County Auditor Tom Slockett and Deputy Auditor Julie Bartholomew: Fiscal Year 2002 Budget

Discussion: Proposed Fiscal Year 2002 Budget

Chairperson Lehman called the Johnson County Board of Supervisors to order in the Johnson County Administration Building at 1:07 p.m. Members present were: Pat Harney, Mike Lehman, and Sally Stutsman; absent: Terrence Neuzil and Carol Thompson.

County Auditor Tom Slockett presented a graph showing the record number of early voters. Slockett said 6,043 ballots were mailed in, 5,019 voted early at the Auditor’s Office, and 10,365 voted early at satellite stations for a total of 21,427 people voting before election day which was 39% of the vote in Johnson County. He said there was more information to show the implications of that and that there is evidence that it does increase turnout by making voting convenient to people. Next, Slockett referenced a graph regarding how the Auditor responded to the number of people wanting to vote early. He said there were a record number of early satellite voting stations, 35 of them with 35 days at the sites. Slockett said that Iowa is at 61% for the voting age population nationwide. Slockett listed several states that were higher, which have on-day registration, which is a significant incentive to people. Slockett stated that Iowa’s registration deadline is 10 days before the election by State law, and to change this would take legislative action.

Thompson arrived at 1:13 p.m.

Slockett continued to say that Iowa is 8th in the nation in terms of turnout, and Johnson County had a record turnout of 53,299, with the old record being 52,732 set in 1992. Slockett said that 39% of these were early voters, which is higher than any other county in the state. He explained how early voting affects turnout in Johnson County. Slockett said the last election before they implemented early voting was the 1988 Presidential Election. He stated that if you rank the turnout, the number of voters per population, and take that percentage and rank it statewide, Johnson County was 26th in the State in 1988. Slockett said in this election Johnson County was 4th in the State. He said if you look at the other top 10 counties, they are all very small, rural counties with the highest population being 38,000, and the lowest is 6,802. Slockett said those are counties where they don’t generally have a lot of younger age voters who are the worst voting age group so that tends to make Johnson County slip because we have a high percentage of young voters in this County. He said they are also older and the older population tends to vote more. Slockett said it is remarkable that Johnson County, with the student population, is ranked 4th in the State. Slockett said the Board helped the Auditors Office with their goals last year in turnout and trying to register those areas that weren’t registered and it worked.

Next, Slockett went over the goals for Fiscal Year 2001. He said they wanted to 80% of the eligible population registered to vote and they achieved 89.4%, which is 111% of their goal. He stated that in voter participation, which is the number of voters voting compared to the number of eligible voters, their goal was 57.3% and they achieved 64.8%. He said that was 113% of their goal. Slockett stated the third goal was to have 30.5% of the votes cast be from early voting because by encouraging that, it would help the other two categories. Slockett said the early voting sites they have before the close of registration, people can register and/or vote at that location and after the close of registration, they can continue to vote. Slockett said 39% of voting was done before election day, which was a 128% of the goal. He said they did a good job of exceeding all of the goals they put forward in last years budget.

Deputy Auditor Julie Bartholomew stated that their goals for Fiscal Year 2002 remain the same, basically increasing voter registration again, however the benchmarks are based upon the 98 primary election instead of the presidential election. She said they would like to increase voter registration again, hopefully above 73%, and increase voter participation. She said for primary elections the turnout tends to be relatively small compared to the number of eligible electors. She said they hope to have over 12% of eligible electors vote. She said that they would also like to respond to the increased demand in early voting and they hope that will be over 21% of the votes cast. She stated they also have the goal of replacing voting equipment.

