04/03/13 — County changes budget policy

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County changes budget policy

By Steve Herring
Published in News on April 3, 2013 1:46 PM

More than $500,000 will be pulled from the county's reserve fund to cover budget amendments in the Office of Emergency Services even though unused money is available in the department's budget to cover most of the expense.

Wayne County commissioners had called a Tuesday afternoon work session to discuss the amendments, but spent a good portion of the two and one-half hour session bemoaning the practice of cost shifting.

And in a 5-2 party-line vote, the Republicans on the board stopped that practice.

"I make a motion that effective today that we, as a board, not allow any cost shifting from line item to line item for any overruns in budgets," said Commissioner Joe Daughtery. "My goal here is to stop the shifting, taking from Peter to pay Paul. That we, in fact if we have a shortfall, if we have need for funds that that department come before us and ask for a budget amendment where we fund it from reserves."

It wasn't the first time that commissioners, particularly Daughtery and Steve Keen, have complained about the practice.

"Is this voodoo economics?" Daughtery said. "I don't understand the principle whereby you are establishing a budget with line items and each line item having a budgeted amount, but all during the year you can move it around like you want to. What good is a budget?"

For example, a budget might have $10,000 for advertising, but the money is not spent, he said. Instead it is moved to another line item. At the end of the year the budget shows $10,000 spent for advertising even though that is not what happened.

"What I am saying is that you are distorting the outcome," he said.

However, county Finance Director Pam Holt said Daughtery was talking about what is budgeted versus actual which shows where the money is spent.

"I would prefer having a budget where you in fact are budgeting items that commissioners would approve it," Daughtery said. "During the course of the year if you need additional funds that you take it from 110 (fund balance) but not from another line item or budget, but that you actually supplement the funding rather than shifting."

That is the board's choice, Mrs. Holt said.

Mrs. Holt said she was simply following the budget amendment procedure set down by previous boards.

Shifting funds around is a "normal practice" for the government, she said.

"Otherwise you are taking that budget and you are inflating it, the budget, not the actual," she said. "You are bringing the total budget up. It is a choice. Either way the outcome is going to be the same at the end of the year."

Commissioner Ray Mayo said that like Daughtery, he could not understand how government could do something that is totally unacceptable in the private sector.

Cost shifting defeats the purpose of having a budget, Daughtery said.

"Am I incorrect, Mr. Chairman? I thought we had addressed this matter previously and had instructed that we did not want cost shifting in line items," he said.

Keen said that was correct. Daughtery then asked Mrs. Holt if she was aware of that.

"We just presented it so that you could make the choice," she said.

That did not satisfy Daughtery, who repeated his previous comments.

Keen stopped Daughtery by saying it had been discussed within the past 90 days and as late as a pre-agenda meeting he had with Mayo.

"Why would you want to go into your fund balance and increase your budget when you have a line item sitting over there that is not being used that you can take the money from?" said Commissioner John Bell, a Democrat. "I don't quite follow your analysis here."

Keen asked if that was a question for Daughtery.

It is for the board, Bell said.

"To me simple accounting practices mean you establish your budget and you spend from that budget, and if you need additional revenue sources then you go back to the funding arm to request for an increase," Daughtery said.

Bell, who said he had about 16 hours in accounting classes, disputed that as being a simple accounting practice.

He said he understood that Daughtery wanted it just so that he understood it.

"But what they are doing is the correct way of doing it," Bell said. "So why do you want to go and do something that is contrary to accounting practice?"

Daughtery tried to use an example in which a department could have $300,000 for employees. He said the department could hire enough employees to spend the $300,000.

"If he decided he wanted to hire more personnel he could just cost shift from another line item and hire the employees he may want to do with no understanding from this board," he said.

That is not correct, Smith said.

"He could not add positions," Smith said.

Daughtery backtracked, and said forget about employees and consider other expenditures.

"Here you are leaving too much flexibility out here to be able to take monies out of one category, or multitude of categories to expend that," he said. "I think that is too lax."

Mayo said not allowing cost shifting provided a truer budget picture.

Commissioner Bill Pate said he agreed with Bell, but with Mayo as well.

Commissioner Ed Cromartie likened the line items to a family where money can be moved up and down the line and stay in the family.

"I heard said in this (discussion) rather than get it from Peter or Paul go to higher than them to get it," Cromartie said. "But as long and Peter and Paul are in the same family they can share it. That is how I see this right here. There is a paper trail.

"Before we make a motion to change this let's just make sure there is a complete understanding of the process in place right now. I do not like to see a whole budgetary process changed in the middle of the stream because everybody who is having to deal with it is accustomed to using these formula, following the process that we have now. I would ask the commission not to change from this process. It might be better to change at the end of the year."

Bell attempted to speak but was stopped by Keen who told him he was out of order. Bell said that Keen had not given him opportunity to offer an amendment.

Keen said he had and proceeded with the vote.

After the vote Keen asked Bell what he had wanted to say. Bell said he had nothing to say because the vote already had been taken.

Bell and Cromartie voted against the change.