GC deficit to run $2M in 2007

Increasing revenues not able to keep up with rising expenses, commissioners said

The numbers are in the red, the reserves are running low, and the deficit hitting Grant County is expected to pass the $2-million mark by 2007.

Yes, as LeRoy Allison, chairman of Grant County Commissioners put it, the financial situation in the county is fairly serious.

"We have taken some hits," he said.

A look back at budgets starting with the year 1999 shows that Grant County went from a $500,000-plus surplus to being $851,000 in the red last year, Allison said.

Up until 2000, he said, the county had found itself with a surplus of between $500,000 to $600,000. However, in 2001, revenues were lower than expected and expenditures larger than expected, resulting in a $600,000 deficit.

Ever since then, the county reserves have been used in order to balance annual budgets. This was especially true in 2003, where nearly $1 million from the reserves were used.

Allison praised county authorities, saying that department heads and commissioners "had had the foresight" to put a few dollars away in reserve.

This year, about $1.5 million of the law and justice reserve budget have been used to help out with the 2004 budget, Allison said.

Although he noted that it was a good thing that visionary planning had allowed the county to save, and hence pay its 2004 bills, Allison pointed out that the reserves are now on empty.

"There isn't anything left on the law and justice reserves," he said. "We have got to figure out how to increase revenue and lessen expenses."

Projections and forecasts show the revenues increasing steadily through 2007, he said, adding that there will not be and there has not been an overall revenue shortfall. However, expenditures will rise, as well, with the revenue increase not being enough to equal the expenditures. This disparity, he said, would bring the deficit past the $2-million mark.

Commissioner Tim Snead said medical insurance increases were mostly to blame for the financial dire straits of the county. The issues facing the county's public defenders were a factor, as well.

Allison said that there were a number of ways to address the gap between expenditures and revenues.

Regarding the latter he suggested dealing with the sale of holdings and property tax revenues, among other issues. Regarding expenses he mentioned dealing with wages and benefits, going as far as implementing "employee changes," and hiring freezes, which Allison said had been in place since June. Salary and benefits make up 80 percent of the county's budget.

Snead said that wage increases had been frozen as well, reduced only to cost-of-living adjustments, known as COLAs. The loss of hundreds of thousands of dollars thanks to Initiative 695 was a partial culprit as well.

"Take that out of any expense," he said, "and it catches up to you."

Another move, Allison said, could be to prioritize programs and activities.

"When you look at a program," he told department heads, "ask yourself, 'why are we doing it.'"

Allison said that if the answer was because the Revised Code of Washington tells them to, department leaders had to take it one step further and look not at what the rules said, but at what the outcome of the program was, and then, figure out the most effective way to reach that outcome.

The list of activities also received a second look during Wednesday's meeting. Allison said that the product, service, or result delivered by that activity should be revised, as well as the steps in order to complete it.

"You have to identify potential changes to increase effectiveness," he said, adding that further meetings between the commissioners and the departments would help fight the deficit. The next meeting is tentatively scheduled for August 11, at 2:30 p.m. at the Commissioners' Hearing Room in Ephrata.

Department heads received with differing views the news of the commissioner's plan.

County clerk Kenneth Kunes said the hiring freeze was penalizing his department.

"I have one position frozen already," he said. "If the prosecuting attorney's department is at full staff, and they send work to the clerk's office and the clerk is a person short, you are penalizing the clerks department."

Kunes suggested going back to square one and looking at the 2004 budget, which he said had allotted money for a hire in his department, from January on.

Laure Grammer, the county's assessor said that meetings such as this one, allowing department heads and county commissioners to plan out a way to deal with the financial troubles, was what the leaders of the different areas had been asking for for a couple of years.

These meetings, she said, allowed them to work together and share ideas. She added that the news of the budget deficit came as no surprise.

"We should have perhaps reduced expenses in 2001," she said. Nonetheless, she praised the idea of a series of meetings as a great start to solve the problem.

"If they can pull it off," she said.

The financial picture is not pretty, and both Snead and Allison said it was a bit scary to think of the financial troubles the county is in. Still, some degree of optimism remains.

"It scares us, but addressing the problems early is the most appropriate way of doing it," Allison said.