Bartholomew then introduced Decision Package I, which deals with new voting equipment. She said they were looking to get approximately $696,000, which is a rough estimate. They included a letter and an estimate from one particular company, and are looking at other companies as well. She said their current equipment is from 1984. The new equipment would be 64 precinct counters, 2 early voting central count systems, and 30 electronic voting terminals including some supervisor terminals. She said it would also include ballot on demand printers and the software and training. She noted that they included the fact they need to continue to accumulate funds, in addition to the $100,000, and if the Board decides not to do the full amount, that they continue to set aside $100,000 for this year. She said that they are going to be having a presentation from another company named Fiddler on February 14th and she invited any 2 supervisors to come to that. Slockett said the process would be to first look at the various types of equipment, trying to get an idea of what is available and what our interests are. He said at a later point in time they will decided which companies to send RFP’s to. Stutsman asked if there are Federal dollars available. Slockett said he is hoping they would provide funds because there is a lot of interest following the Florida situation. He said he could see where there might be resistance in supplying grants because some jurisdictions have recently updated their systems and in a way there is a fairness issue. He said if they provided low interest or zero interest loans, that would be wonderful. Slockett said the last 2 years they set aside $50,000 because they knew they would have to replace the equipment. He said last year they requested $100,000 but it wasn’t available so it was left at 50. He said if they could get a zero interest loan, they could continue saving as they’ve been planning to pay it off. Slockett stated he didn’t know of a timeline and didn’t think the legislative schedule is determined yet at the national level, but there is support from State Senator’s and Representatives. Stutsman asked if our machines quality wise would be a priority. Slockett stated there are approximately 60 counties that have central voting systems, 10 that have the precinct counts like Johnson County, a number that still have the old ABM mechanical voting machines, and there is one that still has paper ballots with no equipment at all. Johnson County’s equipment is essentially computers and they are 14 years old, so how old they are is relative to the type of technology.

Slockett explained that there is a new requirement that if a ballot has an overvote, for example if a person votes for more than one candidate for president, it is required that the machine spit the ballot out, then the voter decides if they want to re-vote it or not. He said Johnson County’s equipment can’t do this. Slockett listed alternatives to this but said the best alternative would be to get new equipment if there is any way to do it, especially since they know the current equipment is old. He stated when you have old equipment, there are certain problems one can expect; difficulty in getting parts, they don’t manufacture the equipment anymore, and some of the parts are no longer manufactured, so the parts have to be replaced with other used parts. He said they are living on borrowed time and if there is anyway possible to replace the equipment, now would be a great time. Slockett stated there are 3 main types of equipment available: the precinct counter types that Johnson County currently uses, the central count models like 60 of the counties have, and the DRE’s or the touch screen computers that allow voting. He said these would be a god-send for early voting because currently every satellite site has over 50 different ballot style in each site. He said they need to know exactly how many ballots were taken, how many were voided, how many were voted, and how many were returned back to the office. He said the electronic computers contain all the ballot styles inside them so they wouldn’t have to transport all of the ballots. He said there are many other advantages and disadvantages to each type of equipment that they will go over in a work session with the Board at a later point in time.

Thompson asked if it had to cost $696,000. Slockett stated that is a very rough estimate and it is high. He said that trying to get a cost from vendors at this point without an RFP is very difficult, they give the list price and make it clear that once they receive an RFP, it won’t be that much. Lehman asked if they would really need the equipment this budget year or not. Lehman asked, because they have 14 year old equipment, what hassles and breakdowns they had, if they were short equipment, and if they could get another year or two out of it. Slockett stated they could keep using it and patching it together for a number of years if they have to, but it will involve dealing with the new over-vote rule and the complications that provides. He said that having 40% of the votes be early is an enormous job and the person that did it moved to another job. He said that person was working double shifts during elections to service the notebook computers and update the voter registration files. He said there is a lot of work people don’t think about, not only counting all the ballots and opening and closing the precincts, but each computer has to be updated at the end of each day with the people who have voted on that day so that a person can’t vote twice the next day. He said there is a huge amount of effort and his office is really pressed, the whole office has to chip in spite of the fact that they are hiring a lot of temporary people just to keep up with the workload. He said they really need some way to deal with the satellite voting and early voting. He stated the new technology has huge advantages in that respect also. Slockett stated he was not going to mislead them that it would fall apart and they would have an emergency, although it could happen and they should be aware of that. He said one of the things they have found is that weather conditions affect the machines, especially hot weather. He said if they had a special election in July, he would be pretty nervous. He said if the worst thing that happened, in that they all broke down at once, with the paper ballot system, the ballots are still put in the machines and they are still secure. He said they might be slow in getting out the results, but they would eventually come out. He said that people lose confidence if they can’t read the results of their counties election in the next day’s newspaper, and it would be a shame to put that at risk. He said in an emergency, they might have to risk doing that and he understood that. Lehman complimented Slockett on the early voting, and spreading out the machines and not needing them all in one day. He said that also creates other problems though in personnel and maintaining people and machines longer.

