County sets plan to reduce budget

• Nobles County

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WORTHINGTON — In a special meeting of the Nobles County Board Tuesday afternoon in Worthington, commissioners approved several recommendations to address a looming budget shortfall.

Among the items they approved include instating a voluntary early retirement program for eligible county employees, notifying all six of the bargaining unions of a proposed 2010 salary freeze for county employees, and directing all department heads to cut potentially 10 percent to 15 percent from personnel and operational services budgets in the coming year.

All of the steps taken Tuesday are in direct response to Gov. Tim Pawlenty’s recent unallotment of county program aid.

Prior to the action, Nobles County Administrator Mel Ruppert explained that the county will see a nearly $560,000 reduction in county program aid from the state by the end of 2010. That includes a $172,737 reduction in December 2008, a $127,624 reduction in 2009 and a loss of $259,115 in 2010.

If the county was interested in raising taxes to make up for the loss of dollars, Ruppert said it would amount to a 6 percent levy increase. By adding another 3 percent to make up for losses the human services department will incur due to unallotment, he said the county levy would need to increase by 9 percent just to stay level. That does not account for anything else, including cost of living adjustments for employees.

“We’re going to have to start cutting,” said Commissioner Diane Thier. “We just can’t keep raising taxes and raising taxes to come up with money.”

Thier said rural residents are really struggling.

“I can’t see us increasing taxes to cover our shortfall,” she added. “Right now people are hurting badly. Anybody that’s got any hogs or dairy or … livestock of any kind are really hurting. You cannot just keep raising their property taxes when they’re losing money hand over fist like they are.”

Other commissioners agreed.

“The citizens in the state and in the county need to realize that you can’t take $600,000 out of a county budget … and expect us to be able to do services as usual and or meet the needs,” Ruppert said. “It will have an impact. How we deal with that is certainly the challenge for us.”

Roughly 40 percent of the money levied by the county through property taxes is used to fund salaries for county employees, said Ruppert. By freezing salary increases for county employees in 2010, the county could see a savings of $245,000, he added.

If the unions do not accept the salary freeze, commissioners discussed layoffs as a potential last resort.

With the voluntary early retirement program, retirement would be offered with a full or reduced pension from PERA, and would be open to employees who retire on “good terms.” All retirement requests must be received by the County Administration department by 4:30 p.m. July 17, with the retirement date on or before Aug. 31. Ruppert said the county last offered the voluntary retirement program in 2001.

While voluntary retirements would help the bottom line, Ruppert was quick to point out that four vacancies within county government have not been filled during the present budget cycle — accounting for much of the nearly $138,000 savings the county has at this time on its expenses.

“We conceivably could end up with a balanced budget yet,” Ruppert said. “That’s excluding human services.”

In addition to wage freezes and early retirement, commissioners examined a long list of potential cost-cutting measures as provided by Ruppert.

“Just reducing the appropriations, it isn’t a big dollar amount,” said Commissioner Marv Zylstra. “Some of those things we need in the community, too.”

He recommended the county notify all of the agencies who receive appropriations to expect a 10 percent to 15 percent reduction.

“We know that we’re going to have to cut the appropriations,” said Zylstra. “I hate to see us eliminating them completely. It’s nickels and dimes compared to the overall budget.”

It was obvious to commissioners that employees would be the target when it comes to making significant cuts in the budget.

“Wages and benefits are the biggest expense in any business,” said Thier.

Commissioner David Benson, joining the meeting via telephone, said there aren’t any good options when it comes to budget cuts.

“We need to take a tough position that these are real difficult times,” Benson said.

Ruppert said the next step, after commissioners approved measures to reduce costs, would be to notify the bargaining groups of the request to freeze wages, and then set up meetings to discuss the options further.

“I think the sooner we begin the conversation and make this impact known, the better off we will be,” Benson said.

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