County manager Mike Ruffin's budget presentation tonight prefaced a discussion of the school board's budget request with an image of, literally, an elephant in the room -- that elephant being the outstanding item of the schools' budget increase request, the only point of dissension between county administrators and any department on this budget.
And, oh, what an elephant it is. And Tuesday night, it wasn't appearing in an empty room, either.
A standing-room only crowd turned out for the budget presentation -- many of County-funded department heads and managers appeared, providing a visible show of support from County government leaders for a budget that Ruffin calls the most challenging in his years of local government management.
We'll take here a high-level look at the County budget, a subject we'll return to in more depth in the coming days -- including, but by no means limited to, a look at the DPS-County differences on budget.
The overall picture. Although there's a nominal increase in the County budget for next year, Ruffin noted that the key driver there are passthrough payments, the social services dollars funded at the state and federal level over which the County has no job but disbursement.
And requests for public assistance like WIC, food stamps, and the like are certainly up, by an estimated $49 million next year, or 15%. Yet when these external funds are set aside, the average department budget level will decline 6.6% -- except for DPS and Durham Tech, both recommended for a 2.8% decrease.
The total budget rises just under 4% from last year, though once pass-through funds are excluded, a $22.4 million decrease (6.2%) in spending is at hand.
33 vacant positions throughout the County government would be cut, half of which fall in Public Health -- a move that Ruffin noted Public Health chief Gail Harris would speak to at next week's budget discussions, but which he said she had found a way to live with.
11.5 new FTEs would be created, most from state-funded positions in mental health for service utilization review, the remainder for the library system to support the opening of the South and Southwest branch libraries.
Ruffin noted that the process of budget cuts began by asking department heads to come forward with a 10% cut, though Ruffin added that a number of the possible cuts were rejected by the County administration as being too deep.
In fact, an NBC 17 report rehashing old debates over funding for social services and the sheriff's office drew fire from Ruffin on Tuesday for missing the point that both those departments were at what the manager described as harmony and agreement over the level of cuts.
"All of the changes I've made have been in concert with [Public Health director] Gail Harris, with Sheriff Hil, with all of our budget heads," Ruffin said.
Instead, the manager stressed, departments had reached down and found operational cuts they could live with without impacting staffing -- even to the extent that many of these department heads, Ruffin pointed out, were elected or appointed by elected officials, not serving at the manager's pleasure.
And perhaps most notable: unlike the City's budget, the County expects to see no layoffs even as the property tax rate stays flat. While some open, unfilled positions will be cut, along with longevity payments and annual pay-for-performance increases, "no one lost a job," Ruffin said.
"Benefits are not cut drastically. [Employees] didn't lose part of their 401(k) plans," he added.
Instead, Ruffin said, the County had been able to avoid what he considered three undesirable outcomes -- elimination of services, their reduction, or layoffs -- while also avoiding a fourth, tax increases that he described as harmful to seniors and the poor in Durham County.
Federal stimulus dollars and grants are one method of stemming holes in the county's budget, including Justice Department COPS grants, hoped to provide funding to maintain all currently-filled deputy positions.
Still, no pay increases are proposed for any public officials, from sheriff's deputies to the county manager. Ruffin noted that he rejected the idea of furloughs, which he described as a pay cut in disguise that would come on top of the eroded earning power that employees will see without a pay increase.
It's not over 'til Raleigh sings. While the picture looks bearable, if still bleak, there remains one major input hanging over the County government outside of Ruffin's team's control.
And that would be the actions that the General Assembly takes to close the state's own budget gap, a move that Ruffin and county budget chief Pam Meyer noted led to pain shifted to municipalities and counties in the early 2000s.
In fact, since the tax rate is fixed once approved by the county, Ruffin is recommending that the Board of County Commissioners wait until June 22 to finalize the budget and tax level, almost two weeks after a scheduled June 8 public hearing.
Ruffin noted he was hearing of the presence of "massive holes still to fill" in the General Assembly. "As we get closer to June 22, if we see that the General Assembly is in the corridors and conference rooms and are not yet clear about what they might be doing to counties" Durham might need to linger on its own tax choice.
Still, a number of hard choices may need to be made if state or federal dollar flows change. Ruffin noted that about fifty positions had been offered up as layoff candidates by departments at the 10% cut level, which he projected would be a starting point for reductions.