Slockett stated that an example of what can and did happen in this presidential election. He said that in the absentee precinct, they had 5 counters and one of the counters spit out bogus totals. He said they still haven’t determined why yet, but they knew which machine it was and luckily they could figure it out. He stated they had the absentee board meet again before the canvas and they fed all the ballots through. He stated it was over 5,000 ballots for a 21,000 total and the count came out just fine. Slockett stated the machine tested out all right and they still have the programming pack that was used and it was the same program used in the other ones. He stated they were going to check that out to see if something went wrong with that because it is old too. He said there are also a lot of little problems which didn’t happen before, but are happening now that are warning signs. He said there is an increased amount of maintenance on the equipment and it’s not very reassuring when you talk to suppliers and they say it is 14 years old. He stated if something terrible went wrong, that’s one of the responses you get when you ask why the equipment doesn’t work like it’s supposed to. He said those are the kind of risks that are involved in keeping the machines going. Lehman asked about last year when Slockett came in to buy used equipment. Slockett stated they bought 10 used machines for $500 each, which was a bargain. He said that was because they were having more breakdowns and they felt they needed more replacement equipment. He said when something breaks down at the precinct, they need something ready to go to change it out. He said that has worked out pretty well. He said that was a very inexpensive way to stretch the life on the system. Slockett stated that a nearby large county has purchased 3 sets of machines during the time Johnson County has had this set. He said 14 years is a pretty long life span for that type of equipment.

Decision Package II, Bartholomew said, deals with the document management project. She said they are trying to outsource getting the voter registration forms scanned so they can retrieve the information more quickly, and they can also start scanning as the new forms come in. The Technology Committee has included this as part of the technology budget. Slockett stated it was really scary to think what would happen if they had a fire. He said they would have computer back up but a lot of the files, like the old voter registrations where you look up manual records, would be lost. He stated the manual files are still on record. He said misfiling can also occur. He said that if they misfile a social security number in a system that large you might as well just wad it up and throw it in the waste basket. He said the chances of ever finding it again when you want to are very small. He said if you had an electronic system so that once it came in you scanned it and fed it into the computer, then you could file them as they came in and take them off to inexpensive storage. He stated the electronic file can always be searched and found by various fields. He said it would be a much more secure way. He said they have had instances of not being able to find registrations and it has probably been due to misfiling. Lehman wondered if that created any revenue by selling voter registration lists. Bartholomew stated this would make it easier to research special ballots right after the election.

Decision Package III is that they would like to pay pollworkers time and a half for a day worked over 8 hours to keep in line with Auditor’s Office staff. She stated they would like to honor the poll workers the same way because it is a long day, it is usually 15 to 16 hours. Slockett stated that $12,000 amount would cover 3 elections: a school election, a city election, and a primary election. Slockett stated in the school and city cases, they would reimburse them the cost so it wouldn’t necessarily be a cost entirely to the County. Stutsman asked if people were complaining about having to work. Slockett stated it was a long day and they’re always going to complain even if they’re paid overtime. He said they do have some trouble getting enough poll workers and it’s also a fairness issue and it seems like they deserve this. He said a lot are retired folks and they are working the long hours. Stutsman stated she could also say they are paying the taxes too. She had heard some retired folks say they consider it community service and they are not so much interested in the compensation. Slockett stated they would still be making $8.00 an hour, but they would get paid time and a half over the 8 hours worked. Lehman wondered if they gave a raise recently. Bartholomew said a couple years ago they got a 50 cent raise. Bartholomew stated the next issue was for the part time staff when they call in clerks and technicians. They would like to increase the rate of pay from $8.50 to $9.00 an hour. Slockett said they advertise repeatedly and have difficulty in getting people so they resort in appealing to friends and neighbors. He said that was all right, but you feel like sometimes you might not find someone. Bartholomew said they have an ongoing expense where they are putting money towards a replacement copy machine. She said they do $500 from elections and $500 from the accounting department. Bartholomew hoped they would purchase the replacement in FY06.

