Macon-Bibb County officials will be forced to make major budget adjustments to keep the county’s reserve balance from taking a $4 million hit.
Macon-Bibb financial leaders will make recommendations to the County Commission in the upcoming weeks on ways to curb spending and reap savings. The county’s reserve balance, or rainy day fund, has decreased over the past few years, and it now sits at about $8 million.
This year, a combination of increased health care costs and a change in pension contributions could lead to another $4 million deficit. This comes after a 3-mill tax increase that was projected to generate roughly $12 million in additional revenue.
One reason for the needed budget adjustments was a miscalculation of how much the county will contribute to pension plans this year, county officials said.
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The plan is to make some budget changes as soon as possible and to keep commissioners in the loop with quarterly updates.
“We want them to be aware of how things are progressing as projections change ... or even looking into the future of what we need to be aware of in the next budget,” Interim County Manager Julie Moore said.
Among the potential ways to save money are a selective hiring freeze and increasing how much employees contribute to health insurance.
Details on the hiring freeze would have to be worked out, but it would likely result in new employees being approved at the county managerial level, Moore said.
There are some positions with the Bibb County Sheriff’s Office and Macon-Bibb County Fire Department, as well as other departments, that will have to be filled. But other jobs that were already budgeted would probably get a closer look before a decision is made to hire someone, Moore said.
The County Commission has already made some changes in its health care coverage in response to medical claims in 2017, which tracked about $2 million higher than last year. But the adjustments to co-pays and prescription medicine aren’t expected to make a major dent in costs.
There could be significant savings, however, if commissioners change the amount that employees pay into health insurance.
“What the employees have been paying has been stagnant the last couple of years,” Moore said. “As health care costs rise, we’ve been picking up all of that. We’re looking at adjustments as one way to not having a deficit.”
The county is also weighing the possibility of finding a new health insurance administrator, although any savings from that likely wouldn’t be felt until the next fiscal year, which starts in July 2018.
But while county leaders have to address a potential budget shortfall this year, there is another challenge on the horizon with next year’s budget: A fund that covers some benefits for retirees could be depleted, a financial consultant informed the County Commission on Tuesday.
“You have enough pretty much to cover this year, but going forward next year that’s about $6 (million) to $8 million that you’re going to have think about including in next year’s budget,” said Matthew Arrington, president of Terminus Municipal Advisors.
The County Commission may also want to implement policies giving commissioners more input during the budgeting process, he said.
“I would not expect you to run a government based solely on what a rating agency says, but you’re on negative watch because they have said your fund balance has decreased the past two to three years, and we need to see that it’s going to be stabilized or it’s going to increase,” Arrington said Tuesday.
Moore said the county should be able to get a better track on revenues and costs moving forward, since it’s been a few years since consolidation.
“(It’s) helpful we have three full fiscal years under our belt so we can look at some trends,” she said.