The Clarke County Supervisors met on Monday to have their first collective look at how the County’s FY13 budget is shaping up. As the Board begins to establish budget priorities it also discussed whether the County’s current tax rate was adequate to meet the needs of County residents in the faces of a potential 2013 budget deficit.
After several weeks of combing over the revenue side of the budget and with major budget expenditure requests yet to be presented by the Clarke County Sheriff’s department and the Clarke County Public School, the County is facing an FY13 budget shortfall of $$631K after accounting for $875K of pay-as-you-go funding set aside for planned capital expenditures.
As County employees approach their fifth year without salary increases; with Virginia Retirement System, health insurance and life insurance costs projected to increase $148K in the coming year; and with the County’s antiquated automation systems crippled by obsolescence, Monday’s discussion eventually turned to the consideration of a tax hike to address the County’s needs.
One major capital requirement discussed was a $650K FY13 budget request for implementation of an Enterprise Resource Planning (ERP) system funded jointly by the County and the Clarke County Public Schools. Funding for the ERP would initially be used to implement County treasury, property assessment, general ledger, accounts payable, payroll, and purchasing, and utilities systems followed by document management and human resources, applicant tracking, time and attendance, and leave management.
“We have some fundamental problems with the way that we are doing County business,” Supervisor Michael Hobert (Berryville) told the other Board members during Monday’s meeting. “Our department heads don’t have the ability to go online and review their fund balances or to see the status of their budgets. Compared to things like a recycling convenience center or a regional park, this is a fundamental need required to operate this locality.”
Hobert, who has led a two-year review of County automation systems, labeled the County’s automation systems as “primitive.”
County Administrator David Ash echoed Hobert’s concerns.
“If we don’t do this now then we at least need to be prepared to do something,” Ash said. “If our current vendors duck out on us for some reason were going to need to do something sooner rather than later.”
Despite the evidence presented in favor of an ERP system procurement, not everyone on the Board appeared in agreement with the wisdom of moving forward.
“I have big concerns about a small county being out in front on something like this,” said Supervisor John Staelin (Millwood). “One option would be to stay with the status quo for a while until companies can offer more turnkey systems that work with the Commonwealth [systems].”
“Should we do a bit more investigation on this?” asked Supervisor Barbara Byrd (Russell).
Joint Administrative Services director Tom Judge, who has conducted most of the investigation into the costs and benefits of an ERP system, said that other communities are already using ERP systems to streamline the costs of local government.
“Many communities are doing ERP through a software-as-a-service approach where the system and data are hosted by a commercial business,” Judge said.
Judge said that while a software-as-a-service- approach could save the County approximately 25% in cost by out-sourcing the expertise necessary to host the software to a private organization, he still has concerns about the County’s proprietary information being in the hands of an outside entity.
“One partial solution might be to implement a software-as-a-service model but have all of the County’s data and software backed-up on a local server that would be accessible in the event of a problem,” Judge said.
In addition to the $650K ERP cost, the Supervisors are also considering $65K for a proposed regional park on the Cool Spring Civil War battlefield site in the eastern portion of the County, a $500K expenditure – spread over 20 years – for a recycling convenience center located near the intersection of Quarry Road and Route 7, a $65K increase in regional jail costs and a $70K requested increase from the County’s department of Social Services.
In addition, a preliminary draft of the Clarke County Public Schools budget, due to be presented later in the February, requests 21 new positions needed in the coming year.
Given that the County’s current real estate tax rate of 62 cents per $100 of value may not meet this year’s “flat budget” plan, let alone fund a long-asked-for salary increase for County employees, one Supervisor suggested the option of using the County’s existing fund balances as a way to cover the deficit rather than with a permanent tax rate increase.
Supervisor David Weiss (Buckmarsh) said that given a flat funding approach for all agencies it may make sense to use some of the County’s “one-time” funds previously set aside for future projects to cover the deficit with hopes that improving economic conditions will allow the County to recover the revenues in the future.
“A time is coming when people will have to make a choice between accepting fewer services or accepting higher taxes,” Weiss said.
A public hearing on the Clarke County Public Schools budget will be held on February 13 at 7:00pm at Clarke County High School.