Next, Bartholomew covered the expense worksheets. She noted that they did not include any special elections. She said they do not budget for the city primary election because they don’t know if they’re going to have it. She said they are just looking at the budgeted expenses and revenues that are planned. Slockett stated in the past the actual numbers are higher in expenditures and revenues, and that’s because elections come up every year that you don’t know about at budget time. He stated the Board has always wanted to just amend the budget for those. He said most of the time they are expenses paid by whatever jurisdiction called the election. Bartholomew then covered revenues. She said they are having a city and school election so they will be reimbursed some costs for those. Bartholomew said they are going to have ongoing expenses for their current voting equipment for the software and machine agreements.

Lehman asked if they had put money aside before towards voting equipment. Slockett replied that for the last 2 years, they had put $50,000 per year aside. Lehman said that they then had $100,000 of the $696,000 requested. Stutsman asked if it made sense to do a little bit at a time, to allocate $300,000? Slockett said that this was a great question, and that it did make sense but said that the problem was that with an election system, if you mix systems, then you have 2 ballots to generate, and 2 systems to program. Slockett said that if financing isn’t available for the whole package, they should think about getting the touch screens for early voting, because that would cut down on the counting and filing workload in the office. Stutsman said the downside to Bartholomew and Slockett being good at their jobs is people expect almost instantaneous results.

Deputy Auditor Joe Elder explained that all departments had submitted their budgets, and now the process was up to the Board to decide what they were going to approve for next year’s expenditures. Elder said, currently, FY02’s tentative budget just includes last year’s base budget. Elder explained that it also includes payroll adjustments for the current employees, and additional requests above last year’s budget that are not in a decision package. Thompson asked if the current year’s certified budget included the budget amendments that the Board had just put in. Elder said that the requested budget was higher, including the tentative budget plus all of the decision packages. Lehman said that this was only a summary of the initial requests. Stutsman said her only concern in talking about this was Neuzil’s absence, and said that she hoped they would sit down with him and explain it. Stutsman said that this was important information, and said she was not interested in going through it again for one Board member. Next, Elder went over expenditures. He pointed out that the expenditures in the certified budget for FY 01 were $40,385,209, and the tentative budget for FY 02 is $41,726,385, and the requested budget is $44,221,939. Elder pointed out that there was about a 4 million dollar difference between what they approved last year and what’s requested for this year.

Elder detailed the payroll adjustments included in the tentative budget. He said that what is in the budget now are the step increases for all eligible employees. Only elected officials and deputies are not eligible for those, so they are not included. Elder said that the merit increases set by the Board, the $40,000 lump sum, is included with the Central Services, Department 18 budget. He said that cost of living increases are included for 4 of the 6 bargaining units, noting that there were still 2 unsettled. Elder said that the 4 that are settled were settled at 3.5%, which is included in FY 02’s figures. Also, Elder said, the requested cost of living increase for the Conservation Department is in, estimated at 3%. Elder said they had also estimated a 2% cost of living increase for everything that’s undecided right now, including the 2 bargaining units that are not settled, the Administrative Group and Secondary Roads Group, and also includes elected officials and deputies, management and non-management employees. Stutsman said this was good, and that they had done this in previous years as well. Elder continued that a 1% increase or decrease would cost $95,907. Elder said for the health insurance premium increase they do not have an estimate, but are working on trying to get it. Elder said that from what he had heard, it was supposed to be a significant increase. Thompson said that to keep it in mind, 25% would be $380,000 per year. Slockett asked the Board if they wanted them to put that in, and Stutsman said they might as well. Stutsman said she would feel better having it in there rather than getting a big surprise at the end. Slockett said he agreed, and Lehman said it was more realistic to have a ballpark figure in there, rather than zero.

