Hudson: Sebastian County budget ‘on track’

While across the board budget cuts of 4% have been implemented across all city departments in Fort Smith, Sebastian County has not had the same problem, according to County Judge David Hudson.

Hudson, who last night (June 4) presented the county's mid-year 2013 budget review to the Quorum Court, said the county was on track to make it through the year without many unexpected changes to revenues or expenditures.

"Our revenues generally are on track. They still remain on track. We'll continue to monitor them closely," he said.

A powerpoint presentation prepared by Comptroller Kathy Lawrence did show possible shortfalls in fuel and utilities, with a recommendation to earmark $25,000 "for possible miscellaneous year-end appropriations" and another $20,000 for fuel from county general fund's un-obligated balance of $107,574 (figures accurate as of May 31).

Hudson said even with the earmarks, it is still not a sure thing that the additional money will need to be tapped, though he said the earmark would make funds available if needed.

Other adjustments have been made throughout the year to keep the county's budget on-track, he said, including reducing the general fund budget by $105,000 in salaries. The savings were realized by moving $61,000 in emergency management salaries to the road fund while at the same time not hiring two seasonal maintenance positions with a total combined salary of $44,000.

In total, minor budget reductions taken earlier in the year have saved the county $442,500 in the general fund, according to Lawrence's presentation.

While the budget may appear to be in good shape, Hudson said over the last three years it has gotten tighter.

THE WHIRLPOOL PROBLEM
According to figures from his office, in 2009, the county expended 90% of what was budgeted. in 2010, the figure was 84%, 2011 was 82% and 2012 jumped to 92%. By the end of 2013, Hudson said he expects that figure to be 94%.

But to make it to those figures, even during past years, has not been easy, he said.

"We've not budgeted capital for the last three years and then this year we didn't budget capital or cost of living adjustment. That just is indicating that the budget has been getting tighter over the years."

Making things more difficult starting with the 2014 budget cycle will be the recently dropped appraised values of homes north of the former Whirlpool manufacturing facility in Fort Smith, Hudson said.

The reduction in property values, and therefore a reduction in how much money the county takes in from personal property tax, will be lower, and he says it can lead right back to Whirlpool.

"Whenever you lose a major appraisal of (properties around) Whirlpool, then we've allowed in our budget about $100,000 less in property tax from that source, so that would be the most significant that I know of, and there would be some related ones that I could tell you," Hudson said.

In all, the property values in the area were reduced by 41.28%, going from a collective value of $9.831 million to $5.773 million. County Assessor Becky Yandell made the appraisals after being bombarded with calls in February and March.

When Yandell sent out notices on May 23 notifying property owners of the lower appraised values, she said the areas impacted included the neighborhood north of Ingersol that sits on a plume of potentially cancer-causing trichloroethylene (TCE) and the areas on the fringe of that plume, affecting 81 parcels of land.

SALARY CONTROLS
The other issue that has narrowed the amount appropriated and the amount spent, Hudson said, was hiring for positions without offsetting the costs. The problem has been somewhat persistent for the last five years and he said one way to stop it could be a revised pay system, one that would make pay grades more consistent with salaries across the region and hopefully keep salary costs in-check for years to come.

Hudson said he hopes to present a proposal for the revised pay system to the Quorum Court sometime in September, adding that even though the pay system would change, it would help with future costs and would not take away benefits or pay for current employees.

Barring any other unforeseen circumstances, such as the Whirlpool appraisals, Hudson said he is confident the county will make it to the end of the year in good fiscal shape.

"It looks like the budget should stay consistent, but we will keep a close eye on our key revenue sources – the sales tax, the one directly tied to economic activity out there – and the other revenue sources that are operationally-based. I'm hopeful that all of the revenues come in as projected. Or if some come in less, that others will come in higher to offset them."

In many past circumstances, he said that has been the case with county revenues.

"That's most likely what will happen this year," Hudson said.