- change ups
Current county budget appears to be balanced
At the halfway mark of the current fiscal year, revenue to Kent County’s general operating budget was $2.6 million below what it was at the same time last year. At just short of $47 million for the first six months of this year, the revenue figure represented a decline of 5.3 percent from 2009.
The county received less revenue from property taxes and interest income from investments over the year’s first half. Property-tax receipts were down by 12.5 percent from last year, while the interest earned had fallen by 292 percent over the same timeframe.
Total revenue for the first six months stood at nearly $47 million, which compares to $49.6 million for the first two quarters of last year. Still, County Fiscal Service Director Stephen Duarte felt the general operating budget would reach its projected revenue figure of $165.7 million by the end of the fiscal year on Dec. 31.
“Overall, although there are ups and downs, I do think the revenue target is attainable,” he said.
As far as expenditures were concerned, expenses were down overall by 2.3 percent halfway through the year compared to last year. In 2009, expenditures were $63.8 million. The six-month outlay this year was $62.3 million. Wages were down by nearly 4 percent, and the cost for group health insurance was down by 10 percent. But the fund’s pension cost was up by almost 35 percent at just under $2 million for the first half of this year. The cost was $1.48 million at last year’s midpoint.
Duarte told members of the county’s Finance Committee last week they shouldn’t expect the pension expense to drop dramatically in the second half of the year. “The pension is expected to continue on where it is,” he said.
Duarte explained that county officials weren’t certain what the pension cost for the year would be because they didn’t have the performance result of the fund’s investments from last year when they put together the budget projection. Later they learned the return rate was 17.6 percent in 2009.
“We will have a fairly stable cost for next year,” he said.
Transfers from general operations to a handful of funds, most of which are on the state’s fiscal year, was $14 million so far this year. That figure is about $1.6 million less than last year’s midpoint transfers. At the midway point the budget is facing a large deficit, like it did last year and likely will next year, as cash went out faster in the first six months than it came in. That’s because the county doesn’t receive the bulk of its tax revenue until the fall, when things even out.
Total expenditures for the current fiscal year are projected to be about $165.7 million, roughly just $8,300 short of the expected revenue total. “We are forecasting a break-even year for 2010,” said Duarte.
But Duarte had some words of caution for committee members. He said the county’s cash balances had fallen by almost $6 million halfway through this year: from $47.4 million last year to $41.5 million this year. He said the current balance would cover operations for 68 days — down from the 80 days the balances could cover last year. Those balances cover eight funds this year.
Duarte then said the general operating fund cash balance had dipped to $32.9 million, which is just $10 million above the emergency operating reserve fund. Year-by-year he said the county has gotten closer to the emergency mark. If the state doesn’t fulfill its promise to restart the county on revenue sharing payments next year, Duarte said the six-month figure in 2011 will be even closer to the emergency cash number. “We’re not quite there yet,” he said.
Duarte also remarked, though, that cash flow to general operations will pick up in the year’s second half when receipts from property taxes begin coming in next month. “By the end of the year we should be coming back up,” he said.
Halfway through 2009, the general operating budget was facing a $2.5 million deficit. But a second-half revenue surge gave the fund a surplus of nearly $800,000 for the fiscal year — the first surplus the budget has had in eight years.