Elder went on the next section, General Supplemental transfer to General Basic. He said that the General Basic tax levy is limited to the $3.50, and said that they can’t levy more taxes in the General Basic than that. Elder said that the General Supplemental Fund allows them to raise more taxes beyond that $3.50. He said that basically they have to transfer from General Supplemental to General Basic to pay for those things. Horne asked why some of the things were not paid out of Supplemental directly. Slockett answered that by law they can’t levy General Supplemental unless you’re at $3.50 for General Basic. Horne said that some of the items were getting so large, year by year, that he was wondering if they couldn’t take one of them out of General Basic and put it into General Supplemental, and still reach the $3.50. Slockett said that right now, the General Basic is not at the maximum, taking out all of the General Supplemental items. Thompson asked if they were not taking out all of the things that they could take out? Slockett said that no, if they took everything they could take out, they would be below the $3.50 maximum, and then it would be illegal to levy anything in the General Supplemental fund. Slockett said that all they’re doing is levying everything in the General Basic fund and then the remaining General Supplemental necessary to bring it up to $3.50. Slockett said that the limit was the amount they could take out of General Basic and put into Genera Supplemental; that’s what takes them to the $3.50 limitation. Slockett said that’s how they reach the maximum, when they have levied in the General for up to $3.50, and then everything remaining is for a General Supplemental purpose. He said that the General Supplemental purchases are not limited, but the things in the General Basic are limited to $3.50. When those things reach the $3.50 ceiling, then they can’t levy any more for those purposes. Slockett said that they have worked hard identifying every single expense allowable as a Supplemental expense, and said they have found some additional ones.

Lehman said that he was having a tough time understanding the transfer, and said a flow chart would help him, as to what is allowable to move around, and what is the limitation, how much can they move over? Thompson asked why they move money into General Basic rather than moving expenses out? Slockett said that it has to do with the fact that it has to be at $3.50 in order to levy the Supplemental. He said that anything that is a Supplemental expense can be paid for out of General Basic. Slockett said that once you’ve identified all the General Basic expenses, and you’re not at $3.50, then you can pay for any Supplemental purpose that you want in the General that would take you up to the maximum. Then, Slockett said, and not until then, are you allowed to levy the Supplemental. Slockett said that’s why they do the transfer, to take it up to the $3.50. Thompson asked why they couldn’t take it up to the $3.50 with these increases that have been requested by the Department? Slockett replied that they could do this, and that this is what the $832,000 is. He said that the Board could use up $832,000 of non-Supplemental expenses in the decision packages, and that would be it, without disclosing to the public that they’re going over the levy limits.

Slockett said that he understands the Board’s question, that isn’t there some other way they can do it to allow more funds than they’re saying are available. He said that to the best of their knowledge, the answer was no, there is no other way that will increase the amount of taxes and stay within the levy limits. Lehman asked if there wasn’t some way to pay for these services the Board thinks should be funded. Slockett said they could do this, but they would have to go over the limits, and would have to disclose it. Thompson asked if the limit was $3.4 million, that they would transfer from Supplemental to Basic, why couldn’t they not transfer, leave those expenses in General Supplemental, and spend the $3.4 million on the requests that are requested in the budget. Deputy Auditor Chris Edwards replied that this really would not have any impact, one way or the other. He said that they could leave them in General Basic and transfer the money in from Supplemental, actually taxing for those items from the Supplemental levy. Or, Edwards continued, they could take all the expenses out and move them into Supplemental, and then they’ll still tax them from Supplemental, but they will have the same dollars available in General Basic whether they are in Basic or Supplemental. Slockett clarified that this was 2 different ways of doing exactly the same thing. Edwards continued that if they moved them into Supplemental, then they won’t be transferring all the money from Supplemental to Basic, so the money that’s there for all the other programs will still be the same. Thompson asked if it doesn’t rise to the $3.50 level? Slockett said that it has to rise to the $3.50 before they could levy the Supplemental. Slockett said that whatever is being levied in General Basic for Supplemental purposes, can be taken out. Thompson said right, that this was 3.4 million, or around there. Edwards said yes, you could take it out, but then you can’t transfer in the money from Supplemental. Thompson asked if they could raise taxes in General Basic up to the $3.50 limit? Edwards said yes, but leaving them in General Basic and increasing the amount they’re transferring in would allow them to accomplish the same thing. Stutsman said the bottom line was that they are still raising taxes. She said that she understood it now.

Recessed at 2:44 p.m.; reconvened at 3:08 p.m.

Elder continued by explaining the General Basic and Rural Basic transfer to Secondary Roads. He said that they get Road Use Tax from the State, and in order to get the full amount of that tax, these transfers have to fall between a minimum and a maximum. Elder said it was within the Board’s discretion to set what those figures will be. He said that what was included right now was the maximum transfer from General Basic and minimum transfer for Rural Basic. He said that right now the total is $2,595,211, which he said is fairly close to the total minimum, $2,445,259. Slockett said that was how the Board had set it last year. Thompson asked if the money could only be used for roads, and Slockett said yes. Thompson said that if the Secondary Road budget needed more, they could get it out of here. Slockett said yes.

