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County to borrow $4 million from itself to stay afloat
Kitsap County will need to borrow $4 million from its road fund in order to continue operation for the first two months of 2010, due to a continued shortage of revenue.
This will be the fourth time since October 2008 the county has taken this action. In each instance, the money has been returned after property tax revenues were collected.
County Administrator Nancy Buonanno Grennan described the situation as “a cash-flow problem,” and said several governments have needed to take similar action.
In order to borrow the money, the county commissioners will need to approve a resolution by the end of 2009, according to Grennan.
Grennan said the budget cuts implemented over the last two years are working, and she reported the county received a little more sales tax than projected.
Still, “a lot of little things” drove the county deeper into the red.
Central Kitsap Commissioner Josh Brown estimates the board spends about half its time on budget issues.
He said the biggest issue is the amount of reserves available to the county, and the current balance of $4.1 million, an amount that Brown calls “critical,” should not be allowed to decrease any further.
“We cannot allow the reserves to go any lower,” Brown said. “We cannot afford it as an organization. A year from now we cannot discover that the fund has fallen even farther. That is not acceptable.”
Since 2007, the commissioners have conducted a series of meetings requiring budget reductions, followed thereafter by requests for more cuts.
At one point, department heads and elected officials asked the board to present worst-case scenarios so they could make the cuts all at once.
The commissioners agreed to do so, but this has not appreciably changed the process.
On Monday afternoon the commissioners held a lunchtime budget session including several elected officials, delivering the message that additional sacrifice would be required.
This caused some irritation among the attendees, specifically County Clerk Dave Peterson and Prosecutor Russ Hauge.
Peterson pushed for specific numbers and limits for cuts, which he said had not been provided.
And Hauge pressed for specific notice.
“I have a job to do,” he said. “I don’t have the time to come to every one of your budget meetings and wait to see if anything pertains to my office. I would appreciate getting some advance notice if you’re addressing anything that will change how I need to do business.”
The commissioners then resolved to improve the communication process to avoid such surprises in the future.
One suggestion was to wait until after next week’s election before making any additional budget decisions. If I-1033 passes, county officials say, the situation could become much more crucial.
“Things will change if this initiative passes,” Brown said. “And when the economy recovers it will be more difficult to reinstate these programs.”
Since the budget became an issue, the county has taken a series of actions, including eliminating personnel (FTEs), consolidating services and closing administrative offices one day a week.
Several high-level employees, such as Grennan and Department of Community Development Director Larry Keeton, have voluntarily cut back their hours.
These actions have not improved the situation dramatically, nor has the economy improved dramatically, necessitating “creative” solutions.
Grennan said administrative functions have been combined in several departments and this trend is expected to continue — which will result in layoffs.
Another idea suggested was to close the government down completely for the week between Christmas and New Year’s Day, although this wouldn’t be appropriate for the jail and courts.
Several high-level employees could be encouraged to retire, but some of them would need to be replaced and that may not represent a significant cost savings.
Law and justice are designated as priorities and have not suffered as deeply as some other departments, partially due to intense lobbying by Hauge and Sheriff Steve Boyer.
In an afternoon budget session, Hauge told the board how the cuts would affect his office.
In simplest terms, he said he is not willing to make deeper cuts to the criminal division because doing so would curtail the office’s ability to fulfill its responsibilities.
He will cut the civil division, but that means the county will not get advice on land-use, employment and other legal matters.
Hauge said contracting out these services to a third party when needed could become more expensive than maintaining the civil staff. And if the county loses a major lawsuit because it did not receive preventive legal advice, that would negate several years’ worth of staff costs.
Part of the projections include $324,000 in billings the prosecutor will collect from other county departments.
If the billing amount falls below this level, it is added to the requested $438,000 in cuts, which were requested on Oct. 6.
“If we don’t make the projected billings to other departments, it will be added to the amount that I have to cut,” he said. “Added up, this represents a 10 percent cut of our resources, which is not acceptable.”
South Kitsap Commissioner Charlotte Garrido gave what has become her standard response — all county offices are in this together and everyone needs to sacrifice.
Furthermore, all county departments are making cuts of 10 percent or more.
Still, Garrido gave Hauge credit for his presentation.
“You’ve made a heck of a good case,” she said.