Brown County government is expected to bring in 7 percent less revenue from income and property taxes in 2022 when compared to 2021, according to projections from the state.
At the start of budget request hearings last week, the Brown County Council was tasked with cutting more than $1.5 million from next year’s budget.
By the end of the week, the council had made cuts to requests from the clerk’s budget, commissioners’ budget and the sheriff’s department pension plan, with plans to look at making other cost-saving changes to the county’s health insurance plan.
A possible reduction in force — eliminating jobs in county government — is also on the table.
Each department head presented their 2022 budget to the council for review on Aug. 17, 18 and 19. Redding estimated that the numerous adjustments to those requests did not total more than $20,000.
The council also redid the clerk’s budget for next year “on the fly” during the review, council President Dave Redding said. During that review, a job was eliminated in the clerk’s office due to court records being automatically digitized now, resulting in work being split between the clerk and court offices. Revamping that budget and eliminating that job resulted in a savings of around $67,000, Redding said.
Redding intends to work with human resources to see if that employee could be moved to another department.
“I am not at all advocating that we put people out on the street. That is not what we’re trying to do. We are trying to right-size the government,” he said.
Around $33,000 was cut from the sheriff’s department retirement plan. The contributions were reduced from an accelerated funding amount of $396,962 to a recommendation of $359,154. A small group of experts will then work with Sheriff Scott Southerland to determine the best and optimal plan or if a new option is needed.
Southerland had been contributing to the pension fund at the accelerated funding rate because the fund had not been funded properly in the past and he wants it to be “more of a sound, stable plan,” he told the council in July.
Any changes to the current pension plan will be approved by the council.
Benefit changes?
More than $100,000 was reduced from various lines in the commissioners’ budget.
The commissioners and council are also working together to cut health coverage and reinsurance expenses, as they continue to grow each year, resulting in more money being moved from the county’s rainy day fund and unappropriated funds. That fund is now well below $100,000. In July, the fund had $69,921.39 in it.
Apex Benefits has been helping the county come up with strategies to build up reserves and find ways to fund health insurance. Those changes have resulted in nearly $160,000 in savings, said Human Resources Coordinator Melissa Stinson.
The commissioners voted in the fall of 2019 to provide memberships to Brown County Schools’ health clinic at Eagle Park to county employees as part of their benefits package, but county employees need to use that clinic more to make that agreement feasible, Redding said.
“Cutting the clinic next year is not off the board, so we need to start using it or lose it,” Stinson said at the Aug. 18 commissioners meeting.
Stinson explained some of the changes coming to the county’s health insurance plan, including discontinuing employee health savings accounts, increasing co-pays and employee contributions, and offering discounts for non-nicotine users — “lots of changes, lots of things going on, not as a penalty to the employees, but a way we can hold onto our insurance,” Stinson said.
“What we can budget for and what we pay for are two different things. We have reduced our rainy day fund and all of our extra funds to the point of very critical amounts. We have to really seriously look at where we’re at and what we’re doing in the county as a whole.”
Commissioner Diana Biddle reiterated that the commissioners are “looking at every option” on the table to help cut costs. “We’ll make those cuts if we have to make them,” she said.
Brown County Schools went through a similar overhaul of its health insurance plan a few years ago. In 2016, the district went with a different insurance provider and opened the health clinic at Eagle Park. Those changes took the district from a $700,000 deficit in the self-insurance fund to a $1.4 million cash balance earlier this year. Because of switching insurance companies, school employees also have not seen a health insurance premium increase in two years.
Changes to the health insurance plan will be discussed more at the commissioners meeting on Sept. 1 including the impacts the changes will have on the bottom line.
Changes are also coming to the county’s PERF plan, with all new employees coming in Jan. 1 receiving a 4 percent employer contribution to their plan instead of the previous 11.2 percent. Also, employees will be vested after five years instead of 10, and elected officials will be vested after four years.
“It helps retention because we have a lot of younger people who come in who may not choose to stay here longer than five years,” Stinson said.
Commissioners President Jerry Pittman said the county has to “live within our budget and our means.”
“We’re not the federal government. We cannot just spend money as much as we want and go into debt for it,” he said.
“We don’t want to raise taxes, so we have to bring expenses into line with what is coming in and live within our means. This will be painful for some people, but it is a necessary adjustment that must be made.”
As of July, the county had spent $1.4 million on health insurance, not including pharmaceutical reimbursements, which could bring that cost down to around $1.3 million, Stinson explained.
That amount does not include what the employees pay into the program, which will bring the cost lower.
Reducing employees?
Also similar to the school district, the county is looking into the possibility of a workforce reduction program as another way to cut costs.
“I’m optimistic that we’ll see the needed reductions and cost avoidance required with the health plan changes and improvements. The workforce reduction program is also expected to yield reductions that will also help with future years, given our intent to put in place a ‘hiring freeze,’” Redding said in an email to The Democrat last week.
“The hard work our school corporation did is serving as an excellent model for the county to make sound, proven changes that will reduce costs.”
If an employee leaves a job, Redding said he has insisted there be a hiring freeze for that position and the department head should come back to the council to determine if that job will be fulfilled again or if it can be covered by an employee in another office.
Redding said it will be important to see what will roll over from the remaining 2021 budget at the end of this year and that will help to determine how much more has to be cut, along with seeing how changes to benefit plans pan out.
Pay raises?
All department budget requests included 3-percent pay raises for employees. Those are still on the table even as cuts are being discussed.
“It is important that we stay up with wage inflation and keep our pay in/near other local or nearby alternatives,” Redding said.
“Our employees are facing the same inflationary pressures we all see with our daily purchases of food, energy and general living expenses. We are protecting our direction to provide the pay raises, and any adjustments to pay raises will be made only if required for us to meet a budget submission DLGF (Department of Local Government Financing) will approve for 2022.”
Redding said the raises would also help employees deal with higher health insurance costs.
“I think my goal is to continue to do analysis of what same position is earning in neighboring counties, just like we did with sheriff’s office,” Redding said.
Next year’s budget will include a new salary structure for deputies. It is based upon a percentage of the prosecutor’s and judge’s salaries. The council will have to find around $120,000 in the budget each year to increase deputies’ pay.
The Brown County Sheriff’s Department has lost seven deputies in the past six years, with most going to nearby departments that pay more, like Johnson County. The new pay structure brings deputy pay here in Brown County closer to nearby counties.
More cuts are expected to come to the budget this month when the county council meets to formally vote and pass the 2022 budget submission to the DLGF.
