McCOOK, Nebraska -- The outlook for the 2010-11 budget for Red Willow County, Nebraska, improved last week when county officials discovered that $325,000 in motor vehicle taxes had been overlooked and not included in budget proposals.
"This is how I'd feel if I'd gone to Vegas and hit the jackpot," budget clerk Shirley Volz told commissioners during their weekly meeting Monday morning.
That discovery, along with a couple other changes in the proposed budget, means the county's tax levy won't go up as much as dreaded last week.
With possible changes in the county's insurance program still in the works, commissioners are estimating that the tax levy will be 39 cents -- not something close to 50 cents -- per $100 of valuation. That's still a three-cent increase over the 2009-2010 tax levy of 36 cents.
Commissioners breathed another sigh of relief when all county department heads complied with commissioners' resolution to give 40-hour/week employees a $50/month raise and 35-hour/week employees a $43.75/month raise. "Everyone (who needed to) made those changes, and that's good," said commission chairman Earl McNutt.
McNutt said Monday morning that department heads who had given larger raises made appropriate changes after commissioners said last week that raises could be rescinded altogether and/or the number of county employees could be reduced if wage increase guidelines were not followed.
A $42,232,976 increase in the county's total valuation -- from $672,790,116 in 2009-2010 to $715,023,092 in 2010-2011 -- means that tax collections will increase by $164,708.61.
Commissioners are feeling good about Red Willow County taxpayer's payment of their taxes. "Collections are on target," McNutt said Monday. "They're pretty normal ... (delinquent taxes are) nothing out of line."
The proposed budget includes $400,000 transferred from inheritance taxes -- $200,000 of that amount put into the county's self-insurance fund, $100,000 into the road/bridge fund and $100,000 into the general fund. Those figures could change if changes are made in the county's insurance program, and, of course, commissioners won't use the transfers if they're not needed.
McNutt said he doesn't like to rely on the inheritance fund to help the county's budget. "There's no guarantee of funds into the inheritance fund. You can't ask people to die to keep money coming in," McNutt said. And each year he said, the state tries to reroute counties' inheritance funds into the state budget, where it would dole a portion of it back out to counties.
According to Volz's latest projections, the proposed budget still needs to be reduced by $4,996.62 to meet the state's lid requirements, but McNutt said, "Surely we can find $5,000 in roads somewhere -- that's a pretty minimal amount."
To help the budget even further, commissioners moved the expense of buying highway asphalt millings -- purchased for $24,000 -- from the road/bridge budget asphalt line to capital outlay as a road improvement, which means the expense is figured outside the lid. "The millings are really a road improvement, which is allowed outside the lid, not normal maintenance, which falls under the lid," McNutt said. The millings will be used to improve Old Highway 6, the county road that extends west off of the City of McCook street north of the West Sale Barn and Four Winds Animal Clinic to the intersection with U.S. 6-34 at C&K Distributors west of McCook.
Other expenses outside the lid are each year's armor coating projects, the paving project south of the Perry Elevator west of McCook and $220,000 in interlocal agreements that guarantee jail bed space in neighboring counties' jail facilities.
Another proposed project that would be outside the lid is the replacement of the wooden bridge north of the former Republican Valley Junior/High School between McCook and Indianola, although commissioners can't justify doing it in this year's budget. Commissioner Steve Downer said they may be able to start the bridgework next spring/summer, and pay for it in next year's budget.
A new steel bridge is expected to cost $80,000 to $100,000, and it won't be a federal-aid project. " -- not if we want it done this decade," McNutt said, with a wry grin, explaining that there is also a huge price difference if a transportation/bridge project is done with federal money. "The last one we did that way (the bridge over Driftwood Creek southwest of McCook) cost $450,000," McNutt said.
McNutt said that the budget in 2011-2012 won't have loader or dump truck payments, and no millings. "We're halfway to a bridge right there," he said.
Because things don't look quite so dire with the 2010-2011 budget now, McNutt said they may not ask department heads to pare any more from their budgets. "If we can make 39 cents work with this valuation, maybe cash reserves and starting balances will be better next year," McNutt said.
Commissioners and budget clerk Shirley Volz all worry about inadequate cash reserves. Volz and county clerk Pauletta Gerver said state budget officials recommend cash reserves equivalent to operating expenses for February through May.
McNutt said that cash reserves have decreased as commissioners have tried to keep a tight rein on expenditures and budget and tax levy increases each year. Trying to minimize increases in expenditures in new budgets also means that there may be little left in a budget at the end of the year to become next year's starting balances.
After reworking the budget with motor vehicle taxes included, wage increases in line with commissioners' resolution and the final valuation, Volz has developed a budget that requires $2,817,920.31 in personal and real property taxes -- not the $3,329,414 that was feared last week.
Downer said, "If we can get the tax levy to 39 cents, we can make this work. We'll find some place to make small cuts. This worked out pretty well."
This may not be the worst year to increase the county's tax levy, McNutt said, as the Middle Republican Natural Resources District is not levying any property taxes for 2010-2011, but will operate with funds it collected last year as a special levy that has since been declared unconstitutional.
Commissioners tentatively plan a public hearing to approve the budget and set the final tax request for Monday, Sept. 13. McNutt told Volz, with a grin, " ... give you another week, and maybe you can work some more magic."
The final approved budget must be sent to state officials by Monday, Sept. 20.