County’s 2011 deficit suddenly swells by half-mill

Whitman County’s $55 million 2011 budget took a half-million drop into the red Tuesday after corrected figures worked by Commissioner Michael Largent revealed several miscalculations.

Largent’s figures revealed a $629,146 gap between projected spending and revenues; a gap $557,233 wider than the $71,913 deficit in Auditor Eunice Coker’s preliminary budget. The deficit is in the county’s $12,297,066 current expense operating budget and accounts for more than 5.1 percent of the spending plan.

“We’re going to have to come up with some magic ideas,” Commissioner Greg Partch told his colleagues in a workshop session Tuesday afternoon.

Largent has spent the past several weeks double-checking Coker’s budget, which she submitted after compiling budget proposals from various heads of county departments.

This is the first budget compiled by Coker after she seized control of budget preparation duties in July after commissioners dissolved the county’s finance department.

In his review, Largent found nearly $500,000 in misbooked transfers between departments, unaccounted liability insurance payments and increased state audit costs.

“Those sources and those uses have to equal,” he said. “And they didn’t. Now they do.”

Commissioners must now decide how to bring spending down to match revenue in a quickly closing window of time.

The second public hearing on the budget is set for 10:30 a.m. Monday. Passage of the budget is slated for the next Monday, Dec. 27.

“We’re getting awful short on time here,” said Partch. “I don’t think we’re going to have the luxury to go line-by-line.”

Commissioners Tuesday noted county officials cut their budgets to near bare-bones spending last year to close a $604,000 deficit. Even with those efforts, commissioners had to buoy the 2010 spending by using $156,888 from the county’s treasury.

“What’s going to be different in 2011 versus 2010 as far as how much money they’re going to need to operate?” asked Commissioner Pat O’Neill.

Services will have to be prioritized, they said, noting the county must fund the courts, policing and public health programs.

O’Neill, though, worried about the political fall-out from cutting non-mandatory services like the parks department.

The treasury’s last reported balance was $2,155,794 at the end of September. September is typically the low point in the county’s budget calendar before second half property taxes are paid. Another $1.19 million sits in a restricted reserve fund that can only be tapped with official approval from commissioners.

Eating into the treasury is a $216,000 shortfall between what the county reports it has invested and what is reflected on bank statements.

The county agreed this week to contract Elias Siriani, with the Spokane accounting firm of Anderson Peretti, for $25,000 to verify the investment shortfall. Anderson Peretti has already been paid $41,282 this year to check that amount, along with helping prepare the county’s 2009 financial statement.

State auditors wrapped their review of the 2009 statement last week. Findings from that review will be published at a later date.

The county could simply take cash out of the treasury to cover next year’s $629,146 deficit, but that has not been viewed as a viable option.

Partch said he did not want the treasury to dip below $2 million. He said his 10 years experience as commissioner tell him that amount is needed to ensure the county can meet the $750,000 monthly payroll and to cover any other large expenses.

He said that happened earlier in his tenure, when reserves dropped and the county almost had to issue IOUs to employees.

“I don’t ever want to do that again,” he told the other commissioners. “I don’t ever want to worry that we’re going to make payroll.”

Largent joked the county could follow the state’s budget cutting plans and make up the deficit by raiding other local funds.

“We could do like the state and just pass it on down to our junior taxing districts,” he said.

Commissioners now plan to pore over the budget to find large spending variances between 2010 and the 2011 budgets of every department. From there, they will decide how much to cut, from which departments those cuts will come and how much of the treasury they will be willing to tap to preserve services.