Macon-Bibb needs better 'pulse' on budget after third consecutive shortfall, auditor says

Macon-Bibb County’s general fund balance dipped for the third year in a row leaving officials continuing to look for ways to stem the tide.

The County Commission was presented Tuesday with the findings from an audit of the fiscal 2017 budget. Commissioners are considering changes to pension contributions and healthcare as ways to reduce expenses in future years.

The county fund balance decreased $12 million in fiscal 2017, bringing it to $7.7 million, said Miller Edwards with the accounting firm Mauldin & Jenkins.

There was also an $8 million budget shortfall in fiscal 2016.

The amount of revenue the county received in the general fund was $5.5 million less than budgeted for the fiscal year that ended June 30, according to the audit.

There needs to be better 'pulse' taken on what revenue projection are going to be moving forward, said Edwards, who described the amount it was off in fiscal 2017 as "eye opening."

"We were a little aggressive on our budgeting with revenue projects," he said. "We were a little short in what we had as goals for property taxes and sales tax and franchise taxes, as well as fines and forfeitures."

In October, county leaders adjusted the current budget after projections were trending toward a $4 million deficit, in part due to increased health care costs and a change in pension contributions.

The county also will need another $4 million in the next fiscal budget to cover “other post-employment benefits,” or OPEB fund.

And with a new change in policy, Macon-Bibb's liability for the OPEB fund will increase by tens of millions of dollars. It’s an issue many governments will be forced to deal with in the coming years, Edwards said.

“The biggest problem I see is passing this burden onto a future generation, which is already going to happen” he said.

Edwards later added, "The trick is we have to be as proactive as possible to minimize the damage 50 years from now.”

Property taxes increased 3 mills in 2017, but that revenue will be used to prevent the county from having to further dip into reserves as well as pay some increased costs with recreation and public safety, Mayor Robert Reichert said.

"If that 3-mill increase kind of brought us even, this new OPEB liability is one we had not planned for," he said. "That’s $4 million in (fiscal 2019), $8 million in (fiscal 2020) that we had not planned for."

The county's financial advisor asked officials to make a deeper dive into potential changes in pension plan contributions and healthcare during the County Commission's retreat at the end of January.

"We need to figure out what is the best way to sustain a level that you can continue to maintain," said Matthew Arrington, president of Terminus Municipal Advisors.

New sales tax

The County Commission could vote in the coming weeks on whether to ask the local state delegation to sponsor legislation related to a new 1 percent sales tax.

On Tuesday, commissioners received a "draft" of legislation outlining parameters tied to the other local option sales tax, or OLOST. If the tax is approved by legislators and the County Commission, Macon-Bibb residents would determine its fate in the November election.

Interim County Manager Judd Drake said the new tax could generate about $26 million yearly.

The tax would result in a millage rate rollback, with local officials having to determine the amount.

Also, property values would be "frozen" on residences where the owner has a homestead exemption. The value the homeowner is taxed for could not increase more than a certain amount each year.

The "draft" legislation presented Tuesday proposed a 2 percent annual cap.

Collections would start in 2019 and the millage rollback would occur in 2020.

Irma debris

The Operations and Finance Committee approved paying contractors $2.3 million for Irma debris removal.

The measure will head before the full commission next week.

Macon-Bibb could be reimbursed up to 90 percent for Irma relief efforts, but it will likely take 18-24 months before the county begins getting assistance from the Federal Emergency Management Agency, county officials have said.

Stanley Dunlap, 478-744-4623

This story was originally published January 9, 2018 at 4:59 PM with the headline "Macon-Bibb needs better 'pulse' on budget after third consecutive shortfall, auditor says."