Douglas County set to begin 2021 budget with $6 million in cash reserves despite pandemic
photo by: Chris Conde/Journal-World File Photo
Despite the ongoing coronavirus pandemic and fears it would lead to a significant economic recession, Douglas County will begin its 2021 budget with $6 million on hand, showing that it avoided dipping far into its reserve funds this year like many residents, businesses and other organizations have had to do.
The county planned to begin 2021 with $6 million in cash reserves, also known as fund balance, when it crafted its budget over the summer to help the county deal with the pandemic. County Administrator Sarah Plinsky told the Journal-World recently the county is on track to have that $6 million set aside when the 2021 budget begins on Jan. 1.
“We did that to prepare for the pandemic,” Plinsky said, noting the county now knows more about how the pandemic is affecting the local community than it did in the summer. “We’re trying to be nimble and to react to what the community needs,” she added.
Helping the situation is the fact that the county started the 2020 budget — which was crafted in the summer of 2019, well before the emergence of the pandemic — with more cash on hand than it originally budgeted. The county had expected to begin 2020 with $3 million in fund balance, but actually started with about $6.6 million, as shown in the county’s recently amended 2020 budget.
Then the county appeared to have been able to preserve many of those dollars, despite the pandemic twisting and turning the economy this year. Part of the reason the county was able to preserve much of that was because some of its total revenue and expenditures in its 2020 budget came in somewhat close to the county’s original plan, meaning it did not see a significant drop in revenue or need to cover a significant amount of unexpected spending. Thus, the county does not appear to have made any significant cuts to what it planned to spend from its general budget, its broadest and largest fund.
That’s even the case after the county re-estimated at least one of its revenue streams — the sales tax.
The county originally expected to receive $7.2 million in sales taxes in 2020, but county staff revised that estimate down to $7 million this past summer to account for the pandemic. However, the county wound up receiving more than both of those amounts. Plinsky recently told the County Commission that the county would take in at least $7.3 million in sales tax. The amended budget shows the county collecting $7.4 million.
“(That) is above our adopted budget and substantially more than our re-estimated budget. So that’s a really good sign,” Plinsky said on Nov. 4. “We’re generally very conservative in our sales tax estimates anyway, which has (turned out) well in this situation.”
While the county’s past amended budgets have seen increases in overall revenue — which is often by design to make sure the county doesn’t spend more than it brings in — there were some areas where revenue figures came in lower than expected this year.
The county received about $900,000 less from property taxes, but that is not unusual. In the 2019 amended budget, the county received $700,000 less than originally budgeted. Meanwhile, some other decreases are understandable, such as the $60,000 decrease from fairground rental fees. The fairgrounds, much like other county facilities, were closed to the public for some time in 2020 because of the pandemic.
The county saw several increases in revenue, though, including an increase in residents paying back taxes and fees and interest associated with those payments. The delinquent tax revenue increased by $175,000, while the fees and interest revenue increased by $150,000.
Other increase in revenue include:
• A $500,000 increase in Register of Deeds fees
• A $50,000 increase in zoning and building permits
• A roughly $10,000 increase in alcohol sales tax
On the spending side, the amended budget provided an increase of about $180,000 of spending in its community partners expenditure, which is funding the county provides to outside agencies to provide services. Meanwhile, many other expenditures were slightly over or on par with expected spending.
There were some drops in spending. But most were not far from the original budget, suggesting there weren’t any significant cuts to spending because of the pandemic.
Some of the decreases in spending include:
• A $210,000 decrease in spending for behavioral health projects
• A $121,000 decrease in spending for criminal justice services
The year-end budget amendment is standard practice for the county, which waits until the end of the budget’s cycle to make the changes that reflect unexpected increases or decreases in revenue that were not in the originally adopted budget. If there is an increase in revenue, the county often either spends it during the budget’s cycle or transfers it out to be moved to different fund accounts, such as its road and bridge budget fund, at a later date.
That does not mean the amended budget shows the dollars the county has spent, but rather the dollars it could spend, Plinsky said.
“If you got money you didn’t anticipate, you can capture that,” Plinsky said, referring to the county amending its budget. “This is giving us maximum authority to say that we can use some of that (revenue) … to be able to make those transfers where we want them.”
It’s unclear how much the county will transfer to other budget accounts. The County Commission will consider making those transfers in January, which is one of the final steps to closing out the cycle of that year’s budget, Plinsky said.
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