03/16/11 — County will lose funds it did not spend

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County will lose funds it did not spend

By Steve Herring
Published in News on March 16, 2011 1:46 PM

Wayne County stands to lose slightly more than $1 million in annual 911 revenues, not because it has spent too much, but because it did not spend enough money to satisfy the state -- something County Manager Lee Smith said just doesn't make sense.

The county has been spending only a couple hundred thousand a year from the annual 911 revenues it is eligible for and was told that to get a million dollars it should have been spending a million dollars, Smith said.

"Well, I didn't need to spend a million dollars," he said. "So the money that was collected by Wayne County citizens on Wayne County's (telephone) landlines and cell phones, I can't use. That does not make sense. So, therefore, the state passed on an unfunded mandate to the taxpayers of Wayne County."

The news isn't all bad -- the state has loosened restrictions on how the county can use one-half of its $3 million 911 fund balance.

"The state developed a new funding formula for 911 revenues," county finance officer Pam Holt told commissioners at a Tuesday finance workshop at the Goldsboro Country Club. "This fiscal year, 2010-11 we are receiving $1,315,248. Next year we are going to receive $268,001 -- a decrease of $1,047,247. That is the bad news. We have submitted a reconsideration request, but we have not heard a recommendation yet.

"The distribution change is based on a five-year average rolling cost. (The state's) intention is to only to fund ongoing capital costs. What they did is they came in and looked at our fund balance in this fund. And as you can tell, our revenues were exceeding our expenditures."

She said that Wayne County Office of Emergency Services Director Joe Gurley and his staff had been trying to save up for future costs for the 911 system.

"It kind of bit us," she said. "They are saying that we have to spend down. I have been with Joe to the state twice trying to fight for this money. We still haven't got an answer. We are not expecting a whole lot better than the $200,000."

The lost funding will have to be made up locally because the county still has to have 911 and send out emergency personnel, Smith said.

Granted, the county will use some of the 50 percent of its 911 fund balance for debt service on its new $10 million radio system, but it still does not bring the other money back, he said.

"As we go forward they may readjust that," he said. "So now I am looking at maybe I need to buy a different computer system so that I can draw down more money from the state, but that doesn't jell in my brain that I should spend more when I am in a world that says spend less."

Smith has been to meetings with state officials, too.

"The sad thing was I sat in a meeting, and I won't go into the detail about who was in the meeting in Raleigh, but I am going to tell you it is a sad day when government officials look at counties and say, 'You should have spent more money. If you had spent more money you would be better off,'" Smith said. "I went, 'You mean by being frugal and not doing certain things I am the one getting criticized?'

"They looked at us and went, 'Yeah.' I went, 'This is a sad day. This is a sad day for taxpayers because we did the right thing.' Our radio system, we held off on the backroom equipment because we said if our backroom equipment is not installed properly with the radio system one doesn't matter, the other doesn't matter. So we waited another year and it bit us. It bit us to a tune of almost $1 million."

Smith said he now understands what a $24,000 hammer or $24,000 toilet seat means. He was referring to a scandal decades ago when the federal government reportedly spent thousands of dollars for common inexpensive items like hammers and toilets.

"I should have been buying $2,000 chairs for 911 because that is what those other counties were doing and we were not," Smith said.

Smith said he has told that personally to Gov. Bev. Perdue twice and anybody else he could talk to that the state was wrong.

Commissioner Jack Best asked if the county could "spend down" by using the annual 911 funds for debt service.

The uses for those 911 funds are restricted and do not include debt service, Smith said.

Having more flexibility in using half of the fund balance eases some of the sting of the lost money, Mrs. Holt said.

"They have authorized us to spend 50 percent of our emergency telephone fund balance for any public safety needs," Mrs. Holt said. "I think we can go before Dec. 31, 2012. We can spend that $1.5 million on any public safety need that is not authorized already."

Previously the money could only be spent on equipment that got the incoming 911 call into the system and nothing else -- the spending stopped at the 911 center.

"I am going to apply the debt service that I have paid this year to that 50 percent," Mrs. Holt said. "That debt service is sitting in the general fund. I have an e-mail from the state that says that is OK."

The county has a good 911 center, Smith said.

"We bought good equipment," he said. "If I had needed to buy a Chevrolet or a Buick and I didn't need a Cadillac, I didn't buy a Cadillac."

Smith said he had looked at some counties that have changed 911 systems a lot whereas Wayne has tried to put in systems that would last for years.

"That is what we did because that is the standard and we got criticized by the state for not doing it faster," he said. "I didn't want to put in a 911 system two years ago that didn't work with the new radio systems. That disqualified us from (funds) that are part of the 70 cents (fee) that they collect, that I can't access."