County Finance Commissioner Warns:

 County Moving Near Dangerous Financial Position 

Poughkeepsie… Dutchess County Commissioner of Finance Pamela Barrack has written to the County Legislature and County Executive to advise them of her concern that the county is nearing a dangerous financial position. 

The Legislature and Executive received a memorandum from Barrack on Monday detailing the county’s shrinking fund balance. Barrack advised county leaders that the county has moved to bare minimum financial “reserves” and is close to having to borrow money to pay day to day operational expenses. 

County Executive Steinhaus has long advocated for long-term, multi-year thinking about fund balance reserves, always seeking to protect reserves to buffer future financial storms.    In his 2011 budget message, County Executive Steinhaus acknowledged his own risky decision to appropriate $10 million of fund balance to cover deputy sheriff payroll and hold the property tax levy frozen for 2011.   The alternative would have been the layoff of up to 100 to 150 additional county employees, including possibly 50 to 100 deputy sheriffs.   However, his budget message also included the very clear warning to legislators, “any additional reduction to the remaining fund balance could put the county at risk…”   

Despite the warning and absent details, the Legislature last week adopted budget amendments to draw down an additional $3.2 million to pay for Resource Recovery Agency (RRA) obligations. 

County Executive Steinhaus took issue with the legislative claim that their use of fund balance is to pay for a legal obligation to the RRA.    “Actually, it appears legislators are drawing down reserves to subsidize higher special interest driven spending for 2011,” said Steinhaus.      The County Executive noted legislators could have used the “spending cuts” they made to pay the RRA obligation, rather than using those monies to add new spending.   “Legislators have chosen to add spending of more than $2 million, not included in the Executive budget proposal, for payroll and benefit to add staff positions and increase spending for non county government agencies.    That money could have been used for the county’s legal obligations, rather than increased special interest spending.” 

Additionally, the Legislature has still failed to address how the 2010 RRA net service fee will be paid.    When the Legislature adopted the 2010 county budget, legislators rejected last year’s proposal to address the RRA net service fee and failed to budget funds to pay for the expense.    Addressing this issue has been a legislative priority all year, but no solution to pay the bill has yet been finalized.  

Compounding the problem, the County has received the first of two bills for the 2010 RRA net service fee.   This first bill totals just over $1.8 million.   Using the 2009 net service fee costs as a guide, it is anticipated the total 2010 fee could be approximately $4.3 million. 

“We cannot afford to have our fund balance reserves drained away because the Legislature has not decided on a solution to address the RRA issue,” said County Executive Steinhaus. 

“Legislators should be well aware of how precarious our financial position is,” said County Executive Steinhaus.   “The County cannot be pushed to the financial brink by adding in new spending for 2011.” 

Steinhaus pointed to recent opinion column written last week by Democrat minority leaders, “To compound the county’s situation, we have Legislators Goldberg and Kuffner advocating for even more money from taxpayers to fund new, higher spending for employee raises.   What are they thinking?   Don’t they understand taxpayers can’t afford any more spending?” 

County Executive Steinhaus concluded, “As legislators prepare to vote tomorrow evening to adopt the 2011 county budget, they must be responsible for the decisions they make and realize that new, added spending to appease special interest groups can only push the county to the brink of financial disaster.”