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Budget hearings underway

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County> Council directed staff to include a 2 percent salary increase for employees

By Arin McKenna

Los Alamos County budget hearings got underway Monday night with a summary and report on the county’s financial outlook.
County Administrator Harry Burgess began the meeting with some recent news. The Government Finance Officers Associations of the United States and Canada (GFOA) has awarded the county the Distinguished Budget Presentation for the 22nd year in a row for its FY2013 budget. The county also received special recognition for its capital presentation in the budget from GFOA.
These awards are in addition to two awards announced in January, the GFOA’s Certificate of Achievement for Excellence in Financial Reporting (also 22 consecutive years) and an Audit Accountability Award from the New Mexico Association of Counties.
The county expects as much as a two percent increase in revenues in FY2015, approximated $1.3 million.
“Last year, when we adopted the FY2014 budget we were projecting a half million dollar deficit,” said Deputy County Administrator/Chief Financial Officer Steven Lynne. “So that’s a fairly good turnaround to go from a half million dollar deficit to $1.3 million surplus.”
Although revenues are showing a slight uptick, Lynne illustrated how drastically revenues have dropped. Gross Receipts Tax (GRT) revenues peaked in 2009 at $58 millions. 2014 is the low point in the county’s GRT revenue projections, at $40 million. Taxes accounted for 80 percent of the county’s revenue.
Staff proposed a flat budget for FY2015 to reduce the impact on services while allowing funds to recover.
One of the major savings in recurring expenses came from salaries. Council directed staff to include a 2 percent salary increase for employees in the FY2015 budget. However, full time employees (FTEs) have been reduced by 13.74, in addition to five positions eliminated the previous year.
The cost of benefits has increased. Medical insurance premiums increased by 14 percent in FY2014, and are expected to increase 10 percent in 2015. The plan was changed to mitigate even higher increases.
The county is centralizing communication costs into the information management division in order to realize savings through shared plans and the elimination of redundancy.
The largest increases in expenditures are due to increased operating costs for new facilities such as the nature center, teen center and White Rock library, as well as the new Fire Cooperative Agreement.
The county’s share for fire services increased $638,000 under the Fire Cooperative Agreement with the Department of Energy (DOE). However, the increase is offset by some benefits for the county, including the stability of a 10-year contract.
The county should also see revenue from ambulance services, which accrue to the county under the new agreement. Savings to the fund will also accrue to the county for the first time, in proportion to the county’s contribution. In the past, all savings reverted to DOE.
In special funds, the state is requiring to county to pay an additional $1.1 million into the Safety Net Care Pool. $800,000 of that amount comes from tax revenue, but $300,000 will be transferred from the general fund to cover the shortfall.
Capital expenditures are relatively neutral in FY2015, with the exception of the purchase of a new financial system for the county.
“Over the years, our systems have become more and more fractured. We’re really looking to consolidate and simplify, and along with that to reduce our ongoing maintenance and just our operating burden, the manpower burden associated with how fractured things have become,” Lynne said.
FY2016 will see two significant impacts on the budget.
The ice rink and golf course capital improvements are scheduled to get underway that year, at a cost of $6.2 million, which will result in a one-time negative balance. The projects do not affect long-term budget projections.
That $6.2 million will be offset by better than expected earnings on investment income in the Capital Projects Permanent Fund in FY2014, which allows for a transfer $1.5 million to the capital projects fund.
Lynne mentioned the possibility of an additional $4 million for the capital projects fund. He will present details when he discusses capital improvements later in the hearings.
In last year’s budget hearings, staff warned council of the need to re-implement $1.5 million in property taxes that was removed in FY 2011.
Lynne charted the impact of that increase. With it, the county’s funds should show a slow but steady increase into the future. Without the re-implementation, the county is projected to experience several years of negative balances.
Council also began hearing individual departmental reports on Monday. ‘
The only report that sparked debate was Sheriff Marco Lucero’s.
The sheriff’s department budget is expected to increase by 6 percent due to an increase in salaries and benefits.
Staff budgeted in a 15 percent increase for the county sheriff, assessor and probate judge, effective Jan. 1, 2015. The state legislature passed legislation this year allowing the increase. An increase in the clerk’s salary was not included, since that position is not up for reelection this year.
Council moved the salary increases to the parking lot for further discussion.
Lucero again requested $26,000 for a vehicle for the sheriff’s department, although he requested a truck rather than the law enforcement vehicle he has requested in the past.
“It’s really kind of bewildering to the other sheriffs to see that we’re the fourth wealthiest county in the nation, and the sheriff doesn’t have a vehicle,” Lucero said.
Lucero emphasized the use of his own vehicle for county business, and the poor mileage it gets.
“I travel throughout the state representing the county of Los Alamos,” Lucero said.
Councilor Kristin Henderson asked if Lucero was reimbursed for the mileage. Lucero responded that he is reimbursed at 56 cents per mile. Henderson asked how the reimbursement compared to the cost of a vehicle. Lucero responded that he believed the cost during his first year in office was $2,500, but added, “My travel has really increased within the last three and half years since I first came.”
No one asked why his travel has increased or where Lucero is traveling to. But the budget charts show a trend in the department’s expense.
Travel is included in the line item for “other expenses.” That item has $9,771 budgeted yearly. Actual expenses for that item were $9,401 in 2011. That jumped to $14,910 in 2012 and $15,092 in 2013.
Councilor David Izraelevitz asked if Lucero could use vehicles from the county motor pool. Lucero responded that he often has overnight travel, and county vehicles are only available for day use. Lucero also said to travel from his house to pick up a vehicle would be “counter-productive.”
“There are some reasons why our expectations of the sheriff’s office is less than other counties, and that is because we are the only H county in the state, and we expect most of our law enforcement to be done from the police department,” Councilor Steve Girrens said. “I’m in favor of finding some way to save money here, not increase our budget.”
Girrens asked to move the discussion to the parking lot, but the issue resolved itself.
Council did not approve Lucero’s request for a vehicle. Burgess said that staff could look at changing motor pool regulations to allow for overnight travel, and also look at vehicles the county may be retiring that could be assigned to the office.
Council ended Monday’s discussions with the county attorney’s report. Hearings resume tonight with the police department report, starting at 7 p.m. today in council chambers.
 

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