Pepin County 2015 budget balanced, no debt incurred in 2014

The Pepin County Board of Supervisors adopted the proposed 2015 budget at a regular meeting November 12, and finance director Pamela DeWitt said she's impressed by the efforts of the department heads and county supervisors to balance the budget.
The County has multiple funding sources, including levy dollars, a variety of State aids, and a variety of grants, said DeWitt. In 2014, Pepin County paid off the last of its debt incurred prior to July 1, 2005, and incurred no new debt in 2014. No new debt was included to balance the 2015 Budget.
"We're required to use a certain dollar amount of our surplus per the county fund balance policy, and there's also a maximum we can use," DeWitt said. "We're on the high-end of the maximum we should use this year, and the same can be said of last year. We can't keep doing that and maintain the financial stability for the County. The County incurred debt in 2012 and 13 to balance the budget, and deferred principal payments until 2015, so we have that to deal with."
From 2013 to 2014, equalized valuations in Pepin County decreased $4,297,400, which DeWitt said was one cause of the mill rate increasing to 7.19. The total equalized value of property in Pepin County is $537,921,200.
New construction (net) in 2014 was at .687 percent, which per state statute allowed the levy to increase by $24,729. The levy total for the 2015 budget was set at $3.87 million.
"The levy is also adjusted for bridge aid and libraries, which came in at $12,600 and $75,508, respectively," DeWitt said.
The total 2015 budget levy is $3,870,119, a net increase of $83,073.
The general fund budget, which includes revenue such as taxes, State aid, fees and permits, and other sources including any surplus used which was $415,416 in 2014, but the finance committee approved $250,000 of surplus to be used for 2015, a $165,415.87 decrease. The Human Services Fund is budgeted for a $67,283 revenue decrease, while the Health Department Fund is budgeted with a $20,877 revenue increase.
The 2015 contingency fund is also budgeted with a decrease of $5,938, down 12.2 percent.
DeWitt said in the past, she was told departments simply submitted their budgets after approval from their oversight committees, and the finance director, finance committee and Board would make cuts to balance the budget.
This year, DeWitt said she tried something different.
"I told the department heads they know their departments the best," she said. "They had the opportunity to get the budget as close to balanced as possible."
DeWitt said the highway department and sheriff's department budgets came in with significant increases over the prior year budget.
"Some oversight committees met for hours and held special meetings to achieve a balanced budget," she said.
Because oversight committees couldn't put everything in the budget, DeWitt said they came up with a strategic list for what wasn't included in the budget so the County can begin to plan for the expense without forgetting about it.
"Two of the major items on the strategic list are highway maintenance and communications equipment in the sheriff's department," she said.
Pepin County is responsible for 155 miles of roads which are currently maintained on a 30-year life cycle.
"We need to plan out things like seal coating and paving to make sure every mile is touched every 30 years," she said. "We haven't had the budget dollars the last couple of years to keep up with the plan, so we haven't been able to do some road maintenance per the 30 year schedule. At this time, we're a little over $400,000 short of what we needed to achieve that goal."
DeWitt said some counties do bonding and incur debt.
"We need to look at the future of our operational spending, the possibility of incurring debt and the resulting payments, and see what we can do about funding all the county needs," she said. "We need to look at mandated versus non-mandated programs, how each program is funded and ask ourselves if we're running mandated programs cost-efficiently."
Six months into the year, DeWitt said the departments estimate where they'll come in for the year and use this as a basis for the following years budget in addition to prior year actual results.
Pepin County's general fund budget increased 2.07 percent, with $250,000 of surplus applied. At the end of the 2014 year, Pepin County will be in debt $583,037.
Overall, the County resources and expenses were budgeted to decrease $33,302.
Of the total $12,360,968 2015 budget, DeWitt pointed out that over half is for salaries and fringe benefits which account for $6,209,714. A high number of health insurance claims drove up 2015 insurance rates, said DeWitt. In 2014, health insurance accounted for 8.95 percent of the total budget. In 2015, health insurance will account for 9.57 percent of the total budget.
"The amount the County is paying for health insurance has increased almost $84,000 from last year," DeWitt said. "The dollar amount the county is paying per employee has increased, but the percentage of total cost being paid is down when using what the state has determined as the basis for the total cost which changed in 2015 for Pepin County. Thus, the personnel committee felt a pay increase was necessary because of increasing insurance costs and increases in the cost of living indicators."
Currently, the sheriff's department has six cars on a six-year rotation, but is looking at transitioning to seven SUVs on a seven-year rotation as future vehicles are purchased.
"This gives the sheriff a vehicle to use without us having to pay mileage for their personal vehicle, and should save the County money," DeWitt said.
$55,000 is Budgeted to be cut from the transportation budget in human services with the specific cost efficiencies yet to be implemented.
"The County is required to match 20 percent of the state funds received for the transportation program," she said. "I am told that the transportation program in Pepin County is much more robust than almost any other county in the State. We were significantly exceeding what the State requires in county matched funding for the program."
Overall, DeWitt said the County will have to look at the needs, and what it can afford in the budget to ensure the continued overall financial stability of the County.