As the Genesee County Manager, I am pleased to present the 2021 recommended budget. This budget will fund the County government in an efficient and responsible manner. The recommended budget stays under the NYS tax cap, while covering the lengthy number of expensive mandates of which we have little to no control.
Assembling a budget in the middle of a pandemic with uncertainties all-around has certainly been a challenge, but the staff from the Manager’s Office, Treasurer’s Office, Legislative Office, and Human Resources Department all came together to help me deliver my first recommended budget as County Manager. These core central departments were instrumental in me being able to deliver a budget that stays under the tax cap while meeting the needs of the residents of Genesee County.
There were many factors working against the County in preparing this budget and County Departments and outside agencies were instructed to once again do more with less. The recommended budget keeps funding levels flat for all of our outside agencies along with Genesee Community College. We recognize that costs are going up for our local community partners and appreciate their ability to control their budgets without requesting more from the County.
County departments were instructed to be creative and think outside the box in trying to keep their net County support impact to the same level as the 2020 budget. This was a near-impossible task for many departments when considering health insurance premiums were increasing 17.5% and retirement rates increased on average by 16%. Despite these significant increases, I was pleased to see County departments hold the line on spending, which helped greatly in delivering a budget that stays under the tax cap.
The 2021 recommended All Funds budget for Genesee County totals $142,953,227, which is $759,766 less than the 2020 adopted All Funds budget. The 2021 recommended General Fund (operating) budget is $110,241,924, which is $3,767,378 less than the 2020 adopted General Fund budget.
I am proposing a property tax levy of $31,451,727, which is an increase of $400,069 or 1.28%. For the median residential household in Genesee County with an assessed value of $106,800, this amounts to $13.32 of property taxes. The average County property tax rate in Genesee County would go down from $10.11 to $9.80 or 3.07% in the recommended budget. For the median residential household in Genesee County assessed at $106,800, that did not have an assessment change from 2020, this will result in a net tax decrease of $33.11.
The recommended budget includes usage of $2,334,857 of unappropriated fund balance, an increase of $534,822 from the 2020 adopted County budget. While the fund balance utilization is a little higher than normally recommended, it is entirely appropriate to dip a little deeper into the “rainy day” fund during the current pandemic.
The 2021 recommended budget includes an increase in funding for our roads and bridges infrastructure by $1 million. Deferred maintenance on the County’s infrastructure is getting to a critical point and the cracks are showing, as evidenced by the County getting nine red flag warnings on bridges throughout the County. A red flag warning requires the County to address a deficiency within 15 days of notification and is a serious designation for a bridge to receive. In past years the County would typically get one or two of these designations, so a 350% increase in such designations is certainly alarming. This extra $1 million is the first step in addressing the deferred maintenance of the County road and bridge infrastructure.
Overall, there weren’t significant personnel changes made with County positions, but instead a prioritization of where staff can be better utilized. The 2021 recommended budget includes the elimination of 5 full-time positions and 3 part-time positions and the creation of 3 new full-time positions and 1 part-time position. One of the new full-time positions is a much-needed dispatcher for the 911 center. As a way to minimize the impact to the budget, a part-time dispatch position was eliminated. This additional full-time presence will provide greater stability to a critical public safety service provided by the Sheriff’s Office. The new part-time position created is 100% grant-funded and will work out of the Genesee Justice Division of the Sheriff’s Office.
The remaining two full time positions are tentatively scheduled to be filled mid-year in 2021, only if the County is in the financial position to fill them. As previously noted, this County has long done more with less, but this has come at a cost, and too often service to the community has suffered or the cost savings have been too short-sighted. I am recommending the County creates a new part-time Veteran Service Officer (VSO) to assist our very dedicated full-time VSO and creates a Deputy Human Resources Director to assist our understaffed Human Resources Department. In both cases, we have department heads doing exemplary work for the citizens of Genesee County but can do more if given the necessary resources to succeed. Both of these positions are funded for just half a year and will be filled mid-year if the economic climate allows for it.
There were many challenges in putting together the 2021 County budget that all came together for what seemed like a perfect storm:
· Reductions in State Aid – due to the financial impacts of Covid-19 on the New York State budget and the uncertainty of State aid reimbursements, we were forced to budget for across the board 20% reductions in State aid among all County departments. This reduction in State aid resulted in more than $2 million in reduced revenue in the 2021 budget.
