Bonds eyed as fix for county's 2012 deficit

Next year’s budget hole may have been filled by Whitman County commissioners during a lunch meeting Monday.

Spending was originally pegged at $1.5 million more than revenue in the initial draft of the county’s $13,193,216 budget, but sales tax revenues from construction at the Palouse Wind project and spending reductions dropped that gap to $541,115.

Commissioners Monday discussed ways to eliminate that gap for the 2012 budget.

“What are the capital expenses from current expense that we could take out of that?” asked Commissioner Michael Largent.

Main items commissioners are considering taking out of next year’s budget are infrastructure projects like replacement of the chiller on the jail and new equipment and software for the information technology department.

Commissioners have budgeted $150,000 to dedicate for capital improvements next year, and $725,069 for IT upgrades, about $200,000 of which involves hardware.

Monday, they discussed the possibility of issuing bonds to pay for that infrastructure, removing those items from next year’s spending column.

With $130,000 in left over cash reserves commissioners had dedicated to balance the 2011 budget, the 2012 spending plan would be only $120,000 out of whack. Commissioners would then have to decide whether to come up with that amount in cuts or plug the hole with more cash reserves.

“Well, it’s 12:30, you’ve got a balanced budget and, gentlemen, we’re done,” said Gary Petrovich, county administrator.

The bonds would also be used for a $700,000 remodel to make the courthouse compliant with the Americans with Disabilities Act, to re-roof buildings on the courthouse complex, make security upgrades to the public service building and remodel the public service building and the IT building to make them more energy efficient. Cost of the project is estimated by Facilities Manager Bob Reynolds at $1.5 million.

The jail chiller was originally set to be funded through a low-interest loan program from the state. The loan would be repaid by the amount saved in utility bills.

Commissioner Pat O’Neill, though, said such a repayment plan would take 31 years to pay for the new chiller, making the loan option unfeasible.

O’Neill balked at the idea of bonding the county to pay for IT hardware that may have to be replaced as soon as technology improves.

“I don’t believe it’s a good idea to bond for 14 years on stuff that’s only going to be good for another five years,” said O’Neill.

Largent asked how the county would pay for $2 million to $5 million in bonds.

“We have a mechanism to pay for bonds,” said Commissioner Greg Partch. “And that’s the wind farm. We know that project’s going to be done in 2012.”

Partch said the county is expecting to reap about $300,000 to $400,000 in annual property taxes from the wind farm, money that could be used to back construction bonds.

Petrovich, however, said Assessor Joe Reynolds told him earlier in the day property taxes off the wind farm would more likely amount to $100,000 a year over the next 15 years.

Petrovich also noted employee salaries are scheduled to increase, and utility costs will likely increase in coming years.

Partch added the re-opening of the Wal-Mart in Moscow will take away 25 to 30 percent of the sales tax revenue generated by the Pullman store, which opened a year ago.

Commissioners committed to a quick decision on the bonding and the 2012 budget, hoping to wrap up negotiations by Thanksgiving.

“We should make sure (county employees) can go home at Thanksgiving... and not have to worry about whether they’re going to have a job at the end of the year,” said Partch.