Carroll County Supervisors received an early bit of fiscal coal in their Christmas stockings at a re-convened December 18 meeting in the Governmental Complex. The presentation was given by Gordon B. Jones, Member, CPA with Robinson, Farmer, Cox Associates.
“Normally we are able to get these statements to you well in advance of the audit so you have a chance to go through them. This year, the State is requiring us to present these before December 31, which requires a certification. So we’re a little more crunched this year on the timeline. I apologize,” said Jones. “It is a clean, unmodified report. The best you can do”
Minor items in the report included 12 instances of late conflict of interest disclosure forms. He said State Code requires the forms to be filed by January 15. A second issue concerned Governmental Accounting Standards Board (GASB) procedures requiring tax abatements to be reflected in County Financial Statements. The report found for Fiscal 2017 the amount of personal property taxes written off by the Treasurer climbed from $215,000 in 2016 to $243,000, and recommended the County use the State DMV Stop program to stop this.
Jones said adjustments had been made for Farmers’ Market financial data be reflected into the General Fund and said the account had been cleared out and would not be an issue in the future. He said the General Fund for the past five fiscal years shows a revenue increase of about 2.68 percent and expenditures increasing at about 2.2 percent.
“These are all good numbers. Unfortunately if you look at the change in Fund Balance, this year you’re dealing with an increase of about $871,000. You can see over the past five fiscal years a decrease in the fund balance in the General Fund every year. Not a good situation. You started off with $9.7 million in the General Fund Balance and ended up with $8.86 million,” Jones said.
He reported the cash balance at about $5.38 million and said the County Fund Balance had decreased about 49 percent since 2013 with a cash balance decrease of 58 percent since 2013.
“Pretty significant decreases there. Calculating the fund balance as a percentage of operating expenditures, the School Board fund balance is 12.1 with a cash balance of 7.4. We’d like to see those numbers at 15 percent at least,” Jones said “When you exclude the receivables from the schools the General Fund Balance is about 10 percent of operating expenditures with a share of this being federal money, so it will be paid back to the county. Carroll County is probably my biggest concern of my localities just because of the decrease in the fund balance over the five-year period. That’s telling you point blank. The good news is the requirement for us to present this earlier gets us here before budget time and gives you plenty of time to address it.”
Board Member Phil McCraw asked if this situation was common. Jones said two of five counties and two cities he is in charge of auditing were facing a similar situation but stopped short of saying it was common statewide. Jones said while it was difficult to single one area out for the deficit, the county was paying “pretty hefty” debt service payments. He did say it was good the county is decreasing principal balances quickly.
He said the audit’s expenditures report indicates some 29 percent goes to education (which hasn’t changed over the 5-year period). Jones reported a debt service increase from 8 percent to 11 percent. Public safety increased from 19 to 20 percent with expenditures consistently above revenues.
County Administrator Steve Truitt prepared a draft budget calendar for discussion and emendation. The board took it under advisement until its January 8 meeting. Outgoing Supervisors McCraw and Joshua Hendrick later reflected on their tenures.
“When you look at the presentation and the pie chart and expenditures from fiscal year 2013 to 2017 presentation, I think the two years leading to that are critical in telling the tale of where we are at financially. You see a big jump in some departments. Whether or not you can do anything, it is noteworthy to look at in a discussion outside of the debt service we have. One of the questions I’d ask is when was it signed on the dotted line and when did it hit the books,” said Hendrick. “That tells a different story too as far as what this board and previous boards have obligated to and when we started paying for it. You can point fingers all day long but now we have to figure out how to clean up the mess. That’s what we’ve been trying to do. This is the same fight, so to speak, that I signed up six years ago and in six years we’re no better off, as far as what the financial picture looks like in this presentation because it takes that long to get a handle on it. Be cognizant of that going forward.”
He said future cuts will not be gentle and the road going forward would not be easy. Hendrick said Capital Improvement Plan (CIP) work would have to proceed “hand in hand” with the School Board and its Operational Budget.
“Other than that I’ve really enjoyed my time on the board. It’s a learning experience if you allow it to be. You’ll learn something new every day. I appreciate the opportunity. It was humbling to be able to serve for six years. I think we have a great staff. It’s going to take everybody working together in an open-minded atmosphere. That doesn’t mean there won’t be disagreements. Discussion especially in the next two budgets will be testy for both the school administration and department heads. An open mind will have to be there,” Hendrick said.
McCraw called the evening bittersweet. He said physically he had not been able to do what he wanted to do for the past year or so because of his Multiple Sclerosis.
“It’s bitter because if my health had stayed good, I had all intentions of running one more time. Whether I’d been elected or not I don’t know and that’s a moot point. I’ve enjoyed this. Like Josh said, you learn something new all the time. I came on the board with a lot of small business background and thought I was really prepared for what this board would do and what my role would be. I found out pretty quick I wasn’t nearly as smart as I thought I was,” McCraw said.
Martin revisited an earlier discussion on a holographic projection of the Historic Carroll County Courthouse tragedy, a project mentioned by former County Administrator Gary Larrowe.
“For good or bad there’s an interest in this 1912 tragedy. Bus tour companies are interested in something new for them to visit,” said Martin. “It’s impossible for the County to get people to volunteer their time to do a courthouse tragedy drama (of this type). However, if you had it on a holographic image, you’d have to have a company to develop this. It might be it could turn into something worthwhile. Do I know that for a fact? No. I (also) don’t know the cost.”
“I don’t know who originally came up with the idea but it was left with Gary’s stuff and I know it had been kicked around and was very expensive at time. What it would be is a 3D, live-looking recreation of the event you could just play over and over in the actual space it occurred when you wanted to look at it. I would be happy to look into the cost,” Truitt said.
David Broyles may be reached at 276-779-4013 or on Twitter@CarrollNewsDave.