News and Tribune

March 1, 2013

Floyd facing $2.4M deficit

Offices asked to make cuts

By CHRIS MORRIS
chris.morris@newsandtribune.com

NEW ALBANY — Floyd County is facing a $2.4 million budget deficit, and unless action is taken in the next few weeks, money to fund the government will run out in September.

The Floyd County Council held a special meeting Thursday at the Pine View Government Center to inform officeholders and the public of the situation and what is being done to correct it. Until a plan is unveiled later in the month, Council President John Schellenberger said there would be a county hiring freeze for 30 days. 

There is also a spending freeze and each officeholder was asked to cut 10 percent of their budget by the end of the day Monday. The council will look at the recommendations and help make the cuts before coming up with a final plan to solve the problem in a week or two.

“Until we get a handle on the situation, the general fund is frozen, EDIT is frozen and [the] riverboat [fund] is frozen,” Schellenberger said. “Once we come up with a plan for savings, then hopefully we can get back on track. We know the situation is frustrating, but we are doing the best we can do.”

Schellenberger said there would be no layoffs or furloughs involved in the plan. He also said a committee has been formed that includes Director of County Operations Don Lopp, his assistant and former auditor Teresa Plaiss, and Amanda Ault, the new chief deputy auditor for Floyd County, to help make recommendations to fix the budget problem. He said they already found $2 million in cuts/savings, but another $400,000 will have to be found in the next few weeks.

Council members said the problem began when they received the wrong figures last fall from the auditor’s office when they were preparing the 2013 budget. They said they were told they had $11.1 million to work with in the general fund, but only had $9.4 million. They also thought they had $4.2 in CAGIT funds, but in reality had $3.4 million.

“It is not our job to do the work of the auditor’s office, but we were tasked to come up with a plan and see what the county’s financial state is ... and with the information we received, this is where we are,” Lopp said. “The recommendation regarding a hiring freeze is not something done without thought, but it does provide some savings.”

Auditor Darin Coddington was absent from the meeting, which also didn’t go unnoticed by some council members since his office was at the center of the budget issue.

“With the severity of this, I wonder why we don’t have the auditor here,” Councilman Brad Striegel said.

The council received notice late last week of the problem from the DLGF. That is when the committee was formed.

A 1782 notice from the Department of Local Government Finance sent to the council states that, “The June settlement error combined with the problems with the additional appropriations and the discrepancies concerning the encumbrances brought forward into 2012 are making financial information as of June 30, 2012, very uncertain. Given the uncertainty of the financial information provided, the safest approach at this point seems to be to let the county do an additional appropriation once a solid Jan. 1, 2013, cash balance can be determined for each fund.”

Many officeholders approached the council and said they were in the process of hiring someone for their office, or need to hire someone to fill an upcoming vacancy.

Also, tax bills will soon be sent out by L & D Mail Masters, which costs around $20,000. The council agreed the tax bills would go out on time since that generates revenue. County Clerk Linda Moeller was also in the process of purchasing new voting machines, and that is likely on hold for another 30 days.

Some council members said each situation should be looked at individually until the freeze is lifted. However, Councilwoman Dana Fendley and Councilman Steve Burks agreed that a freeze means a freeze for 30 days.

“Come September we will have no money. That is how serious this is,” Fendley said. “It’s only temporary so we will have to bite the bullet until we can get our hands around it.”

The council will meet in small groups to look at the proposed cuts before meeting March 12 for its regular meeting. Schellenberger said he hopes to be back “in business” April 1.

“We will know a lot more in 30 days that we know today,” Councilman Jim Wathen said. “Every department will feel some pain and there is no doubt the public will feel some pain.”