Fully half of projected budget shortfall is due to higher salaries, more employees
Alamance County’s commissioners were walloped by some rather imposing numbers this week when they held their annual budget retreat in order to lay the foundation for the county’s next spending plan.
But the quantities that dribbled past the commissioners – often in increments of seven- and eight-figure apiece – weren’t always presented with the full detail needed to understand their significance to the county’s financials. A closer look at some of these numbers reveals them to be fairly innocuous – with little, if any, actual bearing on the county’s upcoming budget. Meanwhile, other figures prove even more noteworthy than they may have appeared when they’re examined under the microscope.
Budget driver: Salary and benefits
One case where the details really do seem to conjure the proverbial devil is the county staff’s projection of the potential increase that may be in store for the county’s next budget.
According to information presented at the retreat, the county could wind up allocating an additional $17.2 million from its general fund – or the equivalent of 6.67 cents on the property tax rate. The largest single component of this figure is a potential increase of $8,448,785 that county staff members have earmarked for “salary and benefits.”
The county’s administrators didn’t offer any elaboration for this $8.4 million hike. So, it may seem reasonable to assume that the figure represents unavoidable, inflation-induced increases or previously-approved changes that will carry over into the new fiscal year.
According to Rebecca Crawford, the county’s budget director, the “salary and benefits” line item contains some $3,623,120 in compensatory increases that date from the current financial cycle. These changes include the full impact of pay raises that the commissioners recently approved in response to a “market-based” salary study. Also rolled into this figure are a hodgepodge of reclassifications and merit-based increases that went into effect this fiscal year.
Another residual impact from this fiscal year is a $1,053,607 increase, which Crawford attributes to “new position requests that were un-funded” in the current cycle.
In addition to these budgetary holdovers, Crawford enumerated a number of potential expenses that could make an appearance in the new fiscal year. These items include $500,000 for Phase II of the aforementioned market-based pay study – the first phase of which had examined the labor market for three county departments, although its recommendations were later applied to the county’s entire workforce.
Also included in the projected increase are $2,113,584 for a staff-wide cost-of-living adjustment of 3 percent, $1,056,792 for a merit-based raise that would average 3-percent across the entire staff, and $101,682 to hire a new public information officer to handle the county government’s outreach.
This final item recently received a plug from John Paisley, Jr., the chairman of Alamance County’s commissioners, who floated the new PIO during this week’s retreat. At the end of the day-long powwow, Paisley argued that the county needs to add this position as a counterweight to the school system’s in-house public relations staff, whose output he said has unfairly maligned the county’s contribution to the school system’s maintenance needs.
Yet, the commissioners have never formally discussed this proposed post as a body, and its inclusion in next year’s budget is tentative at best – which Crawford admits is the case for much of the “salary and benefits” line item that she debuted at the retreat.
Please note, these are purely estimates at this point, as departments have not yet submitted their requests as a part of the budget process,” the county’s budget director elaborated in response to a post-retreat inquiry from The Alamance News. “We’ll have more inclusive estimates by the manager’s recommended budget presentation on May 20th.”
It, therefore, remains to be seen what the actual increase in salaries and benefits will be when the county manger unveils her recommended spending plan to the commissioners. But while the impact from these items remains unclear at the moment, there’s a great deal more certainty about another eye-catching figure that materialized at the retreat.
Amended Budget for FY23/24
One seemingly worrisome factoid that greeted the commissioners was the cumulative impact of the various mid-year adjustments that the county has made to its current annual budget.
Due to these sundry budget amendments, the $214.5 million spending plan that the commissioners enacted on July 1, 2023 had reportedly ballooned to $226.0 million by the end of the calendar year.
Yet, the $11.5 increase that occurred in the interim is really no cause for concern according to Susan Evans, the county’s finance director.
“These increases do not have an effect on next year’s budget,” Evans assured the newspaper on Wednesday, “as these increases are grant-related or designations for one-time purchases.”
A line-item breakdown of the budget amendments seems to entirely bear out the finance director’s conclusions. The vast majority of the entries in this 6-month balance sheet are, indeed, grants or pass-through funds from the state. They also include departmental revenue that has dribbled into the county’s coffers and financial transactions that had been carried over from the previous fiscal year.
In fact, there are only two significant outlays among these assorted budget amendments. One is an allocation for $747,829.84 that the commissioners authorized in November in order to pay two expert consultants to conduct an in-depth assessment of the roofs and HVAC systems owned by the county and the Alamance-Burlington school system. Meanwhile, another allocation in December disbursed $1,247,371.70 from the county’s savings to cover the unpaid balance from mold removal services that the school system incurred earlier that year. Both of these items are essentially one-offs, according to Evans, and will not reappear in the county’s next budget.