In the last three months of 2012, Tooele County government was plagued with budget cuts and staff reductions as county commissioners responded to declining revenue.
In Dec. 2012 the commissioners passed a balanced budget for 2013 and went into the New Year hoping their financial troubles were over.
But continued budget and staff reductions, elimination of whole departments, and other cost cutting moves dominated the headlines in 2013.
By May 2013 the county’s employment count dropped from 418 to 300, a 28.2 percent reduction.
The county’s government went into 2013 considerably leaner than 2012, with the economic development department dissolved, bookmobile services eliminated, and the emergency management department merged into the health department.
Also, the county engineer was laid off and his post terminated, the surveyor’s office was stripped of all employees except for a part-time elected surveyor, and the sheriff’s department was decreased by 22 employees.
During 2012, $3.1 million was slashed from the budget in part due to declining mitigation fees from EnergySolutions, and because anticipated income for contracted inmates at the new Tooele County Detention Facility didn’t materialize.
The 2013 budget included a proposed $2.6 million property tax increase, the first property tax increase for the county in 27 years. The budget was initially balanced without the need for additional layoffs with the proposed property tax increase.
However, at the start of the Feb. 19 county commission meeting, Commissioner Shawn Milne, who had been in office for six weeks, read from a prepared statement: “Having reviewed the most recent budget numbers, including cash flow projections, we find it necessary to take further steps to reduce expenses.”
All county discretionary spending was frozen, including all capital projects, equipment purchases, non-critical repairs, travel, training, and supply purchases not needed to perform current work. Cell phone allowances were also suspended until March.
“To the extent possible, efforts should be made to limit expenses to salaries, wages and utilities,” said Milne while reading the statement.
His words brought a somber silence to the crowded commission chamber.
Short on cash
Commission Chairman Bruce Clegg said the main contributors to the county’s cash flow concerns were an anticipated sequestration of federal spending that might reduce the county’s federal revenue; a desire to find additional savings in the budget so the amount of the proposed $2.6 million property tax increase could be reduced; and a severe cash flow problem.
Later, two other needs were added to the list by the commissioners: Repay $6.5 million of internal loans made from restricted county funds to the Deseret Peak Complex fund, and build the general fund balance to sustain future unpredicted drops in revenue without drastic budget cuts.
While the county’s budget for 2013 was balanced, revenue and expenses didn’t match on a month-by-month basis. Property tax, which provides for one fourth of the operating budget, is not collected until November. Federal Payment In Lieu of Taxes (PILT), which is about 10 percent of the operating budget, is not received until July.
The uneven income was not a problem in past years when the county had up to $15 million in its general fund balance. But when the fund balance was expected to drop to around $2 million this year, the county faced the possibility of not having enough money in the bank to cover monthly expenses.
During a commission meeting last May, Tooele County Treasurer Jeremy Walker explained that cash flow projections last January showed the county would run out of money 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,” he said, “as well as something long term to rebuild the county’s fund balance and repay the money Deseret Peak borrowed from other accounts.”
Commissioners, along with department heads, evaluated county services and decided which ones were required by law and which could be discontinued.
The resulting evaluation led to three additional rounds of layoffs in 2013.
In March, employees from parks and recreation—including Deseret Peak Complex—and also building maintenance, were summoned to a meeting and told they were laid off, except for two department heads. A total of 29 workers, 27 full-time and two part-time, were affected.
Both parks and recreation, and building maintenance, were targeted for cuts because they are not considered essential core services, according to Milne.
In April, 11 more workers were laid off as the county shifted management of the local food bank, relief services, and domestic violence assistance programs to Valley Mental Health to save tax dollars.
“This is the safest way to ensure that these programs continue to exist in light of budget cuts,” said Milne.
In May, 10 more employees were laid off, including three in the county recorder’s office; three full-time and one part-time building and development services employee; one employee from the road department; one from the solid waste department; and one attorney from the county attorney’s office.
Along with the laid off workers, employees in the clerk’s and assessor’s offices took a voluntary pay cut by reducing their work hours from 40 to 36 per week.
“Sequestration, declining federal payment in lieu of taxes, and continuing lower than average mitigation fees, along with cash flow problems, made these cuts necessary,” said Commissioner Jerry Hurst.
Deseret Peak Complex
When staffs for parks and recreation, and building maintenance, were let go last March, Deseret Peak Complex was closed for 30 days while commissioners worked on a plan to reopen the facility at minimum expense.
Deseret Peak stopped accepting new reservations, and any scheduled events that would have cost the county more than fees collected, were canceled.
The Deseret Peak Aquatic Center was closed, and the Tooele County Fair was canceled. Also canceled was Wild Horse and Heritage Days, a new event that premiered last year at Deseret Peak.
The county fair board decided to cancel its popular summer event due to deep budget and worker cuts.
“The board felt that in light of the county’s budget problems, which led to the layoff of employees who played an important role in the fair, it would not be appropriate or possible to hold a fair this year,” said Mark McKendrick, fair board chairman and the county’s director of parks and recreation.
Although the fair was canceled, the annual demolition derby, traditionally held in conjunction with the fair, did occur. Ray Dixon, chairman of the demolition derby, recruited an out of town production group to put on the event.
Deseret Peak did host a Little Buckaroo rodeo, a softball tournament for three weekends in June, and the Bit and Spur Rodeo on the Fourth of July weekend. Also, 700 people filled the complex’s conference center for a Tooele County Live Fit event.
Private contractors also operated the BMX, Motocross, softball, and soccer venues.
And regular league play on the soccer and softball fields continued throughout the summer by agreements with private contractors.
