ELKIN — Faced with the prospect of an ever-tighter budget next year, the Surry County Board of Commissioners have agreed to set aside for a rainy day the $2.5 million they made through the sale of the health department’s Home Health Care division last year.
The decision came as the board met for its annual retreat at the Klondike Cabins in Elkin Friday.
Much of the day was focused on money issues and how to fund needed capital improvements at the county’s schools on the eve of budget season.
“We get caught up in the federal government’s mandates, the state can’t print money and we have to balance our budget and I don’t see how we can do it,” lamented Commissioner R.F. “Buck” Golding.
Board chair Eddie Harris noted that the county is in an impossible predicament, having to put together a budget without knowing how much money the county will receive from the state.
“We aren’t going to know what the state budget looks like until probably the middle or end of June,” he said.
Golding predicted the county is on a financial downturn.
“We have so much debt service in our budget, and I’m afraid property devaluation is just around the corner, which will mean less revenue coming in,” he said. “We’re going to have to keep our eyes two or three years down the road.”
Currently, the county’s $70.5 million annual budget is balanced with $5.2 million borrowed from the fund balance, a move the board agreed is necessary, but unwelcome.
“If we continue to dip into our fund balance on top of the debt service we owe, we’re going to be taking a hit in future years,” said Commissioner Larry Phillips.
“We’re going to have to dip into fund balance if we don’t want to raise taxes, since we have to balance the budget,” Golding said.
Last year, commissioners voted to balance the budget through using the fund balance and keep the county’s tax rate at 58.2 cents per $100.
Assistant County Manager for Budget and Finance Betty Taylor said that without the $2.5 million in revenue from the home health sale, the county would be seeing a decrease in revenue.
Taylor noted that as of Jan. 31, the county had received $51.2 million in revenue, or about 71 percent of anticipated income.
The county has spent $40.1 million so far this fiscal year, or just over half of the expected $76.8 million in expenses, Taylor said.
But the board agreed that despite the county’s belt-tightening, dark clouds are on the financial horizon.
“The squeeze is coming,” Golding said. “We have to do something about having some rainy day funds that we don’t have spent before we get it to the bank.”
To that end, the board agreed to forego any additional debt next year and place the proceeds from the home health sale in the bank.
“I don’t see a whole lot of change between where we’re going and where we’ve been,” Harris said. “If I had to pick a theme it would be ‘steady as she goes.’ This board, over the past few years, has had a policy of not taking on any more debt service and I’m inclined to stick with that policy.
“Everything we do needs, in my mind, to be done with existing revenue. In this year’s budget, we’re going to have to significantly reduce the amount of money we take from fund balance to balance the budget,” he added.
Reach Keith Strange at email@example.com or 719-1929.