Commissioners Split on Keeping Special Projects Fund

Like many counties, Lincoln County government uses a Special Project Fund to provide money for various projects it needs to pay for, apart from taking money from the General Fund.

For over an hour at their last meeting, county commissioners discussed whether or not to keep the current Special Fund, or simply include the money in with the General Fund.

Commission chair Paul Donohue and board member Jared Brackenbury were in favor of eliminating the fund, while Commissioners Kevin Phillips, Nathan Katschke, and Varlin Higbee voiced strong support for retaining the fund.

At the end of the various points being put forth, the action item on the agenda was defeated on a 3-2 vote. County Treasurer Shawn Frehner also voiced her thinking that the fund should be eliminated.

Phillips, Katschke, and Higbee spoke strongly about keeping the fund in order to have money available to “fall back on.” Phillips, in particular, called the County General Fund “a black hole, and it has been the propensity of the board, after board, after board, to spend more than we take in.” Higbee said it was “the nature of the beast, especially on the federal level.”

Much of the money for the Special Fund, separate from that which is put into the General Fund, comes in part from an agreement the county worked out a few years ago with the U.S. Air Force for payment in lieu of taxes on The Area. Higbee would not elaborate on what The Area is. He said the amount varies from year to year, “but it could also be discontinued at any time,” although he hopes that will not happen.

Donohue, in his comments, was hoping to change the procedure allowing Special Funds to be added to the General Fund as needed. At the same time, he admitted the value of the Special Fund has been great, for example, providing for the County Detention Center.

“However,” he said, “if we are smart enough on the Capital Improvement side of things (which is part of General Funds) that we budgeted, and are frugal in how to use that money, be good stewards and all, and when we think we need a project, we have money to use. Then each year, we could add more to the Capital Improvement Fund. I see a huge need for the money to be put there instead, although it does not have to be used right away.”

Donohue also felt that it was probably not correct to think that the Special Fund would be protected during county contract negotiations. “In arbitration proceedings, any funds that might show an excess, except those in Capital Improvements, are susceptible to removal. I don’t think we would do well at arbitration.”

Higbee, in turn, cautioned against putting money that could be put into the Special Fund into the General Fund. “Then it throws open the door for the unions, and for everybody else, to demand raises and the county would lose on the end of all the negotiations. You lose control of that money.”

Phillips felt that having the Special Funds account is a “stopgap. Money that is movable, that needs to be there. If we don’t have some kind of stop, we’re not going to be able to fix the budgetary leaks and problems we do have.” He advised that Special Project money should be left where it is.

Donohue countered by saying he felt the Capital Improvement Fund would be equally effective for dealing with those same problems. “If at the end, and we have been frugal, following the standards as we should be, if there is an excess, they would be designated funds that could not be used for anything else.”

Phillips replied saying he felt such standards, good as they might be, are violated regularly.

Higbee said the county cannot count on the Capital Improvement monies to always be consistent.

Phillips said that if all the monies are put into the General Fund, “we’re going to go further into the red and find out we’re broke in a hurry.”

Higbee said, “We are currently not living within the means of our tax structure, and having the Special Project Funds has covered our backsides several times.”

County Planning and Building Director Cory Lytle stated he felt the five-year Capital Improvement Outlay plan was “a joke. It just sounds good to be able to plan all that. You can wish to do something on the one hand, and then do something else on the other. You all know the reality of it.”

Donohue said having the money in the General Funds would mean he would “not always need to go to the commission board to ask for money to do something.”

Higbee said Capital Improvement monies cannot be used near the end of the fiscal year to augment the existing budget, but Special Project Funds can be, and he saw a real benefit in that. General Fund monies could also be used for that purpose, but Higbee’s concern was there might not be enough left in the General Fund to be of any benefit.

 

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