Alpena County budget in good shape
ALPENA -Alpena County is well on its way to ending the year ahead of budget. At the end of September the county fiscal year was 75 percent complete and the revenues thus far are well ahead of expected expenses. However, no matter how well the 2013 budget ends, 2014 will provide challenges, as revenues are expected to shrink once again.
During the Alpena County Finance Committee meeting on Wednesday, Treasurer Kim Ludlow updated the three commissioners on this year’s budget. She said the amount of revenue generated through September is at 84.21 percent, or $7,216,751, and the expenditures are only at 70.57 percent, or $6,016,221. By comparison through the end of the third quarter in 2012 the revenue was at $8,098,350, or 84.40 percent but the expenses were at 72.56 at $7,244185, much lower than this year.
Ludlow said the county’s revenue lags in the first half of the year until taxes are received and then the revenues increase sharply. She said the budget is in good shape and if nothing unexpected arises, it should remain strong until the end of the year. The county’s budget runs from Jan. 1 through Dec. 31. Ludlow said everyone has done a good job of limiting wasteful spending and monitoring the money it has.
“Everyone has been really good about watching the budgets really close and doing everything they can to stay within it,” Ludlow said. “They have had to watch their pennies very close and they have done that.”
Commissioner Lyle VanWormer, finance committee chair, said he is pleased with how the budget is playing out. He said there was a lot of work put into it toward the end of last year and so far the numbers are good. He said the credit should be given to the staff, who manage the county.
“I think this is sustainable at least through the end of the year. Our department heads are really the ones responsible for where the budget is right now and they have done a great job of being frugal and I hope that continues,” Van Wormer said. “We have managed to keep the expenditures down and a five percent difference is huge when your talking about an almost $9 million budget.”
Ludlow said the unrestricted fund balance at the beginning of the year was $3,384,620, which was an increase from Jan. 1 2012, when it was $3,318,404. The county’s cash on hand also has increased from $4,172,569 on Sept. 30, 2012, to $4,585,150 at the end of September this year. The county’s checking account holds $3,925,114 in cash that is unreserved and $660,036 that is reserved for specific use.
There will be a new series of challenges for the budget in 2014. Ludlow said it is already known there will be another dip in revenue and sticking to budget will be even more difficult next year.
“We are expecting a drop in revenue partly because of the elimination of personal property tax, which goes into effect January first,” Ludlow said. “Basically the law says any personal property that has a value of less than $40,000 is going to become exempt, so we will be losing more than in years past in county operating revenue.”
VanWormer said the commissioners have had a budget meeting to begin work on the 2014 budget. He said the county more than likely will begin with a deficit, but he is confident it will be balanced without a cut in workforce and hours.
“I think we are going to start at least another $300,000 less in revenue to work with than what we had last year. Over the last couple of years we have lost more than $1 million than what we had to work with,” VanWormer said. “We want to have a balanced budget and we have to have a balanced budget. We’ll get through this. Our thinking is we want to keep everybody working if we can.”
VanWormer said there also will be a significant reduction in expenses due to the energy improvements made by Ameresco on the county buildings. He said money that was budgeted for equipment replacement and repairs in the past can now be used elsewhere.
“The saving we have on the energy costs will be significant and we won’t have to keep putting money away for old equipment that could fail or need to be fixed,” Van Wormer said. “The major issues like the pool and the heating system at circuit court have been replaced and we won’t have to budget to care or replace them.”