Daviess County Fiscal Court held a work session Tuesday to discuss and make amendments to the initial draft of the 2021-22 fiscal year budget. Though commissioners ended the meeting on a positive note overall, it was noted that rising pension costs and COVID-related revenue decreases will leave Fiscal Court with a $1.4 million deficit.
County Treasurer Jim Hendrix recommended commissioners move forward with the two-part occupational tax increase by August in order to climb out of that deficit. Commissioners previously voted to delay the tax increase because of the pandemic.
“My recommendation is to make sure that’s what you want to do, because [delaying the tax increase] is a big deal to the payroll companies,” Hendrix said. “They raised the rates and they had to make reimbursements. I’ve received a number of calls from both employees and processors. The initial reasons you approved [the tax increase] still exist.”
Over the last year, the currently adopted taxes were held constant, Hendrix said, with the exception of the occupational tax, which was originally supposed to increase from .70% to 1% on Jan. 1, 2021. That got pushed to 2022.
The county’s total budget of $78 million will include $10 million in reserves that should remain constant, Hendrix noted.
As was predicted, retirement costs increased by 12% across the board, Hendrix added.
Daviess County Judge-Executive Al Mattingly asked Hendrix if that 12% increase would be finite, to which Hendrix said, “it was proposed to be a four-and-a-half year timeframe. But by no means is that a cap. I think it will be evaluated annually, and rates adjusted accordingly.”
Several months ago, Hendrix sent commissioners an email informing them that state revenue was coming in lighter than budgeted. That has continued, he said.
“That will have some impact on this fiscal year,” Hendrix said. “However, our overall position is good, so there won’t be a negative position overall.”
Hendrix said the information he was getting as of Tuesday showed that revenue from the state would not improve as time goes on. He said he would make recommendations to manage that issue.
Mattingly noted that CARES Act funding that helped local governments across the country survive the economic fallout caused by the pandemic won’t be available for the next fiscal year.
“Those one-time monies from the federal government won’t exist next time,” he said.
Parks & Recreation
The Parks & Rec budget will include a capital repair maintenance fund of $250,000.
The Daviess County Gun Club had exceeded expectations its first year. Costs for this year include $2,500 of new wireless machines and a $3,500 archery target.
Mattingly said Fiscal Court could save a substantial amount of money by buying year-old machines for the Gun Club.
As for pickleball courts at Yellow Creek Park and the Stanley area, commissioners decided to allocate $35,000 toward the project. The Pickleball Association will be asked to raise another $35,000 for the courts as well. The total cost was estimated at $75,000, including resurfacing and equipment expenditures.
Daviess County Detention Center
Because of a reduction in receipts last year, the county jail will need more money from Fiscal Court in 2021-22. Though the initial budget showed DCDC making $4 million in revenue last year, Hendrix speculated that would not happen by June 30.
“We’re not going to make $4 million,” he said. “I’m guessing we’ll lose up to half a million.”
As of March 31, the jail had only made $2.5 million. As a precautionary measure, Hendrix said he would likely allocate an additional $500,000 toward the jail’s budget using CARES Act funding.
Animal Control
Hendrix said $370,000 had been allocated toward the new county-based veterinary clinic. Hendrix said he would propose increasing that budget “either for size, parking or other things that are beginning to pop up that we didn’t have factored in.”
Mattingly said the new plan would entail a little more cash, but that those costs would provide the clinic with better operations in the long-term.
Mattingly noted $200,000 was being taken out of the Carl Henry Fund for the new vet clinic, so not all of that money would come out of the general fund.
Roads
A new excavator will cost $125,000 along with the “usual list” of dump trucks ($150,000 each), snowplow equipment and asphalting costs, Hendrix said.
Asphalting would cost $679,000 for the year, along with an additional $520,000 from the LGEA fund. Flex funds of $300,000 were estimated, along with an $80,000 bridge fund. The total would cost roughly $1.58 million. Flex funds will be made available in May.
