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County: Where will money come from?

Money woes continue to plague Hubbard County and seem to compound by the day. They're so serious outgoing board chairman Cal Johannsen proposed a hiring freeze Wednesday. Needed: $1.3 million The bad news began early during the Board of Commissio...

Money woes continue to plague Hubbard County and seem to compound by the day.

They're so serious outgoing board chairman Cal Johannsen proposed a hiring freeze Wednesday.

Needed: $1.3 million

The bad news began early during the Board of Commissioners regular meeting. Auditor Pam Heeren told the commission it needed to cut an additional $1.3 million from its 2009 proposed budget to meet state-imposed levy limits, more than previously thought, due to uncertainty over how the state will handle certain revenue sources the county had figured into both 2008 and next year's budget.

Hubbard County needs to trim $877,000 from its 2009 general fund.

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"The next two years are not going to be business as usual," commissioner Lyle Robinson said. "How much is the state gonna cut us in 09?" he wondered. Robinson will take the commission helm in 2009 and he has been taking a hard-line approach to the county's dwindling funds while department heads increase their demands for money.

The board declined to approve its 2009 budget based on uncertainty over a predicted $5 billion state shortfall. Lawmakers have already indicated many state-funded programs to local governments will fall victim to the chopping block.

"The trouble with setting budgets now as presented, they operate on a false sense of security," Johannsen said of the county department heads. "They want to go out and purchase new equipment because it's in the budget."

Heeren said many department heads will have to re-work their 2009 budgets because revenues aren't coming in as predicted. In fact, some have fallen drastically behind earlier projections.

Tax collections lagging

One example is tax collections. Because county taxpayers are facing tough times, the county is feeling the pinch. Normally, tax collections for this time of year would be around 98 percent, Heeren said. Currently they're lagging behind that, estimated at around 91 percent. That translates to $600,000 that's not in the county coffers right now.

But that only includes tax collections through Oct. 31. More revenues will come in the last two months of the year, and the county collects the second half of its agricultural property taxes in November, so those revenues generally show up in January.

The state problems

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It's not all the taxpayers' fault, though, Heeren said.

The state owes Hubbard County $339,000 and change for market value credits.

"Market value is a portion of the tax levy the state automatically deducts from your taxes and my taxes and turns around and pays the county," Heeren said. "It's one of those things on your tax statements that says 'state-paid credits' so they just deduct it so they can tell you as a taxpayer the state pays a portion of your taxes."

The county has no say in those collections, Heeren added. "Only now they're (the state) saying, 'Gee we were gonna give it to you but we're not sure we can now.'"

Additionally, county program aid, which the state also pays counties in two installments, may not be forthcoming either, Heeren has just learned.

"We've gotten the first half payment which is $240,976 and they owe us exactly that again," Heeren said. That second payment usually arrives in late December and helps the county balance its books.

The county has figured $526,166 into its proposed 2009 budget in county program aid.

"All they're saying right now is December 26 aid payments will be delayed and a portion will be 'unallocated,'" Heeren said. "I'm not sure what that means." But it doesn't bode well for the aid the county may expect next year.

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Commissioners seemed rankled with a request that came in from a state agency for the county to replace a box culvert on a mainly recreational road over Mucky Creek. The cost would be a minimum of $63,000.

"The state thinks nothing of taking money out of our pocket every time they turn around," Robinson said in urging a "no" vote on the request. The commissioners declined to fund the culvert on the basis that "our monies are uncertain."

The good news?

Heeren said it's a blessing the county is only $1.3 million off the mark on its 2009 budget.

"Forfeits of land and solid waste are actually in the black as far as their revenues and they don't get any levy (money) so they don't count toward that," she said.

County department heads must appear at a special meeting Jan. 26, 2009, with revised budgets in hand.

"We need to draw a line in the sand that no one gets more than 4 percent," Robinson said. "And tell them, 'How are you gonna live within that 4 percent?'"

Where the pain will lie

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The department in perhaps the most critical need is social services, which is $1.4 million over its allotted 4 percent increase.

State mandated needs have skyrocketed and the department has been draining its reserve fund for years to pay for necessary programs and services.

Department head Daryl Bessler said his staff has embarked on a series of discussions to try to comply with the commission request to trim - but he has very few non-mandated areas in which to make those cuts.

His department may have to cut funding for four school social services workers who assist families and children get through the curriculum, with the aim of graduation. Two positions are in Park Rapids, one is in Nevis and one is in the Laporte school system.

Funding may also be cut for an assistant county attorney that assists with social service cases.

"With the economy the way it is..." Bessler began. "We don't know what it will be until some of these things get sorted out or until the state and federal governments eliminate some of the responsibilities that we have, providing a safety net for people."

Until then, he said, "we've got to do what the law requires."

Living under bridges

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Cuts in food stamp programs, healthcare and other public assistance programs are coming as the state endeavors to balance its own budget, Bessler promised.

"We're gonna see people living under bridges," he predicted.

"We've got a few in boxes now - at least one," commissioner Don Carlson said.

Commissioners saw the need to replace a child protection worker in Bessler's department because of increased need.

"I'm glad I was there in the morning before they passed a hiring freeze," Bessler said of his timing before the board.

No freeze was passed, but commissioners reasoned with the cost of healthcare for county employees, departments could incur some overtime by existing employees and still be money ahead.

"If you take the average contribution to health insurance we pay $645,000 more" than similar-size counties, county coordinator Jack Paul reported.

Robinson said the county should re-visit the idea of buying older employees out and replacing them with lower paid workers.

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"That doesn't work," Carlson protested.

But as the county's financial issues worsen, commissioners understand they will have to make many unpopular choices in the year ahead.

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