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Looking at Westmoreland County's 2001 Budget
Posted 09-25-2000
It is September, and we have started the process of shaping Westmoreland
County’s budget for the year 2001. The process is slow and takes a
considerable amount of time and analysis by our Financial Administration
staff. Eventually, it will take intestinal fortitude by the Commissioners to
make the reductions that will cause our budget to be as bare-boned as
possible.
We’ve sent out letters to
each county department and outside entity that we support with a message
that frugality is the buzzword. It will be interesting to see who gets the
message and who doesn’t. So often, and it may just be human nature, people
think messages like that are meant for others. But this year, we must make a
number of tough choices with no room for expanding the budget.
This difficult budget
exercise takes place in an environment where, with no changes at all, our
debt service payments jump up to roughly $8 million. This amount is what the
county should have been paying for the last four years, but we did a
refinancing in 1997 that gave four years of reduced payments. The result was
a sizable Fund Balance and no need to raise taxes in 1997, 1998, 1999, and
2000. The downsides were plenty. We didn’t make some of the tough choices
that we should have during the last four years. We created a balloon-like
Fund Balance that will go "poof" soon, yet gives the short-term appearance
that we are flush with money. Perhaps the worst effect will be felt by some
future Board of Commissioners because we added about $7.5 million of debt in
2019. That is why I opposed that refinancing effort and several other
subsequent refinancings that simply did not strengthen the county’s
long-term financial position.
But debt service is only a
piece of the budget challenge ahead. The payroll and associated benefit
costs are another challenge. For many years Westmoreland County, like other
governments, used adding people as a solution to virtually every problem
that occurred. However, the information age has created an opportunity to
utilize technology to improve efficiency. While we’ve carried out the first
part of the solution, investing in technology, we haven’t successfully
followed through in achieving improved efficiency to the levels that allow
for real savings. In my several years in office, I’ve recognized that we
face a challenge to get our managers and row officers to appreciate the
serious financial challenge ahead. An effective way to increase efficiency
may be for the managers and row officers to evaluate their own staffing
arrangements and develop a strategy to manage more efficiently by utilizing
technology. The alternative is for the Commissioners to develop policies to
control the payroll from a more global perspective. Individual offices
understand their needs better than we do and they should be better equipped
to identify a course of action. But they must all buy into our need for
stronger fiscal restraint.
We have started to more
effectively control the cost of health benefits. By switching our
non-bargaining employees to two other health insurance carriers, we are
saving several hundred thousand dollars over the old arrangement that we had
with a single carrier. By infusing competition, it has also motivated our
largest carrier to become more responsive and look at other cost-effective
alternatives for the employees that they continue to cover.
Shaping the 2001 budget will
be a more difficult exercise than our effort earlier this year when we
re-opened the 2000 budget and made considerable cuts. Each effort leaves
less fat to cut. What was a projected $27 million deficit by 2003 is now
projected at about $18 million. So tougher and perhaps more unpleasant
choices must be made, but that’s what it takes each year to get the county’s
budget in the shape that it should be.
The budget process will be
difficult and painful. The Commissioners will ultimately look like the bad
guys because we make the tough decisions that were put off for many, many
years by the previous Board majority. But if we are to really make county
government operate more like a business and do the job that we were elected
to do, we must push for a more effective use of public resources. I realize
government is not exactly like a private business because we do many things
that are simply not profitable but must be done. However, the principles of
efficiency and productivity must guide us the same as it guides the private
sector. |