Enterprise Funds
Typically made up of the highest amount in capital items, costs include a $328,000 excavator, a $44,000 dump trailer, a $185,000 fuel truck and a used manure spreader at $75,000. Other costs include a $66,000 transfer station renovation, along with a $171,000 rolloff replacement. The total will come to $913,000.
Agency Funding
The total budget for county agencies will total $949,368, with $50,000 of that going toward a pilot training program. Though Fiscal Court allocated $50,000 last year, Commissioner Charles Castlen said Cape Air had limited the number of trainees they could take on because of the COVID-19 pandemic.
Mattingly said Fiscal Court would help sponsor the 2021 Owensboro Air Show for $10,000. Hendrix said that amount would be added to the Community Outreach budget.
The H.L. Neblett Community Center had requested an additional $25,000 from the county for the agency’s Western Academy.
“I think it’s a good program,” Mattingly said. “Hopefully it will bear fruit by providing leaders from our minority communities.”
General Fund
The county’s proposed budget for its general fund should total roughly $29 million.
Revenues
Property taxes returned a $200,000 increase from last year.
The insurance premium tax rate will drop from 5.9% to 5.2%.
The occupational tax increased from $3 million to $3.5 million. Hendrix said that was a projected number that would not be a one-year increase, but rather a trend he was seeing and expecting to continue rising.
The tourist tax was expected to drop from $1.38 million to $900,000, but Hendrix said the loss of revenue was actually worse than that.
“I’ve included a potential increase for some recovery,” he said. “The pandemic hit that hard, as we all know. That lower number is higher than we’re actually getting the last 12 months, so we’ll see what we’re getting.”
Transfers
A transfer between $400,000 and $500,000 will go to the jail due to decreased revenue from the previous fiscal year. That loss of revenue was primarily caused by the pandemic.
The Owensboro Convention Center will see less money transferred from the general fund, as will WKU-Owensboro. Hendrix said the annual $600,000 allocated to WKU-O over the last few years had been paid off, and that those funds will be used on the new public radio system used by first responders.
Expenses
Insurance costs will decrease substantially following Fiscal Court’s switch from paying its own health insurance to joining the state’s health insurance program.
“The state plan has stabilized our costs and has held it pretty steady the last two years,” Mattingly said.
Hendrix proposed budgeting $300,000 for the county’s previous insurance plan, simply because he was still seeing a number of residual invoices “bleeding through.”
“I’m just waiting for the activity to stop, then most of this will go back into the general fund,” he said.
Revenue for the Greater Owensboro Economic Development Corporation will dip due to less hotel receipts causing less money to come through. Mattingly said the Daviess County Courthouse would also incur less expenses due to completed projects and landscaping that took place last fiscal year.
Daviess County Fire Department
Salary and benefits increases will make up the majority of DCFD’s increased budget. With a “big payroll,” Mattingly said retirement costs have reached $200,000 annually.
Part of the increase also stems from new vehicles being purchased.
American Medical Response (AMR) Ambulance
The county will pay its portion of $60,000 to AMR for the upcoming fiscal year. Next year, that contract will be renegotiated, Hendrix said.
Though ambulance companies normally incur expenses for slow response times, Castlen said AMR was granted a grace period of six months to one year as AMR personnel adapted to learning the geography of the entire county. Mattingly said AMR had done pretty well last year.
Costs for Owensboro-Daviess County Central Dispatch increased “slightly,” Mattingly added.
Airport
The County will allocate $150,000 toward the airport board this year, with $100,000 of that going toward operations.
Debt Services
Debt continues to decline for Fiscal Court. The biggest debt service remaining pertains to the Owensboro Convention Center. Hendrix said enough cash will have been collected by next year to service the remainder of that debt without the raised insurance premium tax being placed on county residents.
Other debt services pertaining to tourism and the jail will be paid off in full by 2028.
