GOLD BEACH Curry Countys government is running a $521,096 deficit for the current fiscal year, according to an independent audit report.

Commissioner Marlyn Schafer said Monday that could mean a hiring freeze, service cuts, or special levies for some departments.

The audit, performed by Maxwell and Hallis of Eugene, was released Thursday. It listed the amount of expenditures from July 1 to Dec. 31, 2000 as being $521,096 more than incoming revenues.

Of that total, $182,618 was spent in violation of budget law, said Schafer.

Most of the rest of the deficit occurred when the previous commissioners and budget committee overestimated the countys cash carry-over.

The carry-over keeps the county government operating each year from July 1 until federal timber receipts arrive in October.

For fiscal year 2000-01, the cash carry-over was estimated to be more than $1 million. The county actually had only $690,211.

Schafer said at Mondays commissioners meeting, The county has been living on their savings. The savings are gone and now we will have to decide which programs we can continue to fund.

All mandated services have to be funded first, said Schafer. To keep the same level of mandated services that we had last year, we will need $3,592,046.

Our property tax levy brings in $830,219. Just to fund essential services, we need $2,761,827 more, she said. Grants and Oandamp;C money will cover that, but what will we do about the other programs?

Schafer said the county must start being more fiscally sound and have an adequate cash carry-over on hand. She also wants to save for future expenses that cant be controlled and building repairs.

This is a dilemma we must face, said Schafer. I am not proposing more taxes for the county.

I do want the people of Curry County to realize that if they have property that is assessed at $100,000 they are paying $67 of their tax bill to the county.

You have elected us to keep the county fiscally sound, so we will face our obligation, but we need to make sure that you understand that some of our decisions may not be popular.

At the top of Schafers solution list is an immediate freeze on hiring for any county department.

The commissioners are so serious about the idea that their Monday meeting will be continued today (Feb. 7) at 9:50 a.m. so they can vote on the freeze.

Prior to that, at 9 a.m., they will hold a workshop with department heads to decide on priorities for fiscal year 2001-02.

If a department is not mandated, said Schafer, then we must ask ourselves where we will get the money to fund it.

We may be forced to put some departments on a special levy to see if people are willing to pay for them.

She said each department must be carefully watched for the rest of the fiscal year to make sure it isnt overspending its revenues.

The citizens do not believe that we are in a fiscal disaster because every year it appears that we pull money out of a hat, said Schafer.

Transfers have been made that shouldnt have been. One program was allowed to overspend as much as $180,000.

The commissioniers declined to identify that department.

Past commissions have bragged that they have continued services at no additional taxes, said Schafer. That is true, but now this commission is faced with reality.

Even with the additional Oandamp;C money we will not be able to fund all needed programs. We have been living on borrowed time.

Commissioner Lucie La Bont is working on a grant to hire a financial planner to write a long-range plan for the county. She said that should make sure the county doesnt end up in this situation again.

La Bont also praised Schafer for her financial expertise and her ability to decipher the audit report.

Some of the citizens in attendance werent happy with what they were hearing.

Henry Lustig of Ophir said, Its easy to say have a levy, but that wont work in Curry County.

He said the budget crisis should be taken into consideration in upcoming union negotiations. He asked the commissioners to cap insurance benefits for county employees.

I wont agree to pay for a levy so civil servants can have better insurance than I have, he said.

Gloria Rodgers, also of Ophir, agreed. She said the insurance packages retirees used to enjoy have disappeared in recent years.

Commissioner Cheryl Thorp said, We know we have to change the benefit package. Thats a given.