Noble County finds itself in better fiscal shape
Article by Steve Garbacz of KPC Media
Financial adviser suggests Noble start building up cash reserves
ALBION — Thanks to a new public-safety income tax, Noble County’s financial position is looking a lot better than it has in recent years.
With more than $1 million in new income tax flowing in this year, the Noble County Council should be able to correct yearly deficits, put more money back into savings and cover new expenditures in the next few years.
“It puts you on a course to correct all your immediate issues, and you’re probably going to have some other revenue there to identify specifically what you want to use it for,” Jeff Peters of Peters Municipal Consulting told council members during a financial update Monday.
That’s some good news for the county, which has been overspending its budget in recent years and slowly depleting its cash savings.
The county isn’t totally out of trouble yet — employee health insurance is expected to overrun its budget again this year — but the numbers overall are looking better.
Peters highlighted a few positive things that have occurred that have helped improve the county’s standing. Growth in property taxes has picked up, and revenue from income taxes also continues to increase, he said. Those natural increases allowed Peters to forecast a little more spending than usual by the county, and the result was nearly break-even.
That projection didn’t include the revenue from the public-safety tax, which council members approved last year at a rate of 0.25 percent. The public-safety tax is expected to bring in about $1.3 million per year for the county, with cities and towns also getting funding from the tax.
“Your financial position since I was last up here has gotten better,” Peters said.
One goal the county should have in the short term is to rebuild its cash savings, Peters said. The county has about $2.5 million in the bank, but Peters suggested the county should keep about 30 percent of its budget in the bank, which would be about $4 million.
“The cash you had consumed had taken your cash balance down to a level below where it should be,” Peters said. “One short-term goal from a cash side you probably want to look at is adding another $1.5 million in cash reserves over the not-too-distant future.”
The council also briefly discussed about whether to re-establish a tax rate for the county cumulative development fund to the maximum allowable rate. That fund is split 75 percent/25 percent, with the larger portion going to the Highway Department for bridge repairs and the smaller part used by the Sheriff’s Department.
After discussion, the council opted to put off any decisions on that fund until 2018, although highway engineer Zack Smith requested the council consider taking the Sheriff’s Department’s 25 percent out of the CCD fund and pay for those expenses with the new public-safety money, so all of the revenue from the cumulative tax can go toward bridges.
Despite the comparatively good news, council President Mike Toles still wants to be cautious moving forward. It’s been nine years since the Great Recession, he noted, and the council needs to be ready for the next economic downturn, whenever it might happen.
If people are out of work, the income tax collections the county now heavily relies on will shrink.
“We need to get our reserves up. We need to have a frank and serious discussion about our public safety (income tax),” Toles said. It would be nice to say, ‘We’re bringing in X number of dollars, and let’s spend it.’ I don’t really think we have good footing yet.”