County may cut workers

October 12, 2009
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If the current budget projection for the general fund doesn’t change, Kent County will eliminate 145 positions for the next fiscal year that starts Jan. 1.

The cuts could mean the equivalent of 82 full-time employees will be laid off, while another 40 positions could remain vacant. A number of part-time workers will also be laid off. The largest single job loss will come in the Sheriff’s Department where 33 full-time employees may be out of work come January.

“This is sobering,” said County Commissioner Dean Agee, who also chairs the Finance Committee which first heard of the projected layoffs last week at a budget meeting.

The job reduction is the result of department heads having to reduce expenses for the 2010 general fund, because the budget was targeted earlier this year to have up to a $15 million deficit without rolling back expenditures to the 2008 level. Almost every department has eliminated at least one full-time position.

County Administrator and Controller Daryl Delabbio told committee members that job reductions have been made for the last several years, but not to this extent.

“What we tried to do was to take all the information from the departments and tried to fit it into the fund balance,” he said. “This is what is proposed in the budget. Obviously, the board of commissioners will have the final say.”

But even with the reductions, the general fund, which covers a majority of the county’s services, is still facing a preliminary shortfall of $2.4 million.

“That will make it nine years in a row of drawing down reserves — nine years in a row of fund deficits,” said County Fiscal Services Director Robert White.

White said revenue to the general fund is expected to rise next year to $165 million. The increase, though, is only seven-tenths of one percent above the 2009 level, and a number of one-time revenue additions will make up most of the increase.

Revenue to the fund from property taxes is likely to decline by about $250,000 next year as inflation is expected to be a negative three-tenths of one percent, which will drive down the taxable value of just about every property. Every one-tenth of a percent drop costs the county about $80,000 in property-tax revenue.

“Virtually everyone will see a decrease in taxable value,” said White.

“There is very little being built right, compared to three or four years ago. You aren’t going to see any real gains in property-tax revenue to offset any deficit,” he added.

The 2010 budget includes a $10.25-million infusion from the county’s revenue-sharing reserve fund, but that transfer is normally closer to $12 million.

A bill in the state House Appropriations Committee, however, requires counties to ignore inflation hikes and scale back transfers from the reserve to the 2004 level, which was $10.3 million for Kent County. White didn’t think action would be taken on the bill by the end of this year, and it would remain in the committee until next year.

The county’s revenue-sharing reserve fund is expected to run out of cash in mid-2011, the year lawmakers said Kent would return to receiving revenue-sharing payments. White said 18 counties have exhausted their reserve funds.

Expenditures from the general fund are projected to reach $167.9 million next year. That is up slightly from this year, despite the cuts department directors made.

“These are going down to levels that will be very hard to sustain,” said White of the reductions that have been made

The county will have to reach into the fund’s unreserved balance to fill the $2.4 million deficit. Doing so will reduce the fund balance to $5.8 million at the end of 2010. When 2007 ended, the fund balance was $14.4 million.

“We’ve been using the reserves to balance the general fund,” said Commissioner Richard Vander Molen, “and we will be doing that again.”

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