San Juan County will rely on a series of short-term loans between various departments to shore up next year’s budget and to get its financial house in order as well.
At roughly $1 million, the single-largest loan, one of four approved Nov. 16 by the County Council, would erase a lingering deficit accumulated by the Solid Waste projects and utility funds over the past two years. Those two funds ended 2008 in the hole by a combined $346,000, and were $826,000 in the red by the end of 2009.
According to Auditor Milene Henley, the projects fund, also known as the capital fund, has proven to be the bigger liability of the two.
The council endorsed the package of inter-fund loans based on the recommendation, in part, of the county Finance Committee. Those loans, earmarked for the Department of Emergency Management, the Capital Improvement and Road funds, and for solid waste as well, are intended to eliminate persistent negative year-end balances in each of those funds.
Not only were the negative balances frowned upon in the most recent audit of the county by the state, Henley said carrying negative balances from one year to next amounts to “poor financial management.”
Though the council sided with most steps recommended by the Finance Committee, which consists of the auditor, treasurer and chair of the county council, it broke ranks by opting not to press the Land Bank to agree to lend $1 million from its stewardship fund to bailout solid waste. The council instead opted to tap modest amounts from five separate funds in order to cobble together that $1 million.
The breakdown of sources of revenue for the solid waste loan: Equipment Rental & Revolving — $400,000 (Public Works); Public Facilities Improvement: $200,000 (2260 fund); Document Preservation: $200,000 (auditor); Mental Health Tax: $1000,000 (Public Health); other grants/septic loans: $100,000 (Public Health).
The package of loans will be included as part of the 2011 budget, which will be up for review and for comment as part of a Nov. 30 public hearing. The council may chose to adopt the budget at that time.
The 2011 budget will include roughly $100,000 in additions as well as a reduction in expenses of an equal amount to offset those additions.
In a 4-2 decision, the council agreed as part of those additions to contribute $5,000 to help reestablish the Derelict Vessel Removal Program, earmark $26,000 to hire a part-time appraiser and provide $22,600 to the prosecutor to increase the hours of a chief civil deputy.
Funds targeted for loans
Solid Waste — $1 million (duration of loan: 5 yrs.)
Roads — $500,000 (1 yr.)
DEM — $140,000 (1 yr.)
Capital Improvement — $100,000 (1 yr.)
Source: County Finance Committee
