PREBLE COUNTY — Preble County Commissioners had a conference call with the Budget Commission on Monday, April 20. Auditor Lavon Wright had prepared a revenue report showing different COVID-19 scenario budget downfalls for 2020.
The spreadsheet showed the current budget with estimated revenue for 2020, 20 percent estimated revenue cut amended budget, 15 percent estimated revenue cut amended budget, and 10 percent estimated revenue cut amended budget.
Preble County Prosecutor Martin Votel spoke on behalf of the Budget Commission. He pulled their attention to the current budget total revenues of $14,844,661.50.
“That is the number that the Budget Commission certified for 2020. That is the current amount,” he said.
There is an anticipated $3,800,000 in cash carryover from 2019 which is included in the total revenue amount listed above.
“The Governor had announced that state-wide revenues are down 10 percent based on March correction. Obviously, the big shutdown didn’t start until the third week of March. So, the anticipation is, that state-wide, revenue coming in in April are going to be a lot worse than 10 percent. So, the Governor has instructed his cabinet level ministers to prepare for – quote unquote — prepare for budget cuts up to 20 percent,” Votel said.
He added, right now, there is a little uncertainty for how bad things are going to be, so Wright wanted to add flexibility into the spreadsheet and show different options for potential revenue decrease.
The projected 10 percent revenue cut column has a total revenue of $15,829,151.98, including $6,038,379.76 in cash carryover. Total revenue is $9,790,772.22 without the carryover. The projected 15 percent revenue cut column has a total revenue of $15,329,727.73, including $6,038,379.76 in cash carryover. Total revenue is $9,291,347.97 without the carryover. The projected 20 percent revenue cut column has a total revenue of $14,805,103.48, including $6,038,379.76 in cash carryover. Total revenue is $8,766,723.72 without the carryover. There is also Fund 179 (MCO Tax) which has a total of $1,272,407.15.
Votel explained, they started with the assumption there would be $3,800,000 in cash carryover, but that number is more accurately $6,038,379.76 in actual cash.
“The interesting thing is, even with a 20 percent cut, which is what letter ‘F’ represents [on the spreadsheet] the amount of certificated money is about the same,” he said.
Commissioner Rodney Creech mentioned fund 179 (MCO Tax).
“That is the one time payment we got to try to make us whole for five minutes?” Commission President Denise Robertson questioned. The fund was accounted for separately on the spreadsheet, but could be counted towards the total number.
“Where I was going with that, if we had a 17 percent increase, fund 179 alone would cover it,” he said.
Votel explained, “We are of the opinion that there is really no action needed with respect to amending the amount of money available to the county commission.”
He added, there is no need for an amended certificate, because even if the county were to do an amended certificate, “if there is no more than a 20 percent of decrease in revenue the bottom line amount of money available to the county commission barely changes, due to that under estimation on cash carryover.”
“Does that mean we would have spent our carryover?” Robertson asked.
Votel said it wouldn’t mean that — because that cash carryover has actually recently increased to over seven million.
“As the Budget Commission, we don’t feel the need to adjust the amount of money available to the county commission. We don’t feel like we need to take any official action right now. However, from a county commission perspective, looking at that $14 million there are two ways to look at it, in my judgment. You can look at that 14 million number and say, ‘That seven million cash balance, we don’t intend to spend any of that,’” Votel said.
“Well, if that were true, then you have a problem and you have a whole bunch of cuts to make in order to anticipate a 20 percent reduction in revenue. However, you could look at the 14 million number and say, ‘Hey, look, we saved this six or seven million dollars for a rainy day and it is currently a rainy day. We intend to spend some of that money.’”
He added, this is a county commission decision to make, but the Budget Commission doesn’t intend to “move” that number at all.
“I agree, Marty, and I believe when we start looking at our capital improvements and contingency funds, there is a lot of play in there. We can make up a lot of room on that portion, I believe,” Creech said.
Robertson responded, “I think our solution is going to be somewhere in the middle of that, because, we obviously don’t want to spend all of our rainy day fund and then start at day one, zero, and look at some serious cuts. At the same time, we obviously know we’re going to have to cut into that.”
“We’ve had five to six good years, let’s look at this as a business, we’ve had five to six good years when we’ve been able to put money back, we’re gonna have a bad business year and there are some years you lose money in business.”
Votel added, the board has done an “excellent” job being conservative with the budget.
“With that said, not only have we been able to put back for the hard times, but we’ve been spending about a million dollars a year in capital improvements, so if, worse case scenario, this drags on for a couple of years, our buildings are in good shape, our vehicles are in good shape — we’re actually sitting in the best spot we can be in, I believe,” Creech said.
Wright added, she will be monitoring the situation closely and watching the numbers weekly. Robertson requested to meet once a month to discuss the budget and stay on top of the situation.