Property tax revenues for Fayette County government are expected to take another dip again this year, putting further pressure on the county budget.
Based on preliminary information from the tax assessor’s office, the hit could further reduce the county’s tax digest between 6 and 10 percent, the Fayette County Commission was told at its retreat Friday morning.
The county is budgeting for an 8 percent dip, which would mean $2.2 million less in the county’s general fund, along with a $381,000 hit to the fire fund and a $141,000 hit to the EMS fund.
To cover the loss, county finance staff is recommending that the commission consider using reserves to fund this year’s budget, along with a potential property tax increase on top of significant cuts to the county’s capital improvement plan.
Without a millage rate increase, “I think you’re just prolonging the inevitable coming down the road and eroding your fiscal capability to manage that,” said County Manager Jack Krakeel.
Property taxes account for almost two-thirds of the county’s annual revenue stream, so any dip in them means a significant decrease in funding.
While the county has $7.4 million available in unrestricted cash reserves which have been stockpiled for the economic downturn, the county is facing some significant expenses in the coming year that threaten to eat up at least a healthy chunk of that figure, according to County Finance Director Mary Holland.
“We can erase that $7 million in one year easily,” County Manager Jack Krakeel told the commission. He also noted that the county staff and also its constitutional officers have done very well in making cuts over the past several years, among which have been a hiring freeze for all non-public safety staff.
Cuts to the county’s public improvement plan will likely focus on recreation projects, including money planned for the second and third phases of Kenwood Park.
One of the large fiscal concerns facing the county this year is that the vehicle replacement program has been very restricted in the past several years, and staff worries it will not be able to delay significant expenditures much longer.
Getting back on track with vehicle replacements will cost the county about $10 million over the next five years, Holland said. That figure includes a large number of vehicles for the sheriff’s department, along with several pumpers, tankers and a squad truck for the fire department, she added.
Commissioner Allen McCarty said he has noted that some of the county’s vehicles are looking “ragged” and he realizes the replacement program is important.
Another significant concern is the potential cost of a needed technology upgrade for the county to improve cyber security, and also the potential cost of repairs to the “old” section of the Fayette County Jail so it can be used in the future.
The net result is that the county will not have any additional staff positions created this year, because the county just can’t afford it, Krakeel said.
As further cost-savings measures, the county is looking into changes to its insurance program including an exploration of the possibility of having a medical clinic on county property that could be utilized by county employees and their families, Krakeel said. That clinic could be staffed by a physician’s assistant under the supervision of a physician, and be made available at no cost to the employee, Krakeel said.
The county would save money using that concept, as it wouldn’t be paying for employees to be seen at other area medical facilities, he added.
The county is also looking at potential changes to help save money on healthcare provided to inmates at the Fayette County Jail, Krakeel said. Holland previously had noted that jail housing costs have skyrocketed, and Krakeel noted that the jail’s population has increased substantially in the past year or so.
Commissioner Steve Brown recommended adding a 10-percent across the board “cut” to departmental budgets, with the idea that if spending above that level were necessary the department director could come back to the commission and request authorization for it.
