The Grand County Council is trying to pass its annual budget, but the process has not been easy due to several factors. As a result, the final document has been late to be produced and the county will have a workshop to finalize its plan on Monday, Dec. 18, five days after public comment on the budget closes.
Two weeks before Thanksgiving, the county council received the results of a salary survey that showed many employees were not being compensated fairly. Out of 207 employees evaluated, more than half are due for a raise, according to Mike Swallow of Personnel Systems and Services, the company that conducted the salary survey.
“Just over 50 percent of the employees could realize some kind of an adjustment. That would be the minimum, getting all employees up to a proposed new starting rate but some of them are quite minimal [changes]. A handful of them could be substantial,” Swallow said. “It depends on the next course of action that the council chooses to pursue and how they determine as well to define [work of worth] value.”
Grand County Council Member Mary McGann said that competing philosophies have additionally complicated the budget process.
“Usually by now … we would be done with [budget] meetings. This is way late and in my opinion it might go to the twelve o’clock hour,” McGann said. “We have philosophies that are competing with each other on how money should be spent and we have the added burden of attempting to implement the salary survey and so the combination has been fairly difficult. It’s been challenging and frustrating. Tensions are high. Tensions are high with the employees, tensions are high within the county council … There has been a perceived lack of transparency.”
Those differing philosophies have come out in a disagreement over how to manage the budget. In past years, the county has budgeted in the red but ended up in the black due to padding the budget and conservatively estimating revenue streams.
“We have always budgeted ... to be in the red but working with the department heads, we’ve always managed to not spend exactly what we budget,” said Grand County Clerk and Auditor Diana Carroll. “They save money where they can. This year, however, the salary survey is a little more than anticipated. We have people on the council who this is their first year budgeting. I think probably the biggest issue we have, is just the learning curve.”
The county has been putting money into savings in recent years, Carroll noted.
“Our fund balance is about $3.5 million,” she said. Carroll added that the county has spent $5 million on one-time capital projects since 2010.
“That’s one-time money that has been transferred out of the general fund so we would have had that much more money had we not spent it on other things,” Carroll said.
However, not all county members are on board with the budgeting-in-the-red approach.
“I’m all for tradition when tradition is positive,” said Council Member Patrick Trim when the council discussed their budget at their Dec. 5 county council meeting. “I’m not for tradition when tradition is negative. If you’re budgeting and you’re budgeting in the red, I have never heard of this before. So I understand I’m a newly elected official ... I’m almost positive every business that I’ve been involved in doesn’t budget in the red.”
“The 2018 fiscal planning process hosts some new dynamics including some challenging circumstances that we’ve yet to completely agree on. For one, this council established early on this year that we’d be enhancing our engagement in the budget process,” said Council Member Curtis Wells. “In past years the council has lacked quorums and suffered from poor attendance in many budget meetings, that is no longer the case. Secondly, the previous council budgeted for a salary survey to analyze county employee salaries on a broad scale. We received the results of this survey in the fourth quarter of this year, overlapping with the tentative budget process. The poor timing has undoubtedly added to the difficulty of the circumstances. I’ve maintained from my first council meeting that it’s important that we pay people what they’re worth. This includes factoring in total compensation, and comparison with counties that share our same size and budget.”
Swallow conducted a similar salary survey for the City of Moab last year and as a result, he said, the city increased what they pay many employees. Swallow said that he has seen similar difficulties in counties across Utah in the decades that he has been conducting job studies throughout the state.
“The [county and city] together have a captive labor market so they’re competing pretty aggressively for the same talent pool and that makes it pretty challenging especially for the counties because counties don’t have the same revenue stream that the city has and most often, and this is true just about everywhere in the state of Utah and other places, that the counties are much less capable of keeping pace in the market itself to recruit and hire,” Swallow said. “The tax base is usually less aggressive. Their constituents are generally less inclined to want to support any tax adjustments and so it’s a pretty tough arena that the elected officials have to deal with there.”
While the question remains whether the money is there for salary increases, whether or not the county decides to implement the salary survey may affect its ability to recruit qualified applicants for county jobs.
“[The salary survey] says that for a large number of people, their salary is below what they should be market-rate,” McGann said. “Some aren’t, but more are than aren’t and there is also a difference in the size of the gap. The entry-level people are closer to where they should be than our managers and heads of department, who have a larger gap. We’ve had a hard time in certain departments. A very hard time in the police department particularly, the ambulance is always trying to find people. Finding qualified applicants when our salaries are so low is difficult. People don’t apply for the job, especially if they are a professional and they can just walk over to the city and make more money. Retention is not as difficult as recruitment.”
Grand County Community Development Director Zacharia Levine has seen several programs cut from his office. A position for economic development and affordable housing were both removed from the budget.
