Lucas County surpluses rankle commissioner

10/19/2010

As the Lucas County government scrambles to trim budgets into line with economic realities, commissioner Ben Konop questioned Tuesday why the county and various departments are holding onto millions of dollars in surplus money.

Financial records show the county had almost $200 million in leftover money at the end of 2009, down from $245 million in 2008. The money was dispersed throughout dozens of funds, and included revenue generated from tax levies, service or license fees, grants from the state and federal governments, and sales tax accumulated in the county's general fund.

Some funds exceeded the amount of the corresponding department's budget. For example, the county recorder has held around $1 million in an "equipment" fund for the last few years, while its 2010 yearly budget is $757,617. Other funds represented a considerable percentage of a department's budget. The children's services board ended 2009 with almost $20 million in unspent cash, just under half its 2010 budget of $45 million.

"I'm not an expert on this, I just think it's a little irregular and should be looked into," Mr. Konop said. "This seems at least potentially to me to be in excess."

Lucas County's budget cuts over the last few years have led to layoffs and furlough days in many government departments, including the sheriff's office. Mr. Konop has argued that money from the county's reserve funds should be used to rehire laid-off public safety personnel. Tuesday he said he is leaning toward calling for an outside evaluation of all of the county's finances.

"Should we be providing more services? Not laying off workers? Hiring workers? Or should we be cutting taxes? I think those are questions that should be answered by professionals," he said. "We have one of the worst economies in the country. We've seen a huge rise in unemployment. At such a time, should the government be carrying such a large amount of reserves?"

But other county officials said that the county's reserves are not as large as they might appear.

Bridgette Kabat, the county commissioners' chief of staff, said only $13 million in the county's general fund officially can be considered reserve funds. That amount has fallen from $25 million in 2008 because of the economic downturn. Ms. Kabat explained that other county departments have surplus funds that they are using to deal with budget cuts and other shortfalls. Some departments with large surpluses are saving for expensive equipment purchases or capital improvements, she said.

Ms. Kabat said no laws or common standards dictate how much a government entity should keep in reserves. However, she said bond-rating agencies have found Lucas County is in good shape, in part because of its reserves. In August, the Standard and Poor's rating agency rated the county's financial situation as "stable."

"We have strong fiscal policies," she said. "We are a good credit risk. That means we are a stable organization."

She added that a good bond rating means the county saves money in the long-term because it will pay less interest on loans.

Lucas County Commissioner Tina Skeldon Wozniak accused Mr. Konop of "confusing" the public, and said the various county funds cannot be looked at as a pooled amount of money. She said each fund is dedicated to a specific purpose and money cannot be taken from one fund and placed in another.

"It's really important that everybody understand that Ohio law requires that these funds be kept separate," she said. "The reality is, the sewer fund is for sewer, the dog-warden fund is for the dog warden, the real estate fund is for equipment. … Bottom line is, we're following the Ohio law."

The commissioner also stressed the need to maintain enough reserves to keep the county's bond rating stable.

Commissioner Peter Gerken also dismissed Mr. Konop's assessment that the reserves are too high. He pointed to other government entities, such as the city of Toledo and Toledo Public Schools, which have burned through reserves and are struggling with large deficits.

"I simply think it's responsible to have adequate reserves," Mr. Gerken said. "It's my pledge to the taxpayers not to turn us into an [entity] in debt. … I take a longer-term view rather than a short-term spend-everything-you-have approach."

Contact Claudia Boyd-Barrett at:

cbarrett@theblade.com

or 419-724-6272.