County faces dire financial situation

By Jane Stebbins, Pilot staff writer January 11, 2013 09:09 pm

 

Curry County Finance Director Gary Short laid it on the fiscal line Wednesday when he outlined to county commissioners – two of them newly seated – just how dire Curry’s financial situation is.

“Anyone who’s been around for more than two or three days knows the county’s been talking about a fiscal cliff,” he said. “It’s been the talk of the county for quite some time.”

Now, commissioners are down to crunch time.

 

Short explained in detail how the county’s money works – where it comes from, where it goes, what services the county is mandated to provide, and where it stands today. The county borrowed some $700,000 from the road fund to meet this year’s budget, and the state has since ruled that can occur no longer. 

O&C timber land monies have been cut off – and in recent years have represented less than 10 percent of historic levels – and other federal revenue has been in decline. Economic development ideas are great, the commissioners agreed, but they take years to get off the ground and start generating revenue.

“It is amazing to me how shrunken in services the county has become,” said county attorney Jerry Herbage, who has worked there for decades. “The county used to have the libraries, it owned the hospital, it had departments that did weed control, lily bulb research. There were two justice courts, Home Health and Hospice, programs for the developmentally disabled, child support – that was a program forever – the animal shelter, Health and Human Services. And I didn’t hit them all.

“Over the years, commissioners like you thought the same thing: ‘What can we get rid of and still function?’” he added. “There’s not much left. We’ve got the basics, and we’re not doing well with that. The budget has been slashed to the bone. The total and type of services the county engages in has shrunk tremendously. You can draw your own conclusions from that.”

It leaves the commissioners with few choices: Short’s so-called “Burn the county down” scenario, in which the county spends what it has until there is no money left; allow the state to take over mandated services to provide for the basic health and safety of its citizens; or request voters to approve a tax, even if it’s merely a “bridge tax” until the economy improves.

Commissioner Susan Brown, who opposed tax increases in her campaign, asked Short to present commissioners with a hypothetical budget depicting only the services the county is mandated to provide and another showing citizens what county services currently looks like with the $2.1 million it has in discretionary revenue.

Commissioner David Brock Smith wants to voters to at least fund services that are currently operating far below minimum standards or approve a “bridge” tax until economic development proposals get underway and generate revenue.

“I’m doubtful we can find anything else that will change the picture significantly,” he said.

The three agreed that, whatever they decide to do – end services or ask for a property tax increase – they must prevent a united front to voters, or anything proposed will fail.

Short explained that county commissioners can’t merely slash their way through the general fund budget: There are no more departments that can be “spun off” to nonprofit organizations. Many services operate on such small amounts – veterans’ services, for example, costs about $30,000 – that “robbing” that agency wouldn’t fill the debt hole. Other services are funded by grants that may or may not require matching funds; some are “mandatory” and others are “required,” Short said, noting there are lots of gray areas.

“Do you have a crystal ball?” Short asked of Smith’s question if grants would disappear if the county didn’t pay its matching shares. “None are a lock. Those agencies and departments are facing some of the same challenges themselves.”                                                                                                                                                                                                               The state would be liable for some elements of the budget, but there’s still unemployment insurance and PERS (Public Employee Retirement System), which represents $710,000 of the general fund budget, to consider.

“The county must pay for unemployment,” Herbage said, when asked about other mandated payments. “But the state can’t take the buildings away. They can’t drive away our cars.”

The county could allow the state to take over mandated services – the sheriff’s office, the jail, the assessor’s office, elections and a few others – but then Curry County loses local control, and there’s no saying if the state would, in turn, charge the county for its services.

Voters might realize the long-term benefits of a property tax increase, Sheriff John Bishop has pointed out.

If the county were to, say, cease operating and the economy improved, citizens might start requesting services be reinstated. A new jail alone – the currently facility is in what Bishop calls “deplorable condition” and is located in a tsunami zone – would cost about $30 million.

So a bit of taxation now could be far less expensive in the long-run.

How much, however, is again in the hands of the commissioners. Based on recommendations from a citizens advisory committee, they’ve contemplated various tax scenarios – 2 percent and 3 percent sales taxes and property tax increases, among other suggestions – in the recent past, Itzen said.

Bishop’s department is running with four patrol officers who serve double-duty in the jail and administration.

“There is no way we can survive on a $2.1 million budget; that’s ludicrous,” Bishop said. “You have to have manpower, provide medical. You have to feed them (prisoners), clothe them; jails are expensive and you’re mandated to have one. I did a doomsday budget and we’re still looking at $3 million.”

And while many citizens think they are heavily taxed, Curry County pays the second-lowest property tax in the state, at 59 cents per $1,000 assessed valuation. Other money collected by the county is merely “passed through,” and goes to other taxing districts.

County Commissioner David Brock Smith asked his counterparts what agencies they would be willing to cut and how much the county would save by doing so.

“Would it be RSVP (Retired Seniors and Veterans Program)? Would it be veteran’s services?” he asked. “If the county doesn’t participate at 2005 levels, it goes away. I’m not real comfortable letting that go.”

“What would cutting ‘X’ save us?” Itzen asked. “And are we comfortable cutting ‘X’?”

Commissioners agreed they need to get the message out to a public reluctant to increase taxes and complacent in its belief the federal government will swoop in again to rescue it.

“But don’t forget, Rocky McVay (executive director of the Association of O&C Counties) went door to door to get a tax increase, and he was promptly unelected,” said David Bassett, a Port Orford resident in the audience. “You have to communicate very clearly and consistently what you have to do. The citizens will do the right thing when there is no other choice.”

“Hopefully people will understand we’re at a critical point in Curry County history,” Itzen said. “But we can fix it.”

Time is waning; commissioners have until March 1 to draw up ballot wordage and get it approved by the state.

“We have one second on the clock, and we’re 60 yards from the goal,” Short said. “We have a good shot with a May ballot. We’ve got to run like hell until we get there. Otherwise, we’re going to land, and it’s going to be a crash – a hard crash.”

The county commissioners will continue this conversation in upcoming weeks.