“The budget process has been more challenging this year than in my previous years with the county,” said Levine in an email. “Department heads were asked to reduce their budgets as much as possible to free up some money for expected salary increases, but I think most department heads communicated that they could only shave so much to their already lean operations before decreasing the level of service provided to our community. And, in the end, it turned out the budget cuts did little to support the salary increases. Additionally, it has been very difficult to track multiple changes to draft budgets, justifications for certain line-item changes, and what the council really wants to see departments prioritize in 2018. Although council has the legislative responsibility and authority to approve the county’s budget, I think it is reasonable to view the budget process as a collaboration between the council and the department heads who are charged with implementing the council’s will and providing services to the public. This year, communication with staff has been inconsistent, and sometimes nonexistent. We’ll have to see where the final budget shakes out, and move forward from there. I don’t envy our council members who are grappling with all the numbers and competing interests, but no one said a representative democracy was a clean process.”
One possibility is that the county could implement salary raises only in key departments. Council Member Evan Clapper expressed his opposition to such an approach, saying that he is committed to fair wages for all departments, such as the police department or emergency medical services.
“All department heads have come to the table willing to make uncomfortable sacrifices and trim their budgets as directed by the council,” Clapper said. “This was done with the goal of working towards appropriate compensation for their employees … I’m committed to fair wages. Personally, I believe it’s wrong to give raises in one office and ignore the rest. I don’t want the quality of our services to diminish.”
The tentative budget can be seen online at www.grandcountyutah.net/AgendaCenter, as part of the council’s Dec. 5 meeting agenda. Comments can be submitted to firstname.lastname@example.org until Dec. 13.
Audit: City has excess general fund money
Moab’s annual financial audit didn’t come out quite squeaky clean — but if a city is going to find itself in technical violation of the state’s rules for municipal finances, there are worse things to be guilty of, said the city’s independent auditor in so many words when he presented his audit report to city officials on Tuesday.
“There is one finding that, to me, I don’t consider it a bad finding,” John Haderlie of the accounting firm Larson and Company said, prefacing his presentation.
The problem, basically put, is that Moab has too much money.
Utah law prohibits a municipality from accumulating more than a certain amount of money in its general fund. That amount can’t be more than 25 percent of city’s total general-fund revenue budgeted in a given fiscal year.
The idea behind the law, Haderlie said, “is driven by property taxes,” and that the state doesn’t want cities building up treasure chests of cash on the backs and wallets of taxpayers.
During the 2017 audit, the city was found to have exceeded the 25-percent limit slightly, Haderlie said.
While the city is legally bound by the rule, and therefore was technically out of compliance, Haderlie said there was an important distinction to be made — one which, from a certain perspective, could make the city’s error forgivable: Moab does not generate revenue from any property taxes whatsoever.
“Where [Moab’s money] comes from other taxes that are really beyond your control, you fall outside the spectrum,” Haderlie said.
Still, the official recommendation from auditors was that the city keep a closer eye on that general-fund balance.
City Recorder Rachel Stenta indicated that Moab does find itself in that situation from time to time, and that generally in such cases it transfers money into one of the city’s other funds, such as capital improvements.
“This year, revenues over expenditures exceeded what we thought they would,” Stenta said,
Other than that, auditors found nothing remiss.
“In all respects, you’re compliant,” Haderlie said, congratulating the city on keeping up with current laws and policies handed down by the state. “It’s a compliment to your staff that they know the changes and what [those changes] are requiring. Good job.”
From time to time, the State Auditor’s Office asks public accountants to keep an eye out for specific issues. This year, it was employee use of city-owned vehicles, or other “fringe-benefits.”
“Any time that there’s compensation, whether it’s a form of gift, cash or personal use of a vehicle, it’s taxable income that needs to be included on a W2,” Haderlie said.
The audit report also revealed that the city had improved its financial position by about $2.3 million since last year: about $510,000 in its operational funds, and $1.8 million in “business-type activities,” meaning things like utility services that the city provides.
In more absolute terms, the audit found the city as a whole to have generated a net income about $780,000 more than it did the prior year.
The Moab City Council approved the following during a meeting on Tuesday, Dec. 13:
• $16,605, already budgeted for, toward the purchase of an inflatable “obstacle course” — a Wibits Sports Modular Aquatic Play System — for the city swimming pool, to be used during “off-season” times when the pool is less utilized.
• Up to $25,000, already budgeted, for continuing work to repair areas of sidewalk concrete that have become uneven and pose tripping hazards;
• $150,000, already budgeted, for a SCADA (Supervisory Control and Data Acquisition) system for the city’s culinary water system. SCADA allows for the monitoring and control system processes through the gathering and processing of real-time data.