Is Webster County broke? If so, why is the County broke? And how can it be fixed?
These and many other questions arise after a review of the County’s budget information published annually in the local newspaper each September (the County operates on a fiscal year that runs from July 1 to June 30).
You have likely seen the several pages of legal notices listing the County’s revenues, expenditures, and changes in fund balances. Trying to figure out what all that means is quite an undertaking.
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| County Budget Decisions Are Made At This Courthouse |
Over the next several weeks, the Commentator will attempt to unravel the facts, myths, and misinformation about the County’s budget predicament, if there is one at all. We will examine what is required to be published each year as a legal notice as well as examining the supporting documents maintained in the County Clerk’s office. We also hope to interview key county government officials that manage the budget and/or have an impact on the budget.
We start first with a review of the information about the budget contained in the annually published legal notices. Our review will include the fiscal years that ended on June 30, 2008, June 30, 2010, and June 30, 2012. These three years will show a trend in the County’s finances.
We also picked these years to evaluate the claims that:
(1) the current Magistrates (who took office January 1, 2009) set high bonds which result in more people being jailed, thereby increasing the Regional Jail bill that the County pays the State;
(2) coal severance revenues have decreased dramatically; and
(3) the County Commission is funding discretionary projects and spending more money than the revenues would allow.
We realize there are quite numerous and complex other claims that impact the budget and those will be addressed as well.
For the fiscal year ending June 30, 2008, the total of all revenue paid to the County was $4,236,093.91, and this amount included $428,595.66 paid to the County for the Back Fork Water Extension Project. The County paid out $428,612.66 for that water project. The total of all expenditures (including the water project expenditures) was $3,371,590.49. Simple math would reveal that the County took in more than it spent for fiscal year 2008 and the legal notice clearly shows that to be the case, listing an excess of revenues over expenditures of $864,503.42. At the start of the fiscal year, the County listed a beginning funds balance of $1,578,152.97. Adding the 2008 excess revenues to the beginning funds balance left the County with a whopping "surplus" of $2,442,656.39 as of June 30, 2008.
For the fiscal year ending June 30, 2010, total revenues were $3,598,534.07 and total expenditures were $4,123,079.97, for a deficiency of $524,545.97 (in other words, the County spent a half million more dollars than it took in during 2010). Even though the County apparently lost money in 2010, that half million dollar deficiency was applied to the beginning funds balance of $2,939,962.47, still leaving the County will a surplus on paper of $2,415,416.57. This “surplus” is almost identical to the “surplus” that existed in 2008.
And now to the most recent financial information available: For the fiscal year ending June 30, 2012, total revenues were $4,651,879.03 and total expenditures were $5,489,617.15, for a deficiency of $837,738.12. These figures include $1,354,189.74 paid to the County for the Diana Water Extension project but also include $1,354,363.18 paid out by the County for that project. Again, as in 2010, the County took in less than it paid out. Applying the $837,738.12 deficiency to the beginning funds balance (of $1,872,705.14) still left the County at the end of the 2012 fiscal year with a “surplus” of $1,034,967.02.
In the past, when public officials were asked about these surpluses, the answer was something to the effect that “well, that money isn’t really there, that’s just an accounting number.” In the upcoming weeks, the Commentator hopes to solve whether what was printed as a legal notice listing an ending funds balance of some $2.442 million dollars in 2008, $2.415 million dollars in 2010, and $1.034 million dollars in 2012 was correct or not.
At this point, we accept as true what the County put forth in the legal notices, that is, that the County was $2.442 million to the good back in 2008, $2.415 million in 2010, and $1.034 million in 2012. Without further explanation of these “surpluses,” the question must be asked as to whether the County’s budget is in trouble or not. At this point, we do not have an answer for our readers from our review of these figures.
For sake of analysis, let us review what the County took in as revenues and exclude the one time water projects mentioned above. In 2008, excluding the Back Fork project, actual revenue was $3,807,448.25. In 2010, actual revenue was $3,598,434.07. In 2012, excluding the Diana project, actual revenue was $3,297,479.85. These three years show a decline in revenue of $509,968.40 from 2008 to 2012.
What has caused this half million dollar decline in revenue?
Part of the answer to the decline in revenue is the coal severance fund. In 2008, the fund generated $668,450.12 for the County. In 2012, the fund generated $483,477.94, a decline of $184,972.18 from its 2008 level (about a 27 percent decline in coal severance revenue). We understand that the County can expect even less in coal severance revenue in future fiscal years due to the downturn in coal mining activity in the County. However, the decline in coal severance revenue is well less than half of the County’s half million dollar decline in total revenues from 2008 to 2012.
What makes up the other part of the decline in revenue is a question yet to be determined.
Now to the question of what the County is spending: In 2008, excluding the Back Fork project expenditures, the County spent $2,942,977.83. In 2010, the County spent $4,123,079.97. In 2012, excluding the Diana project expenditures, the County spent $4,135,253.97. These three years show an increase in spending of $1,192,276.14 from 2008 to 2012.
What has caused this $1.192 million dollar increase in spending? The Regional Jail bill? Funding discretionary projects?
Stayed tuned to the Commentator for answers to these and the other questions raised in this article.
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