For more than a decade, the county has been transferring revenues from its water fund into its general fund to help balance its budget. However, this has meant increasing water rates, leading some critics to call this practice a backdoor tax increase.
Ott cited this transfer as one of the reasons he voted against the budget on Tuesday, a budget that was approved in a vote of 4-1.
Prior to the vote, Birrell said the majority of emails she had received about the budget were on the topic of the water transfer.
“As a county we have become dependant on these monies since 1998,” Birrell said. “It’s not something that we can cut the cord on overnight. It is going to take time. But we do need to wean ourselves off these fees.”
Birrell suggested coming up with a plan that would reduce costs, eliminate duplication and overlap in all county departments to achieve an annual $5 million savings “or more to where we wouldn’t be dependent on the water transfer fee over a period of four to five years. If we can save and reduce our costs up to the $5 million per year in our budget we wouldn’t be dependent on these fees overtime, and I’d like to ask the county manager and all the county departments, the committees that we will be forming to work together to arrive at these savings and assist us in making that decision.”
Commissioner Helen Goreham said such a change would not be easy.
“I think what’s important to look at for this Board is that the amount that is being transferred is approximately $21 million dollars, which the charge would be to this Board to see that we come up with an additional $21 million,” Goreham said.
Goreham also defended the practice as a legal one that other governments practiced as well.
For example, the Marietta City Council has a long standing practice of taking millions from Marietta Power and Water, the city owned utility, and transferring those millions to the city’s general fund to keep its millage rate low. At the same time, the City Council, at the request Bob Lewis, general manager for Marietta Power, has raised water, sewer and electric rates every year for the past several years.
“ I know,” Goreham went on to say, “that it was instituted in the ’90s, and if you look at it, it is a legal action that other jurisdictions do use, and we need to be mindful of the amount that we need to look for somewhere within the budget in order to reduce our dependence on this practice, which is a legal practice, but we cannot lose sight of the fact that this practice also has enabled us to keep our property taxes extremely low, so there is a balance out there.”
Lee said he would work with staff to come up with a plan over the next few months to evaluate the pros and cons of not using the water transfer money.
Ott said another reason he voted against the budget was because of the county’s pension plan.
“There was an item in the consent agenda today that was using saved money or money that was left over from the health account to pay our annual contribution to the pension,” Ott said. “And so I’m concerned that we potentially have a problem with coming up with the money to make our annual payments. And then we just have the 30-year plan that keeps changing, so I have concerns about the pension. In a lot of ways, I’m concerned that we have more of an expense problem than we do a revenue problem. And that’s not to diminish – clearly the digest has gone down, but we can do a better job of managing our expenses.”
Jim Pehrson, the county’s finance director, explained the agenda item that Ott referenced by saying that for FY12, the county’s actuary determined that it needed to pay $18.4 million into the county’s retiree health care program trust fund for 2012, a program called “Other Post Employment Benefits Trust Fund.”
Yet as it turns out, the county is projected to collect up to $7 million more than it needed due to such reforms as raising requirements for new employees to be eligible for health benefits in retirement.
A calculated increase in health care premiums produced excess dollars above what is required to fund the 2012 OPEB contribution.
An amount not to exceed the projected $7 million will therefore be transferred into the Employee Pension Trust Fund to supplement the current year contributions, Pehrson said.
Yet Lee expressed confidence in the county’s pension plan.
“I have been working with Jim Pehrson and the pension board for the last two years to address the concerns that everyone has about the pension plan because of its market influx, but we have a new plan that addresses the issue that the rating agencies like, and I’m satisfied that the new plan addresses satisfactorily our pension issue,” Lee said, adding that, “we will continue to watch it on a monthly basis as we always do.”
The county’s general fund budget is projected to see a drop of 0.04 percent from the current fiscal year. A budget of $321.8 million was adopted, which is down slightly from the $321.9 million adopted for 2012.
The budget offers no raises and funds the hiring of 43 new people. The 2013 budget shows Cobb with 4,432 employees, up from 4,388 in the current fiscal year budget. The general fund budget has a reserve fund of $38.6 million, said spokesman Robert Quigley.
The 43 positions, which amount to a cost of $1.1 million, are broken into four categories. In the public safety category isan EMA deputy director, who would receive a base salary of $56,597. Also proposed is a fire captain ($59,468 base salary), three fire driver/engineers ($44,366 each), 15 firefighters ($40,186 each), two police lieutenants ($51,293 each), a police major ($65,499), a police sergeant ($44,366), and a public safety agency director ($101,587).
Under the general government category, new hires include one automotive tech ($34,778), one custodian ($21,320), one judicial administrative supervisor ($38,355), two judicial administrative technicians ($25,896), one maintenance tech ($34,778), one property management division manager ($56,597), one public services agency director ($96,803) and one risk analyst ($44,366).
In the public works category, new hires include a client support analyst ($53,851), two equipment operators ($25,896), a general crew chief ($31,533), three maintenance workers ($23,566 each) and a program division manager ($68,744).
Finally, under the culture and recreation category, one administrative supervisor is called for ($38,355), according to Pehrson.
The county’s fiscal year runs from Oct. 1 to Sept. 30.
“It’s fiscally solid and is based on recurring revenue sources, so I know that we can continue to deliver the services that the community has come to expect effectively and efficiently, and we fund public safety adequately to keep our community safe,” Lee said of the budget.