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Home > Blogs > Butler County News and Issues > Archives > 2010 > July > 26
Monday, July 26, 2010
Next time the budget axe falls, commissioners have a plan
How Butler County spends and cuts in future boom and bust years will be guided by a new budget plan adopted by commissioners this month.
The plan follows a recession-driven financial free-fall as the county’s revenues have shrunk $15.4 million, or 16 percent, since 2008. This has led to several rounds of cuts, more than 100 jobs lost and rancor among elected officials.
Here is a copy of the budget plan:
Analysis:
The new budget plan makes a big part of future decisions an automatic process, county officials say, taking some politicking and grandstanding out of the process.
When revenues start to inch back up, it directs the county on what to do with any surplus revenue. It says 20 percent will bolster reserves, 20 percent will fund capital expenditures, 30 percent will pay down debt and 30 percent will fund budget increases.
The plan also caps the ceiling on debt obligations the county can take on at 12 percent, about where they are now.
In down years, it sets minimum cash reserves at 10 percent of the budget and allows commissioners to use only a quarter of any amount over 10 percent to balance the budget. It also sets the goal of having a cash balance of 20 percent.
For example, the county’s projected budget next year is $78 million, and reserves are expected to be $8.7 million. This means they can only use $225,000 to offset any budget shortfall next year.
“This prevents you from using half your reserve in one year,” said Pete Landrum, county management and budget director.
Those reserves are necessary to maintain the county’s high bond rating, which the investment service Moody’s agreed to do last week in part because of the budget plan, Landrum said. This keeps interest rates low when the county borrows money or refinances loans.
Commissioners have relied heavily on reserves to stay in the black in recent years, dipping into it for $900,000 in December and another $500,000 in June. The fund totaled $13.5 million in 2009.
Landrum crafted the budget plan with input from the ad hoc budget advisory group, business and government leaders who met to form such a plan.
Do you think commissioners will stick to it?
