By Chris Phillips, director of Anderson County Accounts and Budgets, and County Mayor Terry Frank
We recently finished our Popular Annual Financial Report for the fiscal year ending June 30, 2014, and we wanted to share a snapshot of Anderson County’s financial health. While there are many factors that go into evaluating our county’s overall ability to promote prosperity for the people of our county, our financial health as a county government has a direct impact on the lives of families who live here and the business and industry that operates here.
Noteworthy accomplishments from 2014:
- For the second year in a row, Anderson County qualified as a low-risk auditee instead of high-risk status.
- Fund balance policy was strengthened again, and its unassigned General Fund balance is now increased to $4 million, up from $2.5 million in 2012 and $3.5 million in 2013. Any dip into reserves below this threshold requires a supermajority vote from County Commission.
- For the year end, we increased the General Fund balance by $1,744,824 (revenues over expenditures). While 2013/2014 saw a fractional decrease in property taxes, 2014/2015 saw property taxes remain the same, with no increases. (It must be noted that some of the surplus is already dedicated to certain projects or commitments.)
- Tight spending practices helped Anderson County experience a year of surplus revenue over expenditures, and we continue to strive to limit debt. For the fiscal year ending June 30, 2014, Anderson County issued refunding bonds that lowered interest rates, saved more than $150,000 over the life of the bonds, but did not extend the maturity of the debt.
- Creation of a capital projects fund with an assigned tax rate that did not increase the overall county tax rate.
- Passage of budget without costly tax anticipation notes.
While 2014 was another year of stability and continued improvement, there are challenges on the horizon. Reappraisals are expected to note a decline in some areas. A shrinking fund balance for our school system may result in cash-flow challenges that might require tax anticipation notes in years to come. Interest on tax anticipation notes cuts into normal operational funds, and is therefore a measure we take only when there are no other options.
A major challenge has recently developed with Emergency Medical Services and will impact this year’s budget as we close out the year and move into next year. Currently, we are facing challenges with a Medicare administrative contractor and the processing of documentation related to submission of our 911 emergency calls. This processing issue has created substantial cash flow problems as the county has not received the revenue for services billed.
To alleviate the problem, EMS has worked with us on a spending freeze on all expenditures except essential equipment, supplies, and payroll. We are working closely with Senator Lamar Alexander’s office and thank them for assisting us in an effort to resolve the issues. However, in the short term, Anderson County EMS will be seeing a $600,000 to $800,000 shortfall by the end of the year, meaning Anderson County will have to address the shortfall until the issues are resolved and the revenues are finally received. To boil the issue down, the financial challenge is the result of not being paid for answering 911 calls.
Tight spending practices by your government leaders over the last few years have enabled Anderson County to build our fund balance so that we are able to weather such a storm. Prudence and fiscal discipline have enabled us to see an increase in bond ratings and climb out of our problem of limited reserves, but obviously with the challenges ahead, there is no time to rest.
As we enter the budget season, please know we will remain committed to fiscal discipline and serving Anderson County in the best, most responsible way. Anderson County is in good health, but we must stay committed. We take seriously our responsibility to manage your tax dollars.