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San Juan County to rely on inter-fund loans to help balance 2011 budget
San Juan County will rely on a series of short-term loans between various departments to shore up next year's budget.
At roughly $1 million, the single-largest loan, one of four approved Nov. 16 by the County Council, would erase a lingering deficit accumulated by the Solid Waste projects and utility funds over the past two years. Those two funds ended 2008 in the hole by a combined total of $346,000, and were $826,000 in the red at the end of 2009.
According to Auditor Milene Henley, the projects fund, also known as the capital fund, has proven to be the bigger liability of the two.
The council endorsed the package of inter-fund loans based, in part, on the recommendation of the county Finance Committee. Those loans, earmarked for the Department of Emergency Management, the Capital Improvement and Road funds, and for Solid Waste as well, are intended to eliminate persistent negative year-end balances in each of those funds.
Those negative balances were not only frowned upon in the state's most recent financial audit of the county, Henley added that carrying negative balances from one year to next amounts to "poor financial management."
Though the council sided with most steps recommended by the Finance Committee, which consists of the auditor, treasurer and County Council chairman, it opted not to press the Land Bank for a $1 million loan from its stewardship fund to bail out Solid Waste. The council chose instead to tap relatively modest amounts from five separate funds in order to cobble together the $1 million.
The breakdown of revenue sources for the solid waste loan is:
— Equipment Rental & Revolving: $400,000 (Public Works)
— Public Facilities Improvement: $200,000 (2260 fund)
— Document Preservation: $200,000 (auditor)
— Mental Health Tax: $100,000 (Public Health)
— Other grants/septic loans: $100,000 (Public Health)
The package of loans will be included in the 2011 budget, which will be up for review and for comment as part of a Nov. 30 public hearing. The council may chose to adopt the budget at that time.
The 2011 budget will include roughly $100,000 in additions, also approved Nov. 16 by the council, as well as a reduction in expenses of an equal amount to offset those additions.
In a 4-2 decision, the council agreed Nov. 16 to contribute $5,000 to help reestablish the Derelict Vessel Removal Program, earmarked $26,000 to hire a part-time appraiser, and allocated $22,600 to the prosecutor attorney in order to increase hours of a chief civil deputy.
County funds targeted for loans (duration of loan)— Solid Waste: $1 million (five years)
— Roads: $500,000 (one year)
— Department of Emergency Management: $140,000 (one year)
— Capital Improvement: $100,000 (one year)
— Source: County Finance Committee