The gates to Deseret Peak remained open to allow access to the Oquirrh Mountain Mining Museum and the Utah Firefighter’s Museum and Memorial.
Other venues at the complex, including the archery park, equestrian facilities, pitch n’ putt golf course, and RV camping, were available by reservation.
The convention center, pavilion, and arenas were available for rental, according to McKendrick.
“Basically, other than the pool, everything is still available out here,” he said. “We are not closed.”
Operation of the Historic Benson Gristmill was also disrupted due to the commissioners’ budget and employee cuts.
The gristmill attracts up to 12,000 visitors a year, some from foreign countries, according to Suzy Wall, former Benson Gristmill supervisor.
But visitors last summer were greeted by chained gates and “closed” signs, instead of smiling docents offering free-guided tours.
Once the home for several organized events throughout the year, the gristmill was only available for weddings, receptions, reunions and other events by paid reservation.
The effort to save money did not end with layoffs, elimination of programs and services, and department restructuring. The commissioners raised the ire of retired employees when they proposed to change retirement benefits.
The commissioners’ original proposal eliminated all post-retirement health insurance benefits for current employees that did not sign—by May 30—an agreement to retire with their last day of work no later than June 29, 2013. Current retirees would also have their benefits eliminated or reduced, according to the first change in benefits proposed by the commissioners.
After a couple public meetings packed by past and current county employees, the commissioners revised the benefit changes. The new post-retirement insurance plan makes no changes to the benefits for employees that retired before July 1, 2013. However, employees that retire after July 1 will have their retirement health insurance benefits drastically reduced or eliminated.
A total of 13 county employees chose to retire between last May and June to keep their retirement benefits intact.
Financial recovery plan
After six rounds of layoffs of nine months, the commissioners announced an end to the layoffs and unveiled a financial recovery plan for the county at their May 14 commission meeting.
“With the layoffs that were announced as of last week,” Milne told the audience at the meeting, “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.”
Using a PowerPoint presentation, Tooele County Treasurer Jeremy 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.
In addition to downsizing, eliminating, and combining departments, cutting staff or reducing employees’ hours, the plan to rebuild the county’s financial strength included cutting costs in equipment, supplies, travel, training, and cell phone allowances.
New cash flow projections, after the 2013 budget cuts, showed that while the county’s cash flow may dip close to zero in July, the downward trend will reverse after that, Walker said.
According to Walker’s presentation, 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.
However, the county still anticipated the need for the $2.6 million property 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 embarked on an ambitious schedule of five town hall meetings around the county to explain their financial recovery plan and the need for the proposed tax increase before a legally required Truth in Taxation Hearing last August.
Tooele County Auditor Mike Jensen brought welcomed news to taxpayers that because of new growth in the area, the additional tax needed to raise $2.6 million would be $73 instead of $88 per year on the average home valued at $150,000.
At the town hall meetings throughout last summer, the commissioners heard passionate pleas from the public to continue to cut services or sell Deseret Peak Complex before raising taxes. But they also heard requests to reopen the facility.
The commissioners voted unanimously at the truth in taxation hearing last August to increase property tax revenue by 66 percent to pump needed funds into the county’s cash-strapped budget.
Commissioners assured the public that revenue from the tax increase would be used to pay back internal loans from restricted county funds made to Deseret Peak, build the county’s fund balance, and establish a reserve fund for capital projects.
“This tax increase is not going to restore cut employees,” said Commissioner Shawn Milne in August following the Truth in Taxation hearing for the $2.6 million property tax increase. “It will not restore Deseret Peak or Benson Gristmill to glory days. The plan of raising taxes is simply to get us out of the morass that we are in today.”
The commissioners organized two new advisory committees as a result of suggestions during the town hall meetings,
A budget advisory board, consisting of county employees and community members, was organized last October to review fiscal policies and procedures, proposed departmental budgets, and act as a point of contact for citizen budget and financial concerns.
The board will meet at least five times a year, including quarterly meetings to review budget reports, and once in October to discuss the budget for the coming year.
Also organized last October, an audit committee, comprised of three to five persons with basic understanding of financial reports and independent auditing standards, will assist the county in preparing for annual independent audits. The committee will review audit results with the external auditors and the commissioners.
Part of the audit committee’s job is to help the commissioners interpret financial statements and audit reports. The audit committee will also act as an external independent contact for whistle-blowing and initiate investigations as needed.
A new tax
The 2014 budget for Tooele County includes a proposed $1.5 million property for municipal services to be paid by property owners in unincorporated areas of the county.
“With the drop in revenue that the county has seen, the municipal service tax is needed so we can continue to provide services that citizens in the unincorporated areas of the county need and enjoy,” said Clegg. “We need additional funds to pay for these services and the municipal service tax is one way to raise those funds that we as a commission control.”
At a rate of .000752 the municipal service tax will add an additional $62 per year on a house valued at $150,000.
Although the tax’s revenue ceiling was set by the commissioners at $1.5 million, the actual tax rate will be set by them after an independent study is conducted to determine the actual cost of municipal services provided by the county to unincorporated areas.
Three weeks after adopting the 2014 budget with the new municipal service tax to help pay for services in unincorporated areas, the commissioners granted a 2 percent “retention bonus” for all county employees and elected officials.
According to the commission, the total amount of money used for the bonuses was approximately $200,000. Milne supported the bonus, but opted out of accepting a bonus for himself. Other elected officials may have opted out, too.
“We took a look at the budget and we had enough money to do this,” said Clegg. “It is not a raise or anything permanent—just a one-time bonus.”
The bonuses were evidently made possible by the county’s work to restore its budget to fiscal stability, according to Milne.
“The financial recovery plan is working,” he said. “Thus we have the ability to do this.”