News and Tribune

Business/Money

August 3, 2011

Clark County payroll pinched: Attorney recommends layoffs for all Clark County employees starting next week

$1.25 million deficit leaves council looking for loan or for help from commissioners

JEFFERSONVILLE — Clark County employees could face layoffs as early as next week if the Clark County Council cannot secure a temporary loan or find another source of funding, according to Clark County Commissioners’ Attorney Greg Fifer.

In a memorandum sent out by Fifer on Tuesday, it was recommended that if the county council doesn’t secure funding by Tuesday, Aug. 9, the county department heads should issue written layoff notices to all of the county’s employees and close the county offices.

The drastic recommendation comes as a result of information received by Commissioner Ed Meyer and Jill Oca, a certified public accountant working with the county, in a recent meeting with the State Board of Accounts informing them that the county’s general fund was $800,000 in the negative, or red.

FOLLOW THE MONEY

The county receives its money from two tax distributions annually, one in a spring settlement and one as a fall settlement. The spring settlement has already been received by the county and the fall distribution is not expected to come in until December. While it is not uncommon for the county to run a deficit while waiting for the tax distribution to be collected, it has run out of funding much earlier than expected this year.

“That’s 45 days after we got half of our money for the year,” Fifer said of the county’s general fund being a negative amount. “It’s not unusual for it to go into the red, but it is usually at the end of that six-month period and you’re waiting for [money] to come in. But to already be in the red is an indication of our financial distress. We’ve hit the wall two months sooner than I expected to.”

Clark County Auditor R. Monty Snelling admitted the general fund was running in the red, but downplayed its significance.

“The state does not like it,” he said, referring to operating on a deficit. “As far as I know, every county we talk to does the same thing. It’s just a common thing.”

Councilman Brian Lenfert echoed Snelling’s statement.

“Every unit of government runs in the red until the settlement comes in,” he said.

Lenfert added that it is acceptable as long as the fund does not go into a deficit greater than what the fall settlement equals.

“This same memo could have been sent out in April before the spring installment came in,” he said. “It’s my understanding there will be at least $2.5 million coming in the fall settlement.”

But according to figures from the auditor’s office, as of Tuesday, the deficit in the general fund has grown beyond the SBOA’s $800,000 calculation and currently sits at more than $1.24 million.

So even after the fall disbursement, the county would have a little more than $1 million to fund its operations for the rest of the year.

“I have no idea how fast [the county’s] spending money out of the general fund,” Fifer said.

When asked how the county could expect to fund the rest of the year’s operations on $1 million he said, “that’s the council’s job.”

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