· Reductions in Sales Tax – County sales tax collections in the 2nd and 3rd quarters are lower than the same time period the year before by more than 10%. With the uncertainty of a “second wave” of Covid this fall and winter, and in working closely with the County Treasurer’s Office, we have conservatively budgeted for a sales tax figure that is approximately 7% less than the adopted 2020 budget.
Along with reduced sales tax revenue due to the pandemic, Genesee County has to contend with reduced sales tax figures from the State diverting monies away from Counties to pay for fiscally distressed hospitals along with aid to towns and villages. In the fiscal year 2021, this amounts to the State reducing County sales tax revenue by $740,881.
· Reduction in Interest Earnings – Plummeting interest rates have had a drastic effect on the County’s ability to earn a return on funds held in reserve or funds held until appropriated. In the recommended budget there is a reduction of $550,000 in budgeted interest earnings, amounting to a 78.5% reduction.
· Health Insurance Cost Increases – Rising health care costs in the County’s self-funded plan have caused a necessary 17.5% increase in plan premiums. 85% or more of that premium increase is absorbed in the various County departmental operating budgets, resulting in an overall healthcare cost increase in the 2021 recommended County budget of 10%.
· Retirement Cost Increases – The retirement rates released by the New York State Comptroller’s Office were on average 16% higher than the previous year. This translates into significant employee benefit cost increases to County departments.
· Mandates – Approximately 75% of the 2021 recommended property tax levy is made up of State-mandated expenditures to fund departments/programs such as Medicaid, Probation, the Jail, Public Defender’s Office, Assigned Counsel, Social Service programs, Mental Health, Early Intervention, 3-5 Preschool, and various others.
County Responses to Budget Challenges
With the New York State tax cap in place, which penalizes Counties with reduced State Aid for enacting an override, options to meet the budget challenges are limited. Genesee County has a long history of doing more with less, sharing wherever possible, privatizing operations, deferring needed capital improvements, modestly compensating employees, and providing virtually no post-employment benefits to staff. After years of cutting to the bone the following actions were available to close the gap for the 2021 recommended budget:
· Fund Balance Utilization – The 2021 recommended budget utilizes $534,822 more in fund balance than the 2020 adopted budget, for a total of $2,334,857.
· Raising the Tax Levy – The 2021 recommended budget raises the levy by 1.28% in 2021, below often referred to as the tax cap limit of 2.0%.
· Reducing Revenue Sharing with Towns & Villages – This decision was deliberated by the Legislature in great length. The financial landscape of the County was closely monitored over the last six months and after careful consideration, taking into consideration all of the revenues coming into the County, a figure of $10,000,000 of revenue sharing was deemed appropriate. This amount is less than originally planned but is still a significant source of revenue for local Towns and Villages.
· Line by Line Review with New Perspective – With new eyes involved in the budget process this year there were new ideas and solutions brought to the table that resulted in savings in various County departments. Besides being my first budget as the County Manager, I was accompanied by the Assistant County Manager and Executive Assistant in every budget meeting, a first for both individuals. A closer dive into the individual budget lines resulted in significant budgetary savings when aggregated. We were also able to utilize greater sharing of resources between departments to capture more state aid and reduce the net county share in several cases.
While I am pleased to present a budget that stays within the confines of the New York State Tax Cap and effectively lowers the property tax rate by $.31/1,000, I am not blind to the significant impact the proposed tax levy has on the citizens and businesses of Genesee County. My time as County Manager has just begun and I pledge to work with local governments, community not-for-profits, the business community, and local citizens on ways to spend these precious resources as efficiently as possible and ensure we are taking as little from the community as possible to meet the needs of Genesee County.
I want to give a special thanks to Vicky Muckle, Tammi Ferringer, and Scott German for helping me to prepare my first budget as County Manager. While all three provided many hours of counsel and debate on how the budget should be structured, Vicky had the pleasure of making countless revisions to the budget and as the seasoned veteran in the office, ensuring I stayed on task in delivering this balanced budget. I also want to thank the Legislature and Chairwoman Stein for their guidance and feedback during this budget season.
I now turn the budget over to the Legislature for their consideration and eventual adoption. I look forward to further discussion with both Legislators and the community at large, to ensure that the budget meets the needs of this community.