Elder then explained the charts for General Basic transfers to Capital Projects, Capital Expenditures, and Technology. Elder said that this was confusing as to what was included right now, that there were different amounts based on different criteria. Elder said they budgeted the same amount this year as they did last year for Capital Projects. Next, Elder listed what they have in FY 02 requests. Elder showed that on pages 7-11 had details on these 3 transfers; Capital Projects, Capital Expenditures, and Technology. He said that Capital Projects was on page 9, and under the heading Requested Funding and Requested Expenditures contains only $70,543, but said they are anticipating that this is going to go up quite a bit, so they are right now including last year’s budget figure in the budget. Slockett noted that the Board could change this.

With Capital Expenditures, Elder explained that they had requested $349,000. Under Requested Funding, he said, is all the details, and that adds up to $349,000. He said that this is what is in the budget right now, under the tentative budget. Elder said that technology is a little different, on pages 7 and 8, under Technology Detail. He said that this is where it really increased, and a big part of that is the elections budget. Elder said that the new machines are in there. He said that the total requests are $1,547,000, and what’s included right now is limited only to what was approved last year, $760,000. He noted that they had not put in the entire amount of what was requested, saying that this would be at the discretion of the Board, what to fund and what not to fund. Elder said that the starting point is last year’s budget. Lehman noted that the 2 big differences between what requested funding and requested expenditures were the voting machines and the maintenance agreement. Thompson added they have to save for the payroll software, and asked if they had been already. Edwards said they have $100,000 saved for that. Thompson noted another item, that says System Upgrade, and asked what system? Horne said that was in the Sheriff’s Department.

Elder explained that the difference between the FY02 requests, and the FY02 included, is what would change on the budget worksheet. Elder said that they have included in the budget worksheet approximations of what departments have requested, and said that there was a lot of decision making to be done, especially in the Technology and Capital Projects areas. Thompson said that there were some things that didn’t make the list, including another payment due on Mall Drive. Horne said the reason this was showing up was because the departments themselves don’t make it a decision package. Thompson agreed, saying that this doesn’t come from any department. Slockett said they put it at that level because they thought that as a starting place, it might be realistic. He said that the Board could weigh these estimates against other things they might have.

Elder continued to the Revenue Expense Adjustment. He said that this was something they had started about 3-4 years ago in the Auditor’s Office. He said that generally, departments will overbudget their expenditures, and underestimate their revenues. Elder said the Auditor’s Office tries to estimate those adjustments, and that’s the Revenue Expense Adjustment. Slockett said that when all these were added up, it was a substantial amount. Elder said that the effect of this is that they would have a half-million dollars to spend in next year’s budget without raising taxes. Elder said that they have a half-million dollars from last year that they believe departments will underspend or get more revenue than budget estimates, and noted that the net effect for this year is quite positive.

Elder explained that in past Fiscal Years 94-98, there was a tax limitation on all counties. Elder said that there were 2 figures important to all counties, Allowable Growth dollars and Unusual Needs dollars. There was a worksheet the State required counties to fill out to come to those figures. Elder said that this was no longer required, that it had ended in Fiscal Year 98. He said that it was still information that they thought the Board would be interested in. Elder noted that they had changed the terms, changing Allowable Growth Dollars to New Growth Dollars and Unusual Needs Dollars to Government Price Index. Stutsman asked how the growth dollars compare to last year. Edwards said he thought it was down a little bit, but close to the same. Slockett said that another way to look at it was that New Growth Dollars is the amount you can raise taxes without increasing the taxes to an individual, because it’s the taxes raised on new construction. He said that the Government Price Index is a tax increase, the amount to keep up with the cost of inflation according to the Government Price Index. Stutsman asked if the Growth Dollars were dollars that the Board would actually see, and that the Government Price Index were not. Elder said yes, that New Growth Dollars were real dollars. Lehman said that they had the $380,000 in insurance, an item they knew was coming. Thompson added that they also knew about whatever union raise they got. Stutsman said that once they started talking about these issues, it didn’t take long for the new growth dollars to be used up.

