Mission accomplished.
Tooele County Treasurer Jeremy Walker offered some news during the county commission’s Tuesday night meeting: The county’s financial recovery goals are complete.
“The recovery has ended,” he said. “We need to continue to watch and be prudent, but the recovery is complete.”
Walker’s news came during a scheduled progress report on the county’s financial recovery plan. The county commission will also pay off the entire $4.5 million balance of internal loans from restricted funds to the Deseret Peak Complex fund at the end of this year, he said — two years earlier than anticipated.
In 2009 the county started borrowing from the fund balance of other county funds to cover expenses at Deseret Peak Complex, instead of using mitigation fees, which were kept in the county’s general fund balance to subsidize operations at the complex.
Over a four-year period, Deseret Peak amassed a total of $6.5 million owed to other county funds. The funds had to be paid back in “a reasonable time,” according to the Utah State Auditor.
Walker explained that at the end of this year the county will have $2 million that it budgeted for 2014 for the repayment of the internal loans, $1.5 million in reserve funds for unanticipated expenses in 2014 that were not spent, and $1 million in mitigation fees in excess of budgeted revenue.
“Together that makes $4.5 million, which is enough to pay off the balance of the internal loans,” he said.
After a round of layoffs and budget reductions in the fourth quarter of 2012, Walker reported to the county commission in January 2013 that the county wasn’t out of financial trouble yet.
The layoffs and reductions were made to make up for a $4 million revenue shortfall caused by a drop in mitigation fees and anticipated increase in jail fees that never materialized, he said.
Walker’s cash flow projection indicated that the county would run out of cash in May and again in October before property tax revenue arrived in December.
Commissioners laid off more staff, reorganized departments, and cut costs to bring expenses in line with anticipated revenue.
The county formed an internal budget committee consisting of the commissioners, county attorney, county auditor, and county treasurer that took on the task of developing a plan to put the county back on a positive financial track.
Walker became the face and voice of the plan as he presented it to the public in a May 2013 county commission meeting.
Walker’s quarterly power point presentations became a standard feature at county commission meetings as he updated the public on the county’s financial progress.
Key elements of the plan included a property tax increase, an increase in federal inmates at the Tooele County Detention Center, building up the county’s rainy day fund, restructuring of county departments, and the repayment of Deseret Peak Complex fund loans.
With Tuesday night’s announcement of the accelerated repayment of the loans, the final step in the plan was complete and Walker declared the recovery phase of the county’s financial trouble to be over.
“We can take the word ‘recovery’ out now,” he said. “All we need now is a financial plan.”
Walker also reported that the county’s cash balance was ahead of the forecasted upward trend.
Commission Chairman Bruce Clegg thanked Walker and the many people that helped the county turn around its financial picture.
“I want to thank our department heads, elected officials, volunteer advisory committees and employees,” he said. “They all have worked together as a team to make this possible. We had to make some tough decisions and it wasn’t easy, but it’s a great accomplishment.”
Yet despite Walker’s announcement, later in the same meeting the commissioners passed two resolutions giving public notice of the county’s intent to raise property taxes.
One resolution warned of a potential 5 percent increase in the county general levy that would increase the county’s general fund revenue by $300,100. The proposed increase will add $9.77 per year to the property tax paid by the owner of the average $170,000 residence.
The second resolution gives notice of a possible 5 percent increase in the county’s tax on property in the unincorporated areas of the county. This increase, if implemented, will raise an additional $75,000 for the county’s municipal services fund by adding $4 per year to the property tax paid by the owner of the average $170,000 home.
Clegg offered a disclaimer that neither of these proposed tax increases are a done deal.
“We are meeting with department heads working on the budget,” he said. “It is our desire that these tax increases will not be necessary.”
The timing and necessity of the two resolutions was explained by Tooele County Attorney Doug Hogan
“The legislature passed a new law last year that requires the county to notify the public at least 14 days before the general election,” he said.
While the final budget will not be approved until December, for a tax increase to be considered the county must notify the public now, even if the proposed tax increases may be discarded later, Hogan said.
The proposed tax increase will be used to pay for increased health care costs, retirement expenses, and overall inflation, according to the resolutions.
If the property tax increase is included in the 2015 budget, a public hearing will be held for the budget on Dec. 2 at 7 p.m. in room 321 of the Tooele County building.