County makes another fund loan

The Fayette County Board has continued to transfer funds to meet the county’s financial obligations, and to look at possible ways to alleviate the need to make such transfers.
While the board on Tuesday approved another loan of up to $250,000 from the county’s capital improvement fund to its general fund, numerous board members said they don’t like doing it. But, they added, there’s really no other option at this time.
“We have to get through this, we have to pay bills,” board member Jean Finley said. Then, she added, “We’re going to be out of money.”
The loan was necessary, according to board Vice Chairman Darrell Schaal, who conducted Tuesday’s meeting in the absence of Chairman Jeff Beckman, because County Treasurer Rose Hoover reported that as of the end of July, the county’s general fund had a deficit of about $105,000.
The loan is being made from the fund that was created after the county received about $5.5 million through the sale of the county’s coal rights on about 160,000 acres.
Since 2010, the county has moved more than $2 million from that fund to meet payroll and pay other expenses. Many of the moves were transfers, made prior to the board learning about two years ago that the moves must be interfund loans that have to be repaid.
Two loans totaling $625,000 in the past two years have been repaid, Schaal said.
The county has paid out $1.1 million from that fund for three loans to the Fayette County Health Department, with some of those funds already being paid back. It also used about $45,000 to purchase three squad cars for the sheriff’s office and made a $50,000 gift to the city for the extension of water and sewer lines to the South Central FS facility at the city’s western Interstate 70 interchange.
In recent years, the county has paid out more than $700,000 for a new roof for the courthouse and jail, and a new boiler for the jail.
Schaal told board members that a current financial issue for the county is that two-thirds into the current fiscal year, the county is “right at 50 percent of revenues for the year.
“We are attempting to find out why we are so far behind (in revenues),” Schaal said.
“It doesn’t change the fact that we are short money again, and, unfortunately, we have bills to pay,” he said.
“This is a major discussion” at finance committee meetings, Schaal said.
“A lot of it,” he said, can be attributed to the county’s contracts with unions that represent county employees “and what we are obligated to pay our employees.”
Schaal said that the finance committee has been looking at different options to address the county’s current financial situation, and that it ultimately decided that another fund loan “is the best option we could do right now.
“Budget discussions are coming up, and they’re going to be tough,” he said.
“Believe me, it is tough to continue to come back to ask (for more funds from the capital improvement fund),” Schaal said.
Hoover told board members that the money the county “is collecting right now in real estate taxes … is not supposed to be spent this fiscal year.
“The thing of it is, we are always going to have this continual shortfall every year, because we are borrowing from one year to pay for the prior year,” Hoover said.
Board member Wade Wilhour said that under the current conditions, the board will either have to continue making such loans “or we’ll going to have to raise taxes.”
Earlier in the meeting, Schaal said that the committee talked with department heads who are over budget at this time, including Sheriff Chris Smith.
Wilhour said that Smith has to work with a budget that includes salaries set through union contracts while also dealing with costs incurred through unfunded state mandates.
“It’s not Chris’s fault,” Wilhour said. “He just has to live with it.”
Wilhour said it will take some time to deal with the financial issues.
Schaal agreed. “It probably didn’t happen within a year, and it’s not going to go away in a year.
“It’s going to take everybody to work back out of it,” he said.
The board approved the loan in an 8-1 vote, with Wilhour casting the lone dissenting vote and explaining that he did so due to the situation that Smith faces.
Voting for the transfer were Schaal, Finley, Glenn Gurtner, Glen “Whitey” Daniels, Dean Bernhardt, John Blythe, Jake Harris and John Daniels Jr. Not present for the meeting were Beckman, Joe Kelly, Chad Austin, Keith Cole, Troy Pattillo and

Leave a Comment