At first glance, the pre-audited results reveal that Kent County recorded a slight surplus in its operating budget last year. The results show that revenues topped expenditures by $50,214 in 2011, or about half the net income the county’s general operating budget had in 2010.
“There will be adjustments,” said Stephen Duarte, county fiscal services director. “There’s no doubt about it.”
In fact, Duarte made an adjustment as he reported the budget’s fourth-quarter results last week to the county’s Finance Committee. He reminded the committee that an accounting change was made to last year’s spending plan, inserting the Capital Improvement fund into the general budget for the first time as tax revenue. So to accurately compare the 2011 results with those from 2010, Duarte explained that the CIP’s $3 million had to be subtracted from the $158.8 million in revenues the county received last year.
Removing that figure means the county didn’t have a 0.8 percent increase in total revenue for the year. Instead, Duarte said revenues were actually down by 3.3 percent in 2011 from 2010.
“I believe all the tax revenue should be shown in the general fund,” said Duarte, who noted that funds for the CIP budget come from property-tax receipts. “Next year, this won’t be a problem and it will be an apples-to-apples comparison.”
Duarte said the CIP’s $3 million also should come out of the budget’s expenditures, which totaled $158.7 million with those dollars. Removing the CIP from the budget for an honest comparison with 2010 means the county had $155.8 million in revenues and $155.7 million in expenditures last year. The general fund still showed a slight surplus for 2011.
But both those CIP-adjusted figures were down by roughly $10 million from the budget’s projection of $165.3 million in revenue and $165.4 million in expenditures. Had those numbers come in, the county would have ended the year with a deficit of $120,000.
As for revenues, property taxes came in as projected but state revenue was surprisingly higher than expected. Duarte said Lansing sent the county $7.5 million in revenue sharing last year — about $3.2 million more than it expected to receive. He said the state overestimated how much the county had left in its nearly-depleted revenue-sharing reserve account.
“We have to understand this is a one-time push,” said Duarte. “This totally depletes the fund, and we won’t be talking about this reserve fund after today.”
There was some good news on the expense side of the ledger in 2011, too. Duarte said workers wages were down last year by $2.5 million from the previous year, and the cost for employee health insurance fell by $400,000 due to some workers and employees paying higher co-pays and premiums. The county’s pension cost, though, rose by $1 million last year to $5.3 million.
Members of the Finance Committee also made two adjustments to the 2011 budget; they transferred almost $73,000 from the general fund’s unassigned balance to the Department of Human Services and Medical Examiner’s budgets.
Duarte said the county’s cash balance at the end of last year stood at $67.3 million, enough to operate for 108 days without any new revenue. A year earlier, that account had a balance of $68 million, which was good for 111 days of operations. Duarte also noted that at the end of 2010, the revenue-sharing reserve fund contained almost $4.4 million. Although it’s empty today, he said a decade or so ago the reserve balance was $49.6 million.