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Commissioners begin work on next budget

By Valerie Baldowski

vbaldowski@henryherald.com

The Henry County Board of Commissioners have begun preparations for setting the county's fiscal year 2011 budget.

During a called meeting, Wednesday, at the County Administration building in McDonough, the commission discussed three possible scenarios, in order to balance next year's budget. All three involve millage-rate increases, employee furloughs, establishing a new fee for local businesses and cuts in expenditures in several categories.

Fiscal year 2011 begins July 1. The county expects to adopt next year's budget during its second meeting in June, according to Henry County Manager James "Butch" Sanders.

Under one scenario, the county would raise the millage rate to 11.24 mills, said Mike Bush, county Finance Director. Under the second scenario, the millage rate would be hiked to 11.5 mills, and under the third scenario, the millage rate would be increased to 11.75 mills, Bush said. The current millage rate is 10.969 mills.

Bush said the first two scenarios would require the county to make withdrawals from its fund balance (or reserves), but the third scenario would allow the county to add to it. He said he supports the third alternative. "Any time I can build the fund balance, it adds to the financial health of Henry County," said Bush.

The increase in the county millage rate, he said, would be more than offset by the reduction in assessed property values. For example, under the current millage rate, a home valued at $237,100 in 2009 would require a 2009 property tax payment of $3,280, said Bush. That same home, re-assessed at $199,900 in 2010, would require a property tax payment of $2,760.

Raising the county government's portion of the millage rate would still result in a property-tax savings for home owners, he said. "They'll pay less than previously, because that particular house's value has dropped," Bush added.

Decreasing property values, however, will likely have a negative impact on revenue. Sanders said that because of the likely drop in revenue, the county is facing a $12,271,219 budget shortfall next year.

The county is required to maintain a certain balance in it bank account, which cannot be spent, and it is called the "End of Year Retained Earnings" fund, Sanders said.

"Our goal is that we have to maintain 25 percent of our annual expenditures in [the] fund balance," he said. "That enables us to maintain our bond rating in the financial markets. If we don't maintain that rating, it literally costs us hundreds of thousands of dollars in extra interest."

County employees across the board will also be furloughed, said Sanders. Furloughing employees for five days will save $1,436,054 in salaries, he said. Furloughing them for 10 days will save $2,872,107.

The county currently provides businesses free annual fire-inspection services through the Henry County Fire Department. Bush said that, if the county began charging a $50 fee per inspection, $400,000 in new revenue could be generated for next year's budget.

"The fees are [only] options being explored by the Board of Commissioners," Sanders added. Another cost-cutting alternative would involve taking advantage of a credit available to the county, which would reduce expenditures on employee retirement benefits by $2 million, said Sanders. Currently, the plan is overfunded, he said.

"We've paid in more than we had to, at this point," added Bush.

Also, County Department of Transportation salaries, and expenditures on county-wide paving projects, would be removed from the 2011 budget, and replaced with dollar-savings realized from previous Special Local Option Sales Tax (SPLOST) projects, which cost less than anticipated, said Sanders. The total amount of those two items removed from next year's budget would amount to a $4,463,553 reduction in expenditures, he said.

Other measures under consideration include: A 15-percent reduction in payments to Helping In His Name Ministries Food Pantry, A Friend's House, Hands of Hope Clinic, Community Gardens, the Flint Circuit Council on Family Violence, and Prevent Child Abuse, said Sanders. The county may decide to eliminate funding for the Southern Crescent Sexual Assault program, he said.