Piatt County officials hope that the county's financial bottom line can recover quickly through an influx of real estate taxes, especially after the last of the invested dollars in its General Fund were cashed this week to meet payroll.
The county had as much as $960,000 invested in Certificates of Deposit in the General Fund as recently as Feb. 1, but that had dropped to $160,000 when the county board finance committee met on June 30. With only $99,000 in available balances in the county's main operating fund and $160,000 in payroll due Friday, county officials saw no choice but to cash the remaining CDs.
County Treasurer Debbie Marshall said real estate tax dollars will begin to flow into county coffers soon, and will help shore up the fund balances.
“We will have money by the end of July,” she said. Due to the COVID-19 crisis, property owners were given an extra month to pay their first real estate tax installment, but Marshall said getting tax dollars deposited will lag just a week from normal.
“It is a cash flow issue,” she added, noting that real estate tax dollars – which are budgeted to make up about $1.3 million of the county's $5.8 million in revenue for the year – will not begin arriving until more than seven months into the fiscal year.
It's a typical situation, and one that means the county routinely uses built-up balances from those tax dollars received in the last half of the year to get it through to the next tax time.
But the drain on reserves this year has been much higher than normal. A look at treasurer's reports shows that the invested CDs in the General Fund have routinely typically bottomed out at no less than $680,000 at any time in a given year until 2019-20.
There is help on the way. The county board approved a 9.2 percent levy increase for the real estate taxes being paid this year, which should increase revenue in that line item by about $100,000. In addition, budget cuts implemented in 2019-20 are being adhered to for the most part, according to county finance officer Linda Leach.
She said most departments have spent 50 percent or less of their budgeted expenditures through the first six months of the fiscal year, which began on June 1.
“Most departments are right at or below what was spent last year at this time,” said Leach.
The county has also budgeted a $246,000 reimbursement from the nursing home, an arrangement that accounts for a portion of what the county pays for staff benefits at the long term care facility.
The nursing home committee on July 2 discussed that issue, but is considering a change that would instead have the nursing home begin footing the entire health insurance cost for the facility, which is currently about $22,000 per month. That would total around $264,000 annually, similar to the budgeted reimbursement in an arrangement that committee members felt would be a cleaner arrangement.
Dustin Harmon of Bellwether, the firm hired to help the county with its budgeting for 2021-22, said cashing in all of the county CDs is not the preferable path, but that there is little choice in this case.
“It's really something you want to avoid. Maybe you can plan with transfers earlier on, but the situation kind of dictates the action. If that's where you need to be, it has to be done,” said Harmon.
Marshall was confident that real estate taxes and an upcoming state replacement tax disbursement will help the county's bottom line.
“We will reinvest,” she said.
The county still has money in the bank. The June 1 treasurer's statement showed an $895,752 balance in the General Fund. But the General Corporate Fund, which is what is used to pay a good portion of county expenses, is $1.52 million in the red. The other line items in the General Fund prop up the overall balance, but most are dedicated funds like the county bridge fund that cannot be used for daily operational expenses.
The General Fund had a balance of $2,861,351 at the beginning of the fiscal year.
County Board Chairman Ray Spencer, while cognizant of the cash flow issues, complimented department heads for spending restraints so far this year.
“I think we knew it would be tight. I think we were optimistic, and still are,” he said.
Harmon told the committee that budget discussions have been held with county departments.
“All the department heads have worked really well with us. We really appreciate that,” he said, noting that packets would be sent out soon to department heads for budget requests.
“Once we get all that information, we'll have a rough draft (budget) ready at that point,” added Harmon.