As the Clarke County Supervisors finance committee nears completion of its recommended FY2013 budget to the full Board, discussions from today’s meeting indicate that major cuts are likely as the lawmakers look at the proposed school spending plan, pay increases for employees and County software needs.
At today’s regular Board of Supervisors work session, Joint Administrative Services chief Tom Judge presented the full board with a $983K budget deficit. However, the budget deficit includes several major spending areas that the Supervisors have yet to formally address including the Clarke County Public Schools operating fund, a proposed 2% County employee salary increase, $650K for a County-wide enterprise resource planning (ERP) system and a $50K emergency management communications study.
Based on preliminary discussions today, several of the proposed expenditures appear destined for dismissal or deferral.
Supervisor David Weiss (Buckmarsh) led much of today’s budget trimming discussion focusing on the ERP expenditure, salary increases and an emergency management communications study.
In response to a request by Weiss, Tom Judge recapped the County’s financial contribution to employee benefits. Judge said that although there are some exceptions, the County generally pays 85% of employee health insurance premiums and 100% of both retirement and life insurance premiums.
Judge said that Virginia Retirement System (VRS) costs the County 12.5% of an employee’s salary but that the rate will spike to 16% in FY2013. Judge said that VRS benefit costs and other benefits account for roughly $800K – $900K of the County’s budget.
“Is the increase an additional benefit to County employees?” Judge said in response to query from Weiss. “That’s kind of a hard thing to assess. You’re sustaining a benefit that already exists – no additional benefit is being provided – so you’re merely funding the existing benefit. But it’s certainly a benefit that you’re not reducing.”
“Right” Weiss replied. “I understand that it’s not more money in people’s pockets but it could be viewed that way because we’re not taking it out. You’re not asking your employees to absorb some of the hard times – which we are in other ways – but not in this specific case.”
Weiss said “I still have my reservations” regarding a projected $281K in school salary increases and $90K in County salary increases.
Weiss also questioned a finance committee recommendation to fund an emergency management communications study as well as funding for a proposed County-wide ERP system recommended by the Joint Administrative Services committee.
“I’m not comfortable with $50K for a communications study by I think that we need to solve the problem” Weiss said.
County Administrator David Ash responded to Weiss’s concern saying that the study was necessary in order to locate a secondary transmitter site that can cover poor radio signal propagation areas in the southern end of Clarke County.
“We have 98% coverage today” Ash said. “This is an effort to solve that final 2%.”
Ash said that the study would use computer modeling to simulate radio wave propagation and predict the best site and approach to enhance the current deficiencies.
Supervisor John Staelin (Millwood) said that he believed that some grant funding may be available for the project but the County has to go through the evaluation process before funding agencies would consider providing money to the County.
Weiss suggested that if the emergency management communications study were included in the FY13 budget, the amount should be offset by reducing the Sheriff’s Department request for two new police cruisers to a single vehicle in FY2013.
“I suggest that we move the purchase of one of the cruisers out a year” Weiss said. “I don’t think that we can do the study and two cruisers in the same year.”
The JAS’s year-and-a-half long study resulting in recommendation that the County upgrade its ancient software and hardware infrastructure with a more efficient ERP software system also seemed destined to failure, at least in FY13.
“If we don’t do the ERP system, what would it cost us to do just the Treasurer’s office” Weiss asked.
JAS director Judge replied that although the Treasurer’s obsolete IBM AS-400 server had recently been replaced and $70K of money had been set aside to address software issues, Judge said that he would have a hard time recommending a piecemeal software spending approach.
“We have $70K that could be used to fix a problem with that old COBOL code if it occurred” Judge said. “But it would be like replacing the rear-end in an old car that you knew wasn’t going to last more than six more months.”
Weiss said that he had reservations about spending $650K for an ERP system when questions still exist about the County’s ability to effectively interface with other systems, including the Commonwealth of Virginia.
“Could the money be set-aside for a future purchase?” Weiss suggested.
Supervisors chairman Michael Hobert (Berryville) argued against an ERP implementation delay but appeared to be the lone voice in favor of an immediate move forward in addressing the County’s software handicaps.
“The JAS committee identified the ERP system as a critical need” Hobert said. “The JAS committee relied on two highly qualified professionals who work for us that have said it is a critical need. I understand the argument that we may be on the leading edge of technology but I’m reluctant to spend the $70K knowing that we need to do this.”
Supervisor Staelin restated previously expressed reservations in response to Hobert’s plea.
“ERP systems can be wonderful things but they are very complex and we’re a small county” Staelin said.
Staelin said that he was concerned that there was not a “critical mass” of other Virginia municipalities using ERP systems and that the current $650K estimate for purchasing and the implementing the system – the low range determined in the ERP study – might actually turn out to be closer to the study’s high end estimate, $1.5M.
“I would be hesitant to act, as small as a county as we are” Staelin said. “Most of the ERP systems are being used by towns and don’t include schools.”
“I’d favor one more year of study to get a better handle on what we need” said Weiss.
“I agree with David” said Supervisor Bev McKay (White Post). “I think that times are going to improve in the future. I also think that you have to have 100% buy-in from the County departments.”
“We have 100% buy-in from all of the County’s constitutional officers” replied Hobert.
By the end of the discussion Hobert appeared resigned to the Board’s majority opinion on the ERP decision. “I think that we have an understanding of where the Board is on this” Hobert said concluding the discussion. “We need to decide if some portion of the funding be appropriated to the future.
The Board of Supervisors plan to finalize its Fiscal Year 2013 budget by Tuesday, March 20. The CCPS school budget has yet to be discussed.
View budget documents here: