Department heads will have flexibility
By Marcy Stamper
The Okanogan County commissioners unanimously adopted a $21.7-million budget for 2018 that includes a conservative reserve fund and gives department heads the flexibility to adjust spending over the course of the year. They adopted the final budget on Dec. 26.
The commissioners had hoped to keep the budget at around $19.5 million when they started the process last summer, although they ended up with a little extra cash, said County Commissioner Andy Hover. For example, with higher overall interest rates, the county anticipates an additional $60,000 in interest income from investments, said Hover, who took the lead in the budget process.
A voter-approved sales-tax increase of 1/10 of 1 percent to pay for upgrades to the county’s juvenile justice facility will also help, by allowing the county to reallocate money previously set aside for juvenile-facility repairs. The sales-tax increase is expected to bring in $375,000 next year — a little more than half of the projected $640,000 annual receipts because taxes aren’t paid until April, said Hover.
The commissioners had to carry over a bigger chunk of the $1 million in unspent funds from 2017 for next year’s expenses than they had hoped, said Hover. “We wanted to budget on known income and then adjust it at the beginning of the year — but we were conservative,” he said.
They used $575,000 of the $1 million for operating expenses, and put the remaining $425,000 in reserve. While that provides a cushion, it’s less than the 10 percent of total budget that the state auditor recommends for a reserve fund. But $2.1 million is a daunting amount for the county, said Hover.
The county has put $300,000 in what’s called contingency reserve, which the commissioners can use for unanticipated expenses with a simple appropriation. The other $125,000 went into the current-expense reserve fund, which has a higher threshold of review — a legal notice and public hearing — before it can be spent.
Last summer, the commissioners gave all department heads a target amount based on the average of what they had spent in 2015 and 2016 and asked them to do their best to meet that number. Most asked for more money, but the Planning and Building departments either met the target or came very close, said Hover.
“Everyone’s been really good to work with. They understand that our budget’s tight this year,” said Hover, although he acknowledged that Okanogan County’s budget has been tight for years.
But before the 2008 stock-market crash — which took interest rates down with it, to a low of 0.6 percent — the county was comparatively flush. For example, a decade ago, the county was earning half a million dollars a year in interest income, said Hover. Next year, with interest rates back at 2 percent, the county expects to bring in more than $200,000.
The commissioners also did their best to anticipate actual expenses over the entire year. For example, in some previous years, the budget had allocated enough to cover only six months of overtime for the Sheriff’s Department and jail staff, even though those departments typically have regular overtime costs, said Hover. While that method allowed the county to start the year with a balanced budget, the commissioners had to allocate extra funds halfway through the year, he said.
The commissioners agreed to a one-time $30,000 allocation for Public Health to cover cross-training, since Public Health anticipates three retirements next year and needs to ensure a smooth transition, said Hover. The commissioners cut their own budget by $42,000.
The budget incorporates wage and benefit increases recently negotiated in union contracts. The contracts increase wages for jobs that were particularly underpaid compared with other counties, and there was an across-the-board cost-of-living adjustment of about 1 percent, said Hover. The cost of health-insurance benefits went up significantly this year, by $217,000.
The county was able to postpone some expenses. Some departments will save money by waiting until mid-year to fill a vacant position. The Sheriff’s Department will purchase one vehicle next year but will wait until 2019 to buy a second one, and the county will split up expenses for the flood-control fund to repair levees, spending $10,000 this year and another $10,000 in 2019, said Hover.
The final budget amount is in line with recent years, although in 2017 the county’s budget topped $23 million because the commissioners transferred $2 million from a Public Works solid-waste fund because they didn’t have enough cash on hand to cover operations at the start of the year, said Hover. The commissioners repaid more than half of that loan last year, and will pay the rest –about $360,000 annually — over the next two years, said Hover.
“There’s a balanced budget that’s just balanced on paper, and one that’s realistic, that represents expenditures that we have,” said Hover. “It’s all an educated guess on what you’re going to have next year — and what you’re going to spend.”