County Courthouse officials were able to fix a $1.6 million deficit in Summit County’s general fund by tapping into “rainy day” reserves and savings earmarked for disaster relief.
The practice of taking money from the special accounts is new for the Summit County Council, which had never faced having to fill an unexpected shortfall in the county’s general fund. The reserves were not raided in the past when the financial outlook was rosier. Money in the general fund pays for the day-to-day operations of the government.
Under pressure this month to fix the deficit, the County Council voted 3-2 to remove $800,000 from the government’s disaster fund. County Councilmen Chris Robinson and David Ure were in the minority.
Robinson said borrowing more money from the rainy day account would have been a “more prudent” move. Raiding the disaster fund left about $230,000 in the account.
“A million dollars in the face of a big disaster is really not much money,” Robinson said in a telephone interview Tuesday. “We could burn through a million dollars in a heartbeat with the kind of disaster that we haven’t seen in a while.”
Meanwhile, the County Council last week used a variety of one-time fixes to erase the deficit in the general fund. Councilors learned of the shortfall last summer after concerns were expressed by the county’s independent auditing firm.
“When the outside auditor said, ‘hey, your upside down in the general fund,’ well, that hit us over the head like a ton of bricks,” Robinson explained. “We were under the impression from previous reports that we had weathered the storm well.”
Last year’s budget, which caused the deficit in the general fund, was approved in 2008 by former Summit County Commissioners Bob Richer, Ken Woolstenhulme and Sally Elliott. The current County Council was sworn into office in early 2009.
“The budget process to create that budget began in September 2008. So what happened is that 2009 budget was based on 2008 thinking,” Robinson said. “I think the County Commission formulated a budget that was not nearly conservative enough as it needed to be given the enormity of the recession.”
Robinson said he is frustrated by the financial reports he received last year from budget officials in the County Courthouse.
“We went through 2009 and we kept being told that it is bad but we have adjusted, we’ve deferred expenditures, we’ve deferred things,” Robinson said.
Last year, the Summit County Council tightened the budget it approved for 2010, he stressed.
“Do I think that we’re still bleeding? No. I think we’re probably much better because the 2010 budget was reduced down significantly,” Robinson said. “The problem is the quality of the reporting is still not up to snuff. We’re not getting reporting by fund and it’s not very predictive. We’re not monitoring separate funds and we need to do that.”
Summit County Manager Bob Jasper has pledged to improve the financial reporting in the County Courthouse, he said.
“[Jasper] has seen different forms of reporting, This is not his first trip around the block and I’m hopeful that he is going to come up with some stuff,” Robinson said.
Summit County violated state law by falling $753,603 into the red. County officials must have at least 5 percent of their general fund revenues available in the unreserved portion of the operating fund. The financial report showed Summit County with a $1.6 million deficit in the general fund’s unrestricted accounts.
Searching for money to patch the deficit, the County Council will also borrow up to $3 million from the rainy day account. The special fund currently contains about $13 million.
Shrinking revenues were the primary cause of the deficit in the general fund, said Matt Leavitt, an employee in the Summit County Auditor’s Office. The financial report showed the general fund receiving nearly $3.6 million less in property tax revenue, sales taxes, charges for services and interest income than anticipated in 2010.
The deficit has also been blamed on the costs for the new public health building at Quinn’s Junction. County officials originally expected to spend about $5.5 million on the building, according to Leavitt.
But the budget for the building increased to about $7 million, he said.
