If Congress hadn’t passed the farm bill Tuesday, the Tooele County Commissioners had a plan ready to keep the county budget intact despite the possible loss of more than $3 million.
Although funding for the federal payment in lieu of taxes program was included in the farm bill, the commissioners Tuesday made public a plan to pull $3.1 million from their 2014 budget in case PILT was not funded.
Commission Chairman Bruce Clegg opened Tuesday night’s commission meeting by reviewing the Tooele County PILT contingency plan.
“Even if the president signs the farm bill, we still have sequestration and debt ceiling problems to deal with,” he said. “So we want to have on record our contingency plan in case PILT did not get funded and for any other item that might attack our budget.”
The contingency plan, developed by commissioners in their non-public executive meetings, lists six areas, in order of priority, that would be cut from the budget to compensate for all or part of the loss of $3.1 million in PILT funds.
The first item on the chopping block is $200,000 in funding for mental health and substance abuse services.
The $200,000 is the county’s portion of a matching program funded by Medicaid. Medicaid matches county funds at a two-to-one ratio. A $200,000 cut in county funds would result in a net $600,000 reduction in revenue for mental health and substance abuse services in the county.
The next item to be cut is $250,000 for employee retention bonuses.
Similar to the bonuses paid out at the end of 2013, the commissioners included $250,000 in the 2014 budget for bonuses for county staff to be paid out at the end of the year.
Third on the priority list is funding for the improvement and repair of the county road on Stansbury Island known as Lake View Drive, resulting in $250,000 of savings.
The fourth item on the contingency plan is to eliminate plans to end the year with a $1.5 million budget surplus.
Building the budget surplus to prepare for unpredicted revenue loss or to help weather economic downturns was one of the selling points for last year’s $2.6 million tax increase.
The loss of $3.1 million in PILT would necessitate postponing plans to rebuild the fund balance, according to Tooele County Commissioner Shawn Milne.
Fifth on the list of reductions is $265,000 the commissioners had planned to store away to cover payroll liabilities.
Payroll liabilities include expenses incurred when an employee leaves the county or retires and the county is obligated under the terms of its employee agreement to cash out accumulated unused leave days or other benefits when an employee ends their employment.
These types of expenses are an obligation of the county, but have not been included in the budget in past years. As part of building better financial stability and eliminating surprise expenses, the commissioners set aside $265,000 as an estimated expense in the 2014 budget for payroll liabilities, according to Milne.
The elimination of the $265,000 in payroll liabilities will not mean any change in employee benefits, but means that the unfunded liabilities of the county will continue to grow, Milne added.
The last item on the list is to reduce the scheduled repayment of interfund loans to the Deseret Peak fund by $635,000.
The 2014 budget calls for $2 million of revenue to be set aside to repay part of the $6.5 million that the Deseret Peak fund owes to other county funds. The funds were borrowed to cover operating expenses for Deseret Peak Complex.
PILT funding for 2014, once uncertain, now appears guaranteed. The Senate approved passage of the farm bill with a 68-32 vote Tuesday afternoon. The House approved the farm bill last week. White House officials have announced that President Barack Obama plans to travel to Michigan State University on Friday to sign the farm bill.
The conference committee report on the farm bill, which both houses approved, included a $425 million allocation for PILT that is $15 million greater than the 2013 PILT allocation.
If the full $425 million is allocated to PILT payments, Tooele County may receive $200,000 more than last year’s $3.1 million, according to Milne.
Monday night, commissioners told fair board members that funding for the fair was dependent on PILT funding.
“If we get at least $100,000 in additional PILT money, we should have no problem funding the county fair,” said Milne.
While the farm bill passed Congress on Tuesday, the county does not receive PILT funds until June.
PILT distribution to counties is calculated using a formula provided by statute that includes the amount of eligible federal lands — primarily Bureau of Land Management and U.S. Forest Service land, and the population of the county.
PILT eligible land in Tooele County includes 1,899,955 acres of Bureau of Land Management property and 150,234 acres of U.S. Forest Service land for a total of 2,050,189 acres — or 46 percent of Tooele County’s land mass.
PILT calculations do not include the 1,573,893 acres of military-owned land in Tooele County.
Between the military, BLM and USFS, the federal government owns 82 percent of Tooele County.