On Thursday morning all three County Commissioners and six of the seven County Council members gathered in the 3rd floor meeting room of the County Building for a work session. Councilman Heath Thornton was unable to attend the meeting.
The joint meeting was called by Council President Tim Harman for the purpose of bringing new members up to date on projects the county is working, House Bill 1311 and discussing additional road funding for the County Highway Department.
Harman said House Bill 1311 is moving fast. Representative Jack Jordan has given the commissioners and county notice that it will see action February 6 through 8th.
Councilman Harman had asked Sheriff Matt Hassel to attend and comment on the jail and how the Special LIT (Local Income Tax) funds are used by his department. He said not only do LIT funds pay the jail construction bond of $1.13 million a year, but it also pays for 11 jail employees and last year paid for the study for a possible expansion of the jail at a cost of $833,000.
Hassel said they spent $1,846,820 from the Special LIT fund to also feed inmates which costs $1.14 per day and medical care for inmates. He went on to say, “On top of the $1,846,000 for daily operations, just this year the council requested $136,000 be spent out of the LIT fund that they took out of the jail property tax fund and moved to the LIT. Those additional dollars are for Wagers Over Time, Wages Part Time, Office Supplies, Janitorial Supplies and Prisoner Supplies. The sheriff said an additional $200,000 is also funded in the Special LIT fund for equipment maintenance contracts.
The Special LIT Fund does have a surplus. Harman said the cash balance of the Jail Fund is up nearly $4 million or 89.6% since 2011. He went on to say the balance increases an average of 10% a year.
Sheriff Hassel said the current jail was open in 2008 and is now 13 years old and jail operations are 24/7 365. He detailed some recent and future expenses that will need to happen and plan on are not included in the roughly $2 million of special LIT funds needed to operate the jail. In 2020 they replaced 3 roof mounted HVAC units for $212,000 and sensors and controllers for an additional $32,000. The phones were changed over to VOIP but the recording system wasn’t compatible and the new recording system was $155,000. Hassel will be requesting an additional of $25,000 next week to update the all the computers because the software for the new jail management systems, records management system and the computer aided dispatch system won’t run on the current computers. The software upgrade cost is $115,778.44 annually, but he said it will save us money down the road.
Sheriff Hassel said he is currently getting quotes to replace the video system which is at the end of its life. The estimate is $200,000 and the four dispatch councils are running on the operating system of XP and need to be upgraded. That cost is about $100,000 per council. The Intergrader system that controls all the electric door locks in the jail should have been upgraded four years ago but it hasn’t happened because the money isn’t there. He also noted the HVAC over the kitchen is the next one to be replaced and he said if the big one for the administration side goes out it will cost twice what they spent last year.
Council President Tim Harman presented commissioners, council members and the public with several pages of graphs showing the way he thinks we can fund an additional $2 million in roads without raising taxes.
Councilman Jessie Bohannon said they are going to have to come up with a long-term solution because the Special LIT will sunset in 2027. He went on to say House Bill 1311 isn’t the solution. HB1311 just takes the surplus from the Special LIT and moves it to the Jail Fund rather than the Highway Fund.
Harman said, “If the bond is paid early and the rate could be extended that would free up $1.1 million that’s not going to a bond payment anymore. So that could technically go into jail operations. They key is the tax rate would have to be extended.”
Commissioner Stan Klotz asked the sheriff, “Wouldn’t that help you if we did not wait until 2027. If we tried to keep the rate going on permanently? Free up that $1.1 million we are paying on the bond payment now and use it for operations?” Klotz said that could give the Jail $2.8 to $3 million.
Sheriff Hassel said they only way it will help the jail is to maintain the rate because the extra $2 million from the Special LIT is needed for daily operations at the jail. He said he relays on the financial experts from BakerTilly to make those decisions.
Harman looked at the cash balance or as he called it the budget surplus in the jail fund. It grows about 10% every year. In 2020 he said the surplus was $9.2 million. The tax revenue has been increasing according to Harman approximately 9% a year. He went on to say the Special LIT or ¼% is bringing in almost $3 million a year and increases on average about $130,000 yearly. The council president said the General Fund has very healthy balances. The cash balance at the end of 2020 was $9.4 million and it increases on average about $400,000 a year.
Tim Harman showed on a graph the beginning of the year with the highest balance and then it is spent down until the middle of the year when you get another tax draw. You spend it down and you get another tax draw at the end of the year. Harman said, “It’s the low point in the General Fund that provides us a very important number to look at. You have to keep a cushion because at the lowest point throughout the year you need something underneath it.” He continued, “In 2016 Todd Samuelson from Umbaugh gave a report and said in 2016 we could take $1.5 million out of the General Fund and spend it on whatever we felt necessary. That would have dropped the cushion to $2.4 million. Last year, 2020, we had a cushion of $5.4 million at the low point.” Harmon said between the high to the low point it fluctuates about $3 million each time.
Harman said, “If you pay off the bond early in 2022 what will happen? Roughly a $3 to $4 million lump sum will be left over.” He suggested putting that in Rainy Day instead of having HB 1311 moving it to the Jail fund, noting that there is more flexibility in the rainy-day fund. There would also be interest savings. Harman said, “Where else can we get the money for the $2 million? I think it’s pretty clear, it’s in the General Fund. If Umbaugh can tell us in 2016 we could spend our General Fund down to $2.4 million, we could take $2 million out of the General Fund this year and leave us with about $4.4 million.”
Commissioner Klotz said, “When we talk about $2 million for roads, all we are talking about it fixing the roads. It’s not fixing the roads, it’s an investment in this county. It’s an investment in the future of this county.” He continued, “I believe it will pay it’s self back in the long run with the tax base.”
Commissioner Mike Burroughs said, “The revenues this year were only $1.5 million over expenses. That’s why I think a million dollars we could maybe spend on roads, not $2 million.”
Harman did say our roads are getting better but they still have a ways to go.
The only way this would work is to extend the tax rate and Harman asked how that process would work. No one at the meeting knew the process but it was believed that a public hearing would need to be held in the county first.
Harman said he didn’t like Representative Jack Jordan’s bill because it doesn’t give flexibility. He suggested the county tell Rep. Jordan to table it or amend it to shift the balance to the Rainy Day Fund instead of the Jail Fund.
Commissioner Burroughs said, “The county council voted unanimously and the county commissioners voted 2 to 1 to send this bill to Jack Jordan for him to take it to the state. I stand by that vote.”
Because it was a work session there were no decisions made.
The County Council will meet next Monday, February 8th at 9 a.m. in the second floor meeting room of the County Building.