Fellow citizens of Coffee County,
It is my privilege to serve this year as the Chairman of the Coffee County Budget & Finance Committee. It is the Committee’s responsibility each year to prepare a proposed budget for consideration by the entire Coffee County Commission. It is my first year as Chairman and the first year serving on the Committee for most of our members. I want to thank each one who serves on the committee for their time and dedication to attending many budget meetings each year.
Last week the Budget Committee approved a budget for the upcoming fiscal year which begins on July 1st. I have received questions since then about the size of our budget and particularly the level of deficit spending that the budget currently includes.
I would love to answer everyone’s questions in person before the full commission meeting Tuesday evening, but unfortunately, I am traveling out of state and I’m unable to attend the final approval. So, I will attempt to answer questions as best I can in this column.
What’s in the budget?
First of all, the budget of Coffee County is broken into a number of funds: To give you a feel for our budget, here is a list of the funds and the currently planned budget expenses for each next year.
- Fund 101: General Fund – $26,741,284
- Fund 116: Solid Waste/Sanitation – $2,200,000
- Fund 118: Ambulance Service – $3,340,487
- Fund 120: Local Purpose Tax Fund (Industrial Development) – $195,472
- Fund 122: Drug Control- $335,300
- Fund 131: Highway/Public Works – $7,997,067
- Fund 151: General Debt Service – $1,470,000
- Fund 152: Rural Debt Service – $4,660,637
- Fund 171: General Capital Projects – $14,738,487
- Fund 171: Rural Education Capital Projects -$10,000
- Fund 171: Rural Capital Projects Infrastructure – $12,660
- Total County Funds Planned Expenditures (excluding school budgets) – $61,701,394
A Look at the General Fund
The General Fund is the largest fund in our county budget (about 43% of the total budget). Most of the funding for the various departments and most county employees is included in the General Fund.
One of the first questions asked about the General Fund is “How much has spending increased?” This is actually more difficult to answer than you would expect. A budget is a spending PLAN and it turns out that throughout the year, events always change the plan. When these changes occur, we amend the budget to maintain our predicted budget. During budget preparation, we actually look at the last 2 years’ budgets in addition to next year’s budgets.
Our budget spreadsheets contain 4 columns that are useful when looking at our budget development
- 2022 Audited Actual
- This column contains the actual expenses we had in FY22 as audited by the state of Tennessee. In FY 22 our actual expenditures totaled $21,092,917
- 2023 Amended Budget
- This was the budget plan we had prepared last year with amendments included. This represents funds that were approved to be spent. At our last meeting, the 2023 Amended Budget Expenditures were $25,394,976.
- 2023 Estimated Budget
- This column contains an estimate of the actual budget spending for FY 2023. This is based on the money we have already spent this year plus the money we expect to spend for the remainder of the year. Since we are within days of the end of this year, we have a very good idea of what our final spending for this year will be. The current estimate is $24,136,674.
- 2024 Planned Budget
- This column contains our plan for next year’s budget based on inputs from the various department heads, and our expectations of next year’s needs. The initial budget proposal was developed by Mayor Matheny with the assistance of our budget director and then reviewed and adjusted by the budget committee. The proposed budget for 2024 currently stands at $26,741,384.
So Seriously, How Much Did Spending Increase?
I know that’s a lot of information, but now let’s use it to consider our budget growth. There are 2 numbers in the list above that are pretty solid. The audited number from 2022 and the estimated number from 2023 both represent what we really spent. So this year we actually spent about $3,043,757 more than we did in 2022. That’s a 14.4% increase over last year’s spending.
Now let’s look a little closer at this year’s budget. This year we PLANNED to spend $25,394,976 but we actually spent $24,136,674. That means we spent $1,258,302 LESS than we planned. We also received $214,679 more than we expected in revenue. What this means is that our predicted deficit for last year was reduced by $1.47 million last year and we actually had a surplus of about $413,000.
So what do we do with the extra surplus? For now, it goes into our General Fund Balance which acts as a reserve. Our current reserve has now increased from $9,657,920 to $10,070,902 dollars. That puts our reserve balance at 38% of this year’s planned spending,
Our reserve balance is 38% of this year’s budget.
Finally, let’s answer how much spending is increasing this year. If we compare this year’s planned spending with last year’s actual spending we would think that spending is increasing by 2,604,710, which is 10.8% But it’s probably better to compare this year’s PLANNED spending with next year’s PLANNED spending. That increase is only $1,346,408, which is 5.3%. If we spend every item we have budgeted for, the increase will be about 10.8% but past experience says that is unlikely, We will talk about why in the next sections.
Why Don’t We Spend Everything We Budget?
The majority of the unspent money represents employee pay that was budgeted but is not spent. This occurs when money is budgeted for employee positions, but we have been unable to fill the position. It also occurs when an employee leaves and the position is empty and when a new employee has a lower pay rate than the original budgeted amount.
