million with expenditures of $165.7 million by year's end, and result in a small surplus of $504,000.