Yellowstone County commissioners got their first look at the 2018 preliminary budget on Monday as they begin a week of budget hearings.
Finance Director Kevan Bryan said in a summary that building projects and funding the county attorney’s office will pose “significant challenges” for the county’s operations.
Some of the building projects, like the jail expansion, new MetraPark shop building and remodeling of a new sheriff’s office are underway and funded, he said.
However, Bryan said he is uncertain how the county will pay for two new district court judges, along with increases at the county attorney's office.
Meanwhile, the preliminary budget has no major change in the countywide mill levy, and steps last year to cut unnecessary spending by departments and offices have held, Bryan said.
In preparing for the 2018 budget, Bryan asked departments to submit budgets that did not exceed their 2017 budgets, with any capital request, operating or personnel increases to be identified in supplemental requests, Bryan said.
The preliminary budget also has requests for 9.75 full-time equivalent positions. The requests include two Justice Court clerks, three detention officers, one sheriff’s evidence technician, a quarter position to hire a full-time MetraPark cashier to replace a part-time position, a half-time position increase for administrative coordinator for the Youth Services Center and two deputy attorneys and two legal assistants for the county attorney. The GIS department is vacating a full-time position.
In addition to Monday’s hearings, budget hearings are set for Tuesday afternoon, Wednesday and Thursday. The hearings are being held in the commission’s board room on the fourth floor of the courthouse.
The 2018 budget will be the first county budget for Commissioners Robyn Driscoll and Denis Pitman, who took office last year. Pitman beat incumbent Jim Reno in last year’s primary election while Driscoll was appointed to the board to replace Bill Kennedy, who resigned.
A projected timeline calls for the commission to have follow-up discussions and revisions until about mid-August. Final budget hearings are scheduled for Aug. 29 and Sept. 5, with adoption of the budget and county mill levies on Sept. 5.
2 more judges
A significant challenge, Bryan said, will be providing space for two new district court judges by the end of 2018, when voters will elect the new judges.
Bryan said the county will “strongly consider” rehabilitating the soon-to-be-vacated sheriff’s office as new space for some courthouse operations to free up courthouse real estate for judicial space.
The sheriff’s office is preparing to move into the Payne building from the round office building next to the courthouse.
Bryan said the county has an estimated $2.5 million in its fiscal year 2018 year-end general fund capital improvement fund to help with the project. However, in most scenarios, the money will be insufficient to handle the needs, he added.
County attorney needs
The county’s space needs, Bryan said, lead to another major budget issue, which is how to fund the county attorney’s operations, which have faced significant increases each year.
A special public safety attorney mill levy passed more than 15 years ago to fund the county attorney’s operations now covers less than 30 percent of the costs, Bryan said. The county has been subsidizing the county attorney’s budget from the general fund, with transfers projected to be almost $2.4 million for 2018.
Bryan is recommending a reallocation of about $450,000 from other areas to slow the drain on the county attorney’s reserve fund. But tapping those other areas cannot continue long term, he added.
The “most direct way” to help address the problem would be to increase the public safety attorney levy by six mills to eight mills, Bryan said. Such a mill increase would mean an annual tax increase of about $8 to $11 on a home valued at $100,000 and $16 to $22 on a home valued at $200,000, he said.
The additional tax revenue would limit but not likely stop the subsidies from the general fund, Bryan said. The general fund then would be able to cover other needs.
“The board may or may not view this as a palatable solution,” he said.
Even with using other resources to help the county attorney’s operations, that budget’s reserves still fall below “acceptable levels in short order,” Bryan said. Reserves could hit 15 percent in fiscal year 2021 and the fund would have to borrow money, he said. By the end of fiscal year 2023, there would be no money.
If the county cannot find another revenue source beyond what finance is recommending for the 2018 budget, Bryan said the general fund would need to begin committing almost one out of every five dollars of revenue to the county attorney’s fund.
“At that point, the general fund reserves begin to decline,” Bryan said.
The finance director cautioned that the assumptions for the county attorney’s fund were based on predictions and that those predictions could change.
“But to assume so would not be prudent in our view,” he said.
A broad look shows total revenue projections of $102 million, including $46.7 million in taxes, for the 2018 budget.
The county’s total resources are projected at $115.5 million, which includes the revenue and about $13.3 million in reserves.
Total projected expenditures are about $115.5 million, with the biggest chunk, almost 32 percent or $36.6 million, budgeted for public safety and judicial operations.
Bryan said tax revenue projections are expected to increase 1.5 percent, which includes the state’s allowance for inflation and growth in the tax base.
Ongoing tax protests will continue to create shortfalls in all budgets and may become an issue for funds with lower reserve levels, Bryan said.
The county has reduced the estimated protest rate for most funds from about 6 percent to 4.6 percent, he said. Protests from two refineries, CHS in Laurel and Phillips 66 in Billings, along with Rocky Mountain Pipeline, account for about 98 percent of the more than $2 million the county will not receive due to the property tax disputes. He said there is no “good estimate” on when the protests might be resolved.