For instance, COPS funds are allowing only sheriff's position to be cut where retirements or vacancies were in play. "If we don't get COPS funds, then we've got a problem," Ruffin said, though adding that such funding won't be assured until the fall. Ditto the warrant control office, for which extramural funding is maintaining the county's contribution.
Ruffin added that his senior management team had been meeting for several months, reviewing some that aren't currently on the table -- but aren't ruled out in the event of external funding.
Classroom conflict. Ruffin pulled no punches, however, in criticizing the school board's decision to request an increase in funding next year, especially after superintendent Carl Harris himself proposed a $650k cut more modest than the county manager wanted, but still presenting what he called a "good faith" effort.
"In the nine years I've been here, I do not know of an instance where the superintendent and the Board of Education have been so far apart" on the budget proposal, calling it "a striking reality" that they are not yet on the same page.
"Frankly, I think before our board will be able to consider any kind of a different funding plan, which I think is unavoidable at this point," Ruffin said, the school board "has really got to go roll up its sleeves and put its best effort forward."
"And I don't think that has been done yet," he added.
Ruffin presented a range of data on per-pupil expenditures, which show Durham's general leadership among neighboring school districts (save one) and among the state's largest districts.
But look for the county manager's main argument to focus on one fact that's gotten little play from the district to date: the declining enrollment projected for Durham Public Schools.
Ruffin said that based on final enrollment, DPS was technically "overfunded" in the current year by almost $1 million.
He added that the funding decrease recommended for DPS translated back exactly to the $650k cuts offered by Carl Harris added to the giveback that Ruffin said would be warranted on a per-pupil basis based on the same formula the district had used for years to request funds for an increasing student body.
"What I'm arguing here is the money I'm taking from lower student population really isn't the death knell that it is being portrayed to be," Ruffin said.
The manager seemed pessimistic that DPS and the county administration would be able to reach any accord before next week's public hearing -- a meeting that Ruffin projected would see the vast majority of comments focused on schools.
"There's a vacuum being created by this exodus of state funds, and they're simply asking us to fill the gap," Ruffin said. "And we can't afford to do it."
Balancing the fund balance. Ruffin responded specifically to the recommendation that the County look at its fund reserves to meet the budget gap.
The manager stressed that rating agencies like Moody's, burned by the private-sector financial collapse, were scrutinizing public sector governments more than ever.
The BOCC set in place a policy a few years ago on its fund balance, a policy that led the County Commissioners to agree that if the fund balance -- currently projected at 15.33% -- dipped below 15% of appropriations, the BOCC would address the matter within that fiscal year.
A tough row to hoe, Ruffin noted, given the broader economic climate.
"A lot of people have worked hard to get that [fund balance] up over 15%," Ruffin said. "Those kind of things flow directly into how they see you as a credit risk."
In other news. A few other closing items for now on the budget--
- Ruffin expects the downtown justice center replacing the courthouse to go out to bid later this fall, noting that if the bids come in as far below expectations as the Human Services Center did, it would be hard to pass up a chance to go under construction.
- Open space/trails and farmland preservation advocates will be pleased to know that the $550k taken away in this year's spending crunch is back for next year's budget.
- Ruffin rejected a proposal from the library to eliminate service all day on Fridays and on Wednesday evenings, noting a massive increase in computer usage by patrons who may have lost their jobs or otherwise need online access.
- Although Planning and Inspections are both joint city/county departments, they're taking different approaches to help meet the budget gap. The City announced that it's projecting planning fees to be down 21%, reflecting a massive drop in development; as such, the department, jointly funded by taxes, will be reducing six total positions, two of which are filled today. Inspections, on the other hand, is funded entirely out of fees levied and expects to manage its way through the smaller (5%) downturn it's seeing.
Great summary, Kevin. I appreciate the effort you put into keeping the citizenry well informed.
I am relieved to learn that the open space and land acquisition budget is slated to be restored. Folks should realize that the multiplier effect of matching grants on this spending is often as much as 4x. By that, I mean that the county has frequently been able to get as much as 80% of a specific land acquisition paid for by external entities -- state and federal governments, foundations, and private contributors. And with development pressures a bit subsided, now is the perfect time to add to this valuable public resource.
Posted by: Toby | May 27, 2009 at 12:01 AM