County department heads briefed on finances

W.GHENT–When Board of Supervisors Chairman Patrick Grattan (R-Kinderhook) welcomed department heads to a gathering at Kozel’s Restaurant August 9, he opened his remarks on the status of county finances by recounting a conversation with a caller from New York City seeking information on transportation to the county last weekend. She had told him that there were no Amtrak tickets available to Hudson. “That’s great news for Hudson,” Mr. Grattan said.

The session provided an overview of the county’s fiscal position. And while county spending is close to the targets set last year when the budget was prepared, and efforts are being made to increase revenues, officials said county government still doesn’t have the cash on hand needed to meet all its obligations on time.

The meeting included a briefing by county Controller Ronald Caponera on the county’s finances, based on 2011 audited numbers, since 2012 still is being audited. The controller’s slide presentation also projected figures for 2013. “Overall expenses are running close to budget,” Mr. Caponera said.

Of particular note is an increase in General Fund revenues, because sales tax exceeded the budgeted amount by nearly $4 million. Also, Department of Social Services revenue increased by $938,000, reflecting faster payments by the federal and state governments.

Revenues attributable to Pine Haven, the county’s skilled nursing and rehabilitation center in Philmont, show a wide swing, he said, since reimbursements are unpredictable and vary from year to year, depending upon intergovernmental payments. For example, he said, “Pine Haven received $1.3 million in 2012, and may receive another payment later this year. But we can’t always count on it.”

Seasonal operating expenses, primarily those for highways, including salt, snow removal, etc., are on track with budget. But benefits are running higher than expected–health care premiums, for example, increased by $800,000.

The county continues to take steps to collect overdue property taxes. “We budget based on collecting 100% of taxes due. In reality, we collect only 92%. We may have to retool our budget process to reflect the 8% we do not collect,” the controller told the county officials. He noted also that year-to-date 2013 figures reflect accumulated $5.4 million of uncollected back taxes. The county had collected $5.3 million as of June 30–$4.2 million of which is for 2009, 2010 and 2011.

Of primary importance is the county’s cash flow position. In 2009 the county had use $4 million from the its fund balance to balance the budget, and the picture worsened between 2008 and 2010, when revenues were below expenses, resulting in a combined $7 million from the fund balance. In 2011, 2012 and estimates for 2013, the cash from appropriated fund balance has been or will be $1.8 annually.

The county must make a $9 million pension payment in December, although it was budgeted at $8.7 million.

County officials believe there should be $7.5 million in cash at the end of 2013, but county Treasurer P.J. Keeler said, “We would like to have, and actually need, $10 million to $12 million on hand to operate and pay the bills on time.”

Mr. Caponera said that job vacancies can often be filled by increasing the salaries of existing employees to take over part of the responsibilities of the vacated position. He also noted that a good rule of thumb is for the county to maintain a cash position equal to 10% of the budget. In the county’s case, that figure is around $10 million, he said.

“In the short term, we can aggressively collect taxes,” said Mr. Grattan, adding, “In the longer term, divesting assets such as Okawamick… will help us put back money into the general fund. We have two big hits upcoming. The first is April 2014 when the county reimburses the school districts for taxes of $7.2 Million so that the schools can operate. Then we share sales tax revenue with towns and villages. We raise $33 million in taxes, but a lot of that goes to towns and schools, who rely on us.”

 

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