WINNSBORO – Fairfield County staff say they’ve potentially found up to $750,000 in debt collection revenue that could help plug a $3.5 million deficit in the proposed 2022 budget.
At a budget meeting Tuesday, County Administrator Jason Taylor reported the former Fairfield Community Hospital still owes the county about $1.26 million.
Up to half, or about $750,000, may be recoverable, he said.
“We funded the hospital for many, many years,” Taylor said. “Some of the times, the county just gave the hospital money to operate. Other times, the money was not deemed a gift, but a loan.”
Councilman Clarence Gilbert, a former hospital board member, said he’s had some very productive discussions with the hospital’s governing board about repayment of the loan.
Gilbert said while the hospital cannot make a lump sum payment, it’s open to committing to a monthly repayment program.
“It’s time for them to scratch our back, and they are open to it,” Gilbert said. “They are open to making this a win-win situation for both of us.”
Gilbert said he planned to continue holding discussions with the hospital’s board prior to the county’s next budget meeting.
Budget Cuts
In his budget letter to council earlier this month, Taylor said the budget in its current form remains balanced though he said he couldn’t endorse it because the fiscal plan relies, once again, on raiding reserves to cover the $3.5 million shortfall, something Taylor has warned council about in the past.
“I cannot recommend that the budget be passed by council in its present form,” Taylor said.
Council chairman Moses Bell stated that only in recent years has the county resorted to utilizing the fund balance to balance the budget, noting that almost no fund balance was used in 2014.
Taylor said that is not the case.
“Council has pulled from the fund balance for at least 20 years,” Taylor said. “That’s how the budget has been balanced almost every single year. To fund everything council has wanted to fund, that’s how it’s been done over the years. So when V.C. Summer happened three years ago, it brought into reality that we cannot budget like that.”
As an example, Taylor said he proposed cutting sheriff’s cars last year.
“It ended up with all of them voted in when we couldn’t afford it,” he said.
Taylor said there has not been any interest in cutting back.
Hit hard by V.C. Summer
As with last year, Fairfield County is feeling pinched by the cessation of construction activity at the V.C. Summer nuclear site as well as the company’s transfer of millions of dollars of previously taxable equipment from the failed site to the untaxable publicly held Santee Cooper.
“All that helped set up the perfect storm,” Taylor said.
Taylor estimated the abandonment of work at V.C. Summer will cost Fairfield about $3 million in lost tax revenue. Similar losses occurred last budget year, necessitating the county to rely on reserves to balance the budget, Taylor said.
The ask is for a 10-15% budget reduction this year.
“The budget presented has been stripped of almost all operating capital expenditures and pared down in recurring operating cost,” Taylor said. “While the county may get by one year not funding capital needs, those needs will have to be funded in coming years.“
Possible Tax Increase
Comptroller Anne Bass said the county is also facing rising costs tied to insurance, employee retirement and worker’s compensation. She said the county isn’t filling open positions.
“Although we’re cutting expenses as much as we can, there are some things that increased that we don’t have a lot of control over,” Bass said.
Tuesday night’s budget proposal reduces budget cuts from about $2.5 million to $2.15 million. A millage increase is still being proposed to cover the bulk of the rest.
Some council members have eyed cutting employee positions or furloughing employees for a week this year instead of using the fund balance to cover the shortfall.
In response to council member questions, staff said that any layoffs would likely impact three main departments – public works, building maintenance and recreation.
Taylor said most other county departments consist of one or two people, making those positions difficult to cut.
“You’re getting to the point where services are going to be affected,” he said.
The council has also resisted raising taxes, though staff said a millage increase may be inevitable if the county doesn’t dip into the fund balance.
Cuts for All but One Outside Agency
The latest budget draft reduces outside agency funding cuts from $574,599 to $179,880, with most agencies’ funding reduced 30 percent from last year.
An exception was made for Fairfield Behavior Health, which Bell insisted “got hit hard,” without explaining how other than to say the agency had at least one layoff. Fairfield Behavior Health will receive the same $62,944 that it received last year.
As council members look to trim costs, expenses are rising elsewhere.
MZI Penalties
At a special meeting before the work session, council voted unanimously to cover the cost of a change order for a switchgear for 9-1-1 in the MZI building in the amount of $57,500. It was stated, however, that the county owes more than $36,000 in penalties associated with construction delays at Mt. Zion. About $1,600 in penalties continue to accrue daily due to change orders delays in the amount of $293,408.26.
When asked about the rising costs of penalties, Bell offered no solutions.
“Our hope is to not have to pay these charges that accrued in the beginning and we’re going to try to work through that,” he said.
Other Options
Councilwoman Shirley Greene inquired about the status of federal relief money.
County officials have previously said the county would likely qualify for up to $4.2 million through the $1.9 trillion COVID-19 rescue package President Joe Biden recently signed into law.
The availability of that money still remains in doubt. Additionally, it’s not known whether any payout only covers future expenses or whether it would be retroactive to March 2020, when the coronavirus pandemic first surged in the U.S., said Anne Bass, the county’s comptroller.
“All I’m hearing – I participated in a call last week – it was kind of a repeat that they still haven’t developed the guidance fully yet,” Bass said. “With the CARES Act grant, it was all reimbursement. If we have to submit for reimbursement, it may that we don’t get the full amount.”
Councilman Mikel Trapp asked whether funds from the county’s recent sale of a spec building could help cover the shortfall.
Bass said she wasn’t sure. She said the spec building had grant money tied to it, so the county would have to review its contracts to determine what funds could or couldn’t be diverted.
The council plans to hold another budget work session on Wednesday, April 21. Prior to the budget talks, a report from the Mt. Zion ad hoc committee is also tentatively planned.
Why did you choose to redo Mt. Zion INSTEAD of using the county building where the Sheriffs Dept. is located? It’s is decent shape and would cost FAR less to revamp if needed. Now there are penalties pending for change orders for one reason or another, like Oh,” I changed my mind on what I need.” If it were YOUR money it would have been handled differently. BUT it’s OUR money! Now you are talking about taking MORE of OUR money in higher millage rates. I haven’t lived here long but I see a big problem here with thievery. Whether its all the food from Wendy’s being stolen, more merchandise being stolen out the back then is being sold out the front of Walmart OR County Council wasting it in unnecessary spending. If I had known this was the way of life here I would have gone to Newberry, SC.