PRINT ADS

Vernon County's financial advisor questioned last week why the county board has abandoned its hiring freeze and informed the finance committee that a projected $308,000 deficit may have grown to $500,000 since last fall.

Jack Vig of Vig and Associates, the county's audit firm, spoke to the county's finance committee last week. Vig was also present at a closed session meeting of the committee Tuesday morning, when more specific details of budget items were discussed.

Last week, Vig appeared before the committee to help it find a way of closing the budget gap, which was left over from last fall's budget process. The finance committee recommended a budget to the county board last fall that included a $308,000 shortfall on the presumption that a hiring freeze would eliminate six to 10 positions due to retirements and natural attrition. The hiring freeze was approved by the county board and was almost immediately ignored when the highway department replaced an employee who had passed away.

The highway department argued at the time that the county would lose revenue because the position was funded, at least in part, by state highway maintenance money. Since that time, there have been a number of positions refilled including three at last month's county board meeting. Finance committee chairperson Brian Richard-son asked for Vig's guidance on where to come up with the $308,000.

"You will remember one of the areas recommended in the fall was the hiring freeze," said Vig. "Have you totally abandoned that?"

Richardson said when the board decided to refill a position right after agreeing to the freeze they "blew that right out of the water."

Richardson reviewed a report on departmental spending and said the committee should bring some of those departments in and ask them why they went over last year's projected budget.

"The budget should be your budget and if you are over you should come back and explain or ask for more," said Richardson.

Vig said the projected $308,000 is now likely to be much larger. He said payroll cuts are the only option the county has to find the money.

"The sales tax may be down, the income from interest is down and you have the potential repairs to the dams out there," said Vig. "Do we really have a $308,000 deficit? It could be $500,000. It could be $100,000."

Vig said the he has projected that the county could have as much as $219,000 in state reimbursement funds remaining at the end of the year, but said the county should continue to implement the freeze in addition to that money because of the unknown amount of the deficit.

"When 75-80 percent of the cost of operation is salary and benefits you can't escape it," said Vig. "When you have a deficiency and you have a state-imposed levy cap and you can't generate revenue. I don't know how you can address big numbers without addressing salaries."

Vig said the county needs to get a handle on actual numbers from an audit underway and then continue to address ways to cut expenses. Vig said the larger departments have more of a chance of finding savings and an across-the-board cut to departments is usually not effective. Vig said some departments only have one employee and some departments have state-mandated positions.

"Each department is different," said Vig. "The jail and Vernon Manor do have licensing issues and you can't cut across the board. You are going to have to target the cuts and the department heads may be able to help with that. You may have a small department that collects fees and deals with the public and you ask them to cut 10 percent. It is very hard to do. The counties that deal with this usually look at the big departments. The answer to a $300,000 problem is not to get $500 out of every little department."

Vig said the highway department, sheriff's department, Vernon Manor and land and water conservation are generally the largest budgets.

Committee member Ole Yttri said some departments are more willing than others to look at the issue.

"Some will do it voluntarily, but others won't even look at it," said Yttri.

Vig said for the last several years the county has used its cash reserves in various department accounts like the highway department and the farm committee and now there is not much excess cash available.

"Some departments had a strong fund balance that they gave you to help weather this and you did not levy for those dollars," said Vig. "It's not there anymore and it's not like the problem happened just today."

Vig and county clerk Ron Hoff said they had estimated that one position was worth approximately $53,000 when benefits are factored in and the employee is on family health insurance.

Vig said there is a misperception that the hiring freeze would be permanent.

"I have heard department heads that have said they think that was the intent of the freeze, that they will lose a position and never ever get it back," said Vig. "I don't think that was the intent."

Committee member Geoffrey Banta said he voted to approve positions because he was under the understanding that the positions would be lost permanently.

Many on the committee felt the other reason for the failure of the freeze was because of the other board members not understanding the issue.

"The problem is we are not all working together," said Richardson "A department position may go to personnel and get approval and then go to the county board and then it is us versus the rest of the board."

Vig suggested a joint meeting with the personnel committee to get everyone on the same page with the issue. Vig said the board needs to find a way to make up for the shortfall because indications are that next year will be even more difficult.

"If you think this year is hard, wait until fall," said Vig. "I am telling you, you are the third county we have audited and they all have deficits. We have one county that owes other counties $250,000 for salt that it borrowed over the winter because it didn't have any. And the decisions you make now will impact next year. There are some counties stopping all projects."