A combination of low pay and a lack of available job applicants has combined to leave slots unfilled, especially in the Sherriff’s Department, both deputies and jailers. This has also happened in our ambulance services and health care departments.
While unfilled positions can result in reduced expense to the county, it also represents an unfilled need. It has been difficult to provide full ambulance service coverage to county residents because of unfilled positions. In the case of the jail, there are staffing requirements set by the state on the minimum number of jailers. We have worked with Sherriff Partin to fund an adequate number of staff in his departments.
Employee pay raises
I have had several questions about employee pay raises:
- How much are employee raises?
- How did we decide the amount of the raises?
- Why aren’t the raises the same for every employee?
One of the most challenging parts of serving on the budget committee is determining raises for county employees. Frankly, this is an area that our entire commission needs to address. We do not have a well-defined pay policy at this time.
A few years ago, the commission removed an outdated step-and-grade system that did not provide a realistic pay scale at today’s salary rates. Last year, we made use of a statewide survey of county and city salaries to provide some guidance.
In the absence of a good system to determine pay raises, the commission has had to rely on exercising good judgment based on knowledge of surrounding communities’ pay scales and pay rates for similar work in the private sector.
We have had consistent feedback from the employees in the five years I have been on the committee that the employee pay scale is too low. Many have voted with their feet, leaving county employment` after we have incurred the expense of onboarding and training new employees.
In light of these facts, Mayor Matheny has proposed a 4% pay raise for all employees this year. This has been included in the budget being presented Tuesday night.
How do we compare to other communities?
- The city of Manchester just gave a 10% raise to employees
- Bedford County gave a 1% step raise + 5% Cost of Living Adjustment (6% total) for all full-time employees with no property tax increase. They also gave $100K in tax relief for seniors.
- The city of Tullahoma increased its budget by 3.5%. They also updated their step-and-grade system, but I do not know the effective pay raise at this time.
- Dekalb County (Smithville) is considering a 26.9 cent property tax increase, with a 5.24% increase to all employees in addition to any normal step raises.
- Lincoln County is considering a 5% employee pay raise. A 54% percent property tax rate increase was considered but failed to win approval.
- The city of Fayetteville considered a 35-cent property tax rate increase along with a 6.5% pay raise for city employees. This budget failed approval.
- Franklin County: With no opposition, the County Commission approved the 2024 budget Monday with a 12-cent property tax increase. I don’t have any information on their pay raises
- Rutherford County – Considering a 5% pay raise for employees with a 16.2% property tax increase
- Moore County considering a 3% pay increase.
When considering how much (if any) pay increases our employees should receive, I believe we have to take into account the raises being implemented by surrounding communities. Based on the actions of surrounding communities, a 4% pay raise seems to be within a conservative range while providing an incentive for our existing employees to remain with Coffee County.
Additional Raises
We have recommended some additional raises for a few employees whose salaries are significantly below market rates. This included giving raises to some library employees and our solid waste convenience center workers who were previously making less than $12.00/hr. We also gave some additional raises to members of the planning, maintenance, probation, mayor’s, and budget office who were underpaid based on the previous year’s salary survey and known competitors’ salaries in the local region. I don’t have exact numbers on the total of these raises, but I will try to verify with our budget director and post an update. I think this is between $80K-$100K
Summary Comments
I hope this information has been helpful to you to understand our current budget proposal. While there are other details that could be discussed, I don’t want to make this too long. Let me close this with some summary comments and observations
- We have proposed a zero tax increase on property tax rates. Many counties around us are considering, or have already passed tax increases.
- Our increase in spending this year is actually less than last year’s increase
- Our proposed 4% pay increase is less than the pay increase of most surrounding communities in an environment of the high cost of living increases for our employees.
- Our pay scale has been substandard for many years.
- Mayor Matheny has been working to improve our current health insurance benefits at lowered cost, saving money for both our taxpayers and our employees
- We anticipate additional revenues not already included in the budget
- Coffee County is expected to receive about $750,000 for the School Resource Officers (SRO) program from the state of Tennessee. Sheriff Partin has already implemented an SRO program for several years. After equipment and training expenses, a portion of these funds will offset expenses we are already budgeting.
- Thanks to conservative estimates of revenue and expenses, we expect the actual deficit to be less than our budgeted amount.
- We have a strong reserve of funds ($10 Million) built into our fund balance. If we do as well as we did last year reducing the deficit throughout the year, we will probably spend less than 10% of our reserve.
- Coffee County is poised for strong job growth and economic growth for the next few years. I believe that our best chance to maintain and lower our tax rates is to support economic growth in our community.
- I hope everyone will join me in supporting the proposed budget. Thank you for your time.