Elder said they have $2,300,000 budgeted for their beginning fund balance on July 1, 2001. Elder said that they had re-estimated based upon what departments are submitting is $300,000 more than that, $2,687,654. He said that this was over $300,000 that they expected to have in fund balances, that they did budget for. Elder told the Board that this was like a windfall. Stutsman asked where this money came from, and wondered if it was additional revenues? Edwards said the money was from unexpended expenses and additional revenues that the adjustment did not take into account. Lehman asked if this was like the people underestimating their revenues and overestimating their expenses? Edwards said yes. Slockett said that the Revenue Expense Adjustment was based on 3 years of history, and projecting those numbers to the current time. Thompson noted that previously, Elder had said that the Revenue Expense Adjustment was a half-million dollars more this year than last, and remembered that Elder had told the Board this was money they could spend. She asked if they could spend that half a million and this $300,000 also, or was this part of the same thing? Edwards said that this was separate. Thompson asked if they had $800,000 to work with, and Edwards said yes, there was $387,000 that they expected to have by this July 1st, and the additional $500,000 would occur during next year. He said that when they projected the ending balance and the amount of spending available, those things would be taken into account. Slockett said that there were no additional funds above the $800,000, and Edwards agreed. Thompson asked if they had $500,000, $387,000, or the total of the two? Edwards said that both of those sources of revenue were already factored into the worksheet. Edwards also noted that a big part of the money for next year was for Secondary Roads, so that won’t directly decrease taxes, only affect their ending balance. Slockett said that the balances on the Board’s handout were what the Auditor’s Office recommended was needed for cash flow.

Elder also pointed out the Board that the ending fund balance in General Basic was increased $65,000, due to the additional pay period in the upcoming year. He said that in a normal year, they would have 26 pay periods, but in FY 2012 will have 27 pay periods. That’s a big expense, Elder said, so they are trying to smooth it out over several years by increasing the ending fund balance in General Basic. Elder said that this is something the Board will see on an annual basis. Thompson said this will never show up in a line item, but would just be in the fund balance? Elder and Slockett said this was correct. Slockett said they would also be re-evaluating this number, because it is obviously hard to predict what size the County will be in 10 years. Stutsman asked if they would get in trouble with the Legislature when they looked at those high fund balances? Slockett said that that they had added a line for reserve fund balance, so the Legislature will be able to look at this. Thompson said it was like if a Board of Directors sets a restricted fund or something, set aside for a specific purpose. Stutsman said that this was good planning, but noted that the Legislature looks at the bottom line. She wondered if they would look at these high fund balances and say that they needed to put a property tax freeze on these counties, without understanding that the County was planning and saving for the future. Lehman said that the labor unions would have the same issue, and he noted that the Board could say that the unions would be right; it was for their wages later on. Thompson said it was almost a million dollars for one pay period. Edwards said that they were estimating that it would be $715,000, but said this was pretty low. Thompson said that by then it would be a million. Lehman asked how the Auditor’s Office had learned about this, whether a memo had gone around or if they had figured it out on their own. Edwards said that they had talked about starting this the last time it had happened, a couple of years ago. Thompson said that last year they had had to come up with the money in 2 years, and that it had hurt them.

Lehman said that Reverend Bob Welsh had talked to him about the Heritage budget. Welsh said that he understood that this year the Budget Planning Committee was going to meet on the 26th and get the staff recommendation. He noted that they would then have things fixed in stone, and said that if the Board wanted to explain things, they might want to meet with Liz Selk before that time. Thompson said she thinks that Heritage will apply a formula based funding mechanism that gives everyone an even chance so that it is impervious to the lobbying that Welsh is suggesting.

Elder said that the Board had found the tax bill comparison helpful in previous years. He said that they were classified into 7 different categories: Ag Land, Ag Building, Agriculture Dwelling, Residential, Commercial, Industrial, and Utilities. Elder said that the numbers showed the bottom line of what the Board’s decisions are doing and how they affect these individuals and groups. Lehman asked if the Board was going to have a reprint of the handout with the $380,000 to show that impact? Horne said that he would like to have it, to give them a better picture.

Adjourned at 3:55 p.m.

Attest: Tom Slockett, Auditor

By Casie Parkins, Recording Secretary