County sharpens the ax

COEUR d'ALENE — Kootenai County's budget guardians have a goal of no tax increase.

That means the ax might be swung to lop off a little meat.

Internal auditing, 19 new position requests, 12 patrol vehicles and eight other vehicles are among the items that haven't survived the cuts during the first several budget meetings over the past two months.

Finance Director Dena Darrow said commissioners will need to make about $1.4 million in additional cuts during their next three budget meetings in July if they want to meet their goal of a zero-percent tax increase proposal to take to the public hearing on Aug. 29 at 6 p.m.

"This is a long process requiring a detailed review," Darrow said.

Commissioner Chris Fillios said that when initial requests from all departments arrived on the commissioners' desks at the start of the budget process, the amount was about $17 million over last year, but when considering anticipated revenue to offset that, the amount was about $12 million.

Fillios said cutting the $100,000 request for internal auditing was one of the most painful decisions, especially in light of local fraud cases that have included the nonprofit North Idaho Housing Coalition and the cities of Coeur d’Alene and Athol. In 2011, Kootenai County discovered that an employee had embezzled almost $140,000 over 10 years.

While the county will still have the required external audits, Fillios said internal audits also make sense.

"When you're trying to keep any potential tax increase to a minimum, we're forced to make some difficult decisions," he said.

Darrow said she thinks an agency the size of the county should have an internal audit function.

"It gives assurance of internal controls surrounding the county's business processes," she said. "Internal audits identify where processes may be improved and where weaknesses exist. The result is reduced risk of loss and reduced cost of operations."

Fillios said another difficult decision was cutting a request for another attorney and legal assistant in the growing Public Defender's Office.

"If an adequate ratio of cases to attorneys is not maintained, we run the risk of a lawsuit from the ACLU (American Civil Liberties Union) or the Justice Department," he said.

Fillios said commissioners settled on 10 new patrol vehicles for the sheriff's office after 22 were requested. None were granted last year.

"We had to do something after last year," he said. "You never want to sacrifice on public safety."

Fillios said approximately every $500,000 over the previous year's budget typically represents a 1 percent tax increase. He said one of the pending matters is where the county's health insurance premiums will end up.

"We're expecting an increase and have preliminarily heard about 8 percent, so we'll consider whether to fund that out of the fund balance," he said.

Darrow said $3.4 million in capital projects and $412,000 in personnel costs are on the budget review table in July.

Fillios said it will be tough to make more than $1 million more in cuts.

"At this point, we've pretty much cut everything we can," he said. "We're just looking for scraps here and there. We have to be very careful about what else to cut because it could potentially impact funds dedicated to other purposes. If you short-change one fund to pay for another, you could run into trouble."

Fillios, who supported the 1.5 percent tax increase last year, said one school of thought says small tax hikes more often is easier to swallow for the taxpayer than taking the full 3 percent allowed by law all at once. He also said some taxing districts routinely take the full 3 percent.

Fillios said additional commercial growth is key to reducing tax increases. That's why he supported the decision last year to increase funding to Jobs Plus, the area's economic development corporation, last year from $28,000 to $50,000 and he wants to keep the level the same this year.

"Residential growth typically doesn't pay for itself," he said. "Unless we get more commercial growth, the burden will be on residential. I'm a big believer in public-private partnerships and I believe this is an example of one working."

Commissoners' budget meetings will be held on July 11 at 10 a.m., July 18 at 1:30 p.m. and July 19 at 1 p.m. Public comment is not accepted at those meetings.