HENNEPIN — Putnam County is facing a significant budget deficit for the upcoming year and during the recent Putnam County Board's Finance Committee budget meeting, it became apparent the problem won't likely be solved easily or soon.
During the previous finance meeting on Nov. 14, funding for the school's youth programs and the county's senior center, less than $10,000 combined, was eliminated, as were the county's economic rebate incentives, but not much else.
Other previous spending cuts have been a reduction in the hours of operation at the courthouse, which lowered the overall pay of the hourly employees, and a cut in material expenses.
The Nov. 19 meeting began with discussions about reductions to health insurance coverage for the county's 27 employees.
Putnam County Sheriff Kevin Doyle was in attendance and said board members were trying to put the county's financial problems "on the backs of the employees." Doyle also questioned how, at this point in the budget process, with only days to go until the deadline, the board still didn't have all its necessary financial information.
"You start messing with people's health insurance, and we'll start losing good employees, and then you'll get what you get. You're making decisions, and you don't even have all of your information. How can you come to a budget meeting without that?" Doyle said.
The sheriff also told the board to remove the $25,000 budget line item for a new vehicle for his office, saying it was his contribution and that he'd find a way to pay for the vehicle with other funds.
Bolstering Doyle's argument that the problem was being passed on to employees, the board later discussed possible wage cuts for employees. The courthouse employees present were personally asked by board members about their hourly wages, even though the board had their income information on the paperwork being reviewed.
It was said the county's total health insurance costs for the previous year was approximately $518,000, and the county currently pays 80 percent, or more than $415,000.
"Do we want to keep paying that?" Putnam County Board Chairman Steve Malavolti asked.
He estimated there would also be a 6 percent increase, or $40,000, in these costs, a figure provided by the state's Office of Central Management.
"We'll be passing along the 6 percent increase, which we haven't done in the past," he said.
Board member Sheila Haage was opposed to reducing the percentage of coverage for employees from 80 percent to 75 percent, saying it would be a burden for young families.
"We can't pull a rabbit out of a hat," board member Luke Holly said of the financial challenge.
"We've got to do something," board member Willie Holmes added.
Another suggestion the board discussed was eliminating coverage and giving employees a flat-rate stipend to be used to purchase health insurance on their own.
The board ultimately decided on a pay freeze in lieu of changing employee's health insurance.
"However, the committee will still to try to find if there are other possible solutions to offset the high cost of health insurance. We are not alone in this issue," Malavolti later said.
He said operating expenses for the courthouse had basically been cut to the bare necessities.
The board also reviewed the expenses of the county's Office of Emergency Management. Haage said the office has been spending only a small percentage of the amount budgeted for them and requested their appropriated amounts be changed to reflect that.
Small amounts do add up to larger amounts, but many of the figures discussed by the board, several hundred here and a few thousand there, weren't going to result in any substantial reduction in the county's deficit.
After almost two hours, Malavolti said the budget wouldn't be balanced and that a deficit would remain.
He said the treasurer's office was estimating $2.6 million in revenue for 2019, an increase from the $2.4 million the previous year. Malavolti also said because of the time constraint, the corporate levy for the General Fund would be increased only by the amounts allowed by statute. He said this would result in an estimated increase of revenue from roughly $553,000 to $574,000.
The board is still waiting for an estimation of the increased revenue that higher court fees and fines could provide. Zoning inspection fees will also be raised.
He said early in the meeting that last year's budget was almost $1 million "out of whack" and that there was a current deficit of more than $358,000. It was later said that number wasn't accurate and shouldn't be used because the board was still working on the new budget.
On Nov. 20, Malavolti reported the final budget deficit would be $455,963. The 2018 budget totaled approximately $4.3 million. The 2019 budget total is approximately $3.8 million.
"The committee knew going into this process the budget wouldn't be able to balanced within one year. We managed to curtail the budget to hopefully what the county's revenue will be. In the mean time, we'll only borrow what the county needs in tax anticipation loans or through other avenues available to the treasurer. Also, we'll continue to watch spending and see where the revenues are at mid-year, based on the expected revenues we budgeted from," he reported.
Putnam County Clerk Dan Kuhn has announced a special county board meeting is scheduled for 8 a.m. Wednesday, Nov. 28 at the courthouse to approve the budget appropriation ordinance for 2019.