LOWVILLE — With millions of dollars invested in county-owned buildings and projects planned to improve the quality of life and increase the workforce and private investment in Lewis County, officials decided it was a good time to discuss funds with lawmakers.
County Treasurer Eric J. Virkler and Director Ryan M. Piche made a presentation at the monthly finance and rules committee meeting last week that clearly outlined the amount of money set aside in each county fund and where did this money come from, as many projects are about to exit the planning stages.
“That’s how Eric and I look philosophically at county finances when we have these types of conversations about big-picture things. We are having this conversation today because we are about to make some big financial decisions,” Piché said.
Some of those decisions were finalized at a special board meeting on Thursday evening, when five contracts were awarded for the construction of the Highways Department buildings and the complete renovation of the Outer Stowe Street building which houses the offices of the social services. The contracts total approximately $15.9 million, well below the expected bond of $20 million.
The board also approved the purchase of the former Glenfield Elementary School for $315,000.
Mr. Piché narrated the first slide of the presentation which showed a graph of two buckets of notional money.
The operations budget, which contains $55 million in expenditures, is funded by property, mortgage, and sales taxes and other revenues “that continually fuel county operations.”
“It is appropriate that this side of the county’s finances be conservative, efficient and sustainable and obviously we need legislative oversight on this aspect,” the county executive said, adding that the county is “lucky” to be able to afford a “second bucket of county finances – it’s our capital and our community projects.”
“This (bucket) requires board direction because Eric and I can set a budget, but we can’t decide on bond money and we can’t decide on capital projects. You have to decide that,” Mr. Piche told lawmakers.
Payments in lieu of taxes, or PILOTS, fill the second bucket, including from large renewable energy companies with projects in the county; stimulus funds that have been distributed since the start of the COVID-19 pandemic; and fund balances and sales tax in excess of budgeted amounts used for transactions.
“We should be able to develop this without affecting property tax rates because it’s an extra,” Piché said. “It doesn’t need to be sustainable because it’s a one-time expense.”
Mr. Virkler reviewed the year-end pre-audit balances in county funds, starting with the $24.3 million in the general fund.
Part of the general fund is a reserve fund for unforeseen economic challenges, targeted at 10%, or $14 million of total annual expenditures – based on the county’s budgeted expenditures of $55 million and approximately $90 million dollars for the Lewis County health care system, totaling approximately $140 million.
“It’s double conservative because the hospital already holds 10% of its spending in reserves,” Piché said. “Theoretically, if we just wanted to keep 10% of our spend, it would be $5.5 million, so we’re very conservative.”
Mr. Virkler and Mr. Piché noted that there are programs under discussion that could be paid for with the $11.3 million general fund surplus, including $2.5 million for recreation projects and $500,000 for the construction of a facility for the homeless. They said it might also make sense to reduce the amount earmarked for the healthcare system.
“To me, it doesn’t make sense to just sit on that money,” Mr. Virkler said. “Maybe we should use it for good things.”
“It’s as much food for thought as anything,” Piché added. “If there are projects we are thinking of, we have the funds available to carry them out.”
A total of $7.7 million has been set aside for the capital reserve fund in recent years.
The fund includes the first half of the county’s $5.2 million US federal bailout funding, or $2.57 million, which “very recently” started flowing, Virkler said. The funding will be used to increase high-speed broadband access and address the lack of childcare services in the county, among other projects.
A portion of the capital reserves will be used over the next two years, including $486,000 for the new roadside garage and $210,000 for renovations to the social services building, keeping the amount guaranteed for the projects at $20 million. dollars or less. Another $1.6 million is targeted for facility improvement payments in 2021.
The solid waste management fund, which had $610,000 at the end of the year, is expected to be reduced to a targeted level when the facility construction project is completed.
“Our original plan when we were about to invest in the new system at Solid Waste was to bring our fund balance down to around $200,000 because we had such strong revenue,” Mr. Piché said. “Even during the construction, we didn’t have to reduce this fund balance, so we really remain convinced that even if the large-scale house project is going to come up with more than we wanted, we can still pay cash for this and our fund balance will remain in a secure position.
The general theme of the presentation was that the county’s finances are strong in part because of the $2.17 million in PILOT revenue Mr. Virkler estimated for 2023, which will be used to cover the expected bond payment of $800,000. to $1 million for the construction projects and Payment of Existing Debt of $575,000 for the county courthouse addition completed in 2008. Payment of the construction project obligation is expected to be finalized upon Tuesday’s board meeting.
“We tried to build a firewall. We keep our operations funded by sales tax, property tax, mortgage tax,” Piché said. “That stuff (PILOT money) isn’t forever. It’s not consistent. It’s one-time payments as long as those wind turbines or solar panels are there. You built that firewall in order to have the ability to complete either county capital projects or community investments.
He added that if the board wanted to use some of the “surplus” funds in operations to increase support for certain budgeted programs, that can be done.