After six rounds of layoffs in nine months, Tooele County is evidently done with reductions in force.
Near the end of Tuesday night’s county commission meeting, Commissioner Shawn Milne announced that the need for employee layoffs is over.
“With the layoffs that were announced as of last week,” he said, “we believe, with everything disclosed about our plan that has been talked about so much, we are complete with all of the personnel layoffs, the carnage, upheaval and the like.”
His statement came later in a meeting during which over 200 people had packed into the county building’s former Third District Courtroom. They were there to hear what the commissioners were going to do about proposed cuts to retirement benefits (See related story).
They were also there to hear Tooele County Treasurer Jeremy Walker explain how the county’s cash woes came to be, what the commissioners have done in response, and what is the financial plan for the future.
Using a PowerPoint presentation, Walker explained how several things combined to strain the county’s revenue to the point that projections of cash flow indicated the county might run short of cash before the end of the second quarter of 2013.
Walker’s list of contributing factors to the cash shortage included loss of revenue from federal programs tied to the Deseret Chemical Depot, a decline in mitigation fees from EnergySolutions, increased costs and shortfall in revenue for the new county jail, and accumulated cash deficits at Deseret Peak Complex.
The commissioners knew for some time that the DCD would be closing, according to Commissioner Jerry Hurst.
Commissioners planned for the DCD closure but it alone is not responsible for all the county’s problems, he noted in an interview after the meeting.
“We knew the DCD would be closing and cut expenses starting four years ago,” he said. “But it did not help that the DCD funding started to go away at the same time the recession hit and other mitigation fees also decreased.”
The commissioners reduced general fund expenses from $27.6 million in 2009 to $21.3 million in 2012, a 22.8 percent decrease.
However, while general fund expenses decreased, the county bonded in 2010 for a new county jail.
Debt service and increased operating costs at the new jail contributed an additional $2.5 million annually to the county’s expenses, according to Walker’s presentation.
Income from housing federal inmates at the new county jail was expected to help cover some of the $2.5 million in costs, but revenue from federal prisoners was short of the anticipated amount by $750,000, Walker said.
According to Walker, a “perfect financial storm” was created with the combined loss of DCD money, mitigation fees from EnergySolutions cut in half twice, increased costs for jail operation along with Deseret Peak Complex’s accumulated borrowing of $6.25 million from other county funds.
The commissioners cut $1.4 million from their 2012 budget during the last quarter of 2012 by reducing equipment, supply, and travel expenses along with a series of three personnel layoffs.
The 2013 budget was balanced with a proposed $2.6 million tax hike, an 82 percent increase in the county’s portion of property tax.
However, in early January, cash flow projections showed that the county would run out of cash before property taxes could be collected in November.
“It was evident that we needed to do something short term to prevent us from running out of cash,” said Walker. “As well as something long term to rebuild the county’s fund balance and repay the money Deseret Peak borrowed from other accounts.”
The plan to rebuild the county’s financial strength included cutting costs in equipment, supplies, travel, training, and cell phone allowances.
Commissioners, along with department heads, evaluated county services and decided which services the county was required to provide by law and which services could be discontinued.
The resulting evaluation led to three additional rounds of layoffs in 2013 as more county departments were downsized, eliminated, combined, or employee’s hours reduced.
Since May 2012, the county’s employment count has gone down from 418 to 300 in May 2013, a 28.2 percent reduction.
Included in those layoffs was the elimination of the economic development department. Those duties have been transferred to the county commission.
The emergency management and aging services departments were folded into the health department. Also, the building and development services department will become part of the county recorders office in June.
Parks and recreation, and building maintenance departments were merged and staff reduced as the county outsourced custodial, maintenance, and management of venues at Deseret Peak Complex.
The county also outsourced engineering services and nurses for aging services.
The good news, according to Commission Chairman Bruce Clegg, is that with all the reorganization, layoffs, and expense cuts that have taken place, the need for layoffs is over.
Walker’s new cash flow projections, after this year’s budget cuts, shows that while the county’s cash flow may dip close to zero in July, the downward trend will reverse after that.
The county still anticipates the need for the $2.6 million tax increase.
“We still will need the tax increase,” said Clegg. “The recovery will take a while. We expect it will take between four and seven years for all the funds borrowed by Deseret Peak to be paid back.”
The commissioners also have several parts of their recovery plan to complete. They are investigating creating a special service district to take control of the multi-agency dispatch service the county currently runs. They are working on a plan to convert employees’ accumulated leave that is cashed out at retirement to a system of paid time off.
Commissioners also want to find someone to take over Benson Gristmill, the Wendover Airport, and additional venues at Deseret Peak Complex.
All county property, buildings, and equipment is being evaluated to determine if anything can be sold as surplus, noted Commissioner Milne.
With the imminent threat of running out of cash averted and reorganization plans completed, the county will now focus on long-term solutions. This includes diversifying revenue sources through economic development, participation in the legislative process, and possibly more frequent tax increases, according to Walker’s presentation.
The county will continue to focus on delivering required services and evaluating fees to match actual costs.
“I feel a lot better now,” said Hurst, in an interview after the meeting. “We’ve got a plan out there, it’s public, people know what is happening, and we’ve announced we’re done.”