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

(Continued)

JEFFERSONVILLE — A SOLUTION?

Fifer and Snelling did agree on a remedy that may be available to the council.

“The only solution is for the county council to temporarily loan money from other funds,” Fifer said. “Those loans would have to be repaid by the end of the year. I have no idea about availability or which funds could be used for that, but that’s why I gave it to Scott [Lewis, the Clark County Council attorney], so that the council could start working on that before Monday to see if there is a solution.”

Snelling agreed and said, “there’s different ways they can do it. They can borrow from other funds then pay them back when the settlement comes; they can go out and get an anticipation loan to carry them over to the next settlement. It’ll just be up to the council and the commissioners to how they want to approach it. Probably the best solution is to get a short-term loan. The county’s done it before, a lot of counties do it.”

But the county council has previously said another temporary solution to its woes could come in the form of help from the county commissioners, who control the county’s Cumulative Capital and Economic Development Income Tax funds.

The council has previously requested the commissioners use some of its reserve funding to carry the county through the remainder of the year — a request the commissioners have rejected.

In an email Fifer wrote, “The commissioners have undertaken and completed every politically difficult task initially identified by Dan Eggermann when the magnitude of this problem became apparent.”

Eggermann helped prepare the county’s 2011 budget and an excess levy appeal, which was denied, but an appeal to the decision was filed in Indiana Tax Court on Aug. 1.

Fifer referenced the commissioners re-establishing the cumulative bridge tax and devoting EDIT and cumulative capital fund to the shortfall in the email.

The commissioners agreed to use up to $1.9 million remaining in its EDIT fund for various county costs, but have been reluctant to dedicate its reserve funding — the cumulative capital fund — to cover the shortfall in case they need it for an emergency.

But it’s a reluctance Lenfert said he hopes the commissioners will overcome, implying that the request would again be for the commissioners to make the payroll payments out of its cumulative capital fund.

“I would be very disappointed if they choose not to pay payroll while holding onto $1.2 million of tax dollars,” he said.

But Fifer said the cumulative capital funds will likely be eaten into by expenses later in the year and the commissioners are set on holding onto $500,000 for emergencies.

“Some of it is available, but it would be a very small Band-Aid on a very big problem,” he said.

Fifer continued in the email claiming that the council has not done all it can to address the shortfall by failing to enact a county wheel tax last summer or laying off county employees.

“The council has, to date, totally ducked responsibility regarding the issues they control,” he wrote.

Snelling offered that the delay in taking action has been the larger issue.

“I think the biggest problem was when they got the 1782 notice (from the Department of Local Government Finance) and the budgets were cut the county was kind of slow to adapt them to the new figure,” he said. “For the first few months [the county] kind of overspent.”

Again something that Fifer partially agreed with.

“That’s my frustration is we keep rearranging the deck chairs on the Titanic,” he said. “I think it’s legally required [to stop paying claims and payroll] and it will hit everybody right between the eyes that we’re not bluffing. This is not for political gain.”

Snelling again downplayed the looming shutdown and said he was confident the county can deal with the problem in the general fund.

Lenfert, while downplaying the dire nature of the memo sent out by Fifer, hoped it might prompt some action.

“If this memo from Greg is what it takes to get department heads to adjust their budgets to reflect what was passed down from the council in March, so be it,” he said.

Clark County Commissioners Ed Meyer and Les Young were contacted for this story but did not return calls as of press time.

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