County budget might bust $100 million

COEUR d'ALENE — Kootenai County's proposed budget includes a 3 percent property tax hike and will likely top $100 million for the first time.

The public hearing on the fiscal 2020 proposal will be at 6 p.m. Aug. 29 at the Administration Building.

County commissioners have met with department heads for the past three months to hear budget requests and have made about $19 million in cuts to balance the proposed budget.

"There will always be competing demands for the budget," County Clerk Jim Brannon said Monday.

"Commissioners have to weigh what's best for the citizens and provide the services that we are required to do. They have a tough job."

Taxing entities are allowed to increase property taxes up to 3 percent per year. If the hike is approved, it will generate about $1.4 million. The county is only a portion of residents' overall tax obligation, which also includes applicable city, school, highway and fire district taxes.

Commissioner Bill Brooks said that while tax increases never look good politically, he thinks it’s the right thing to do this year, especially after 1.5 percent tax increases the previous two years.

"We're one of the fastest growing counties in the country," he said. "If we don't use the tax money responsibly or collect enough tax money, we'll fall further behind in terms of infrastructure. It's like not doing maintenance on your house. Pretty soon you'll have a bunch of deferred maintenance that will cost you a lot of money."

Commissioner Chris Fillios agreed.

"If we don't maintain a fund balance, how are we going to keep building new buildings without going to forgone taxes or to the voters for a bond?" Fillios said.

The budget includes $5 million for a new building on the county's downtown campus to relieve crowded departments.

While dipping into the county's forgone tax balance for the upcoming budget was discussed, the budget draft does not contain forgone tax revenue.

According to state law, counties, cities, fire districts and other local taxing districts may increase their property tax collections up to 3 percent a year, plus property taxes for annexations or new buildings built within the past year. Taxing districts can choose to not collect the entire 3 percent. The uncollected amount is considered “forgone.”

Employee retention and recruitment for county employees has been widely discussed in recent years, and $2.1 million in salary increases is included in the budget proposal.

A wage study will be discussed at 2 p.m. Wednesday at the Administration Building before specifics on salary increase proposals are finalized. A final budget presentation will be at 9 a.m. Friday at the Administration Building.

The plan would make Sheriff's Office wages more competitive with Coeur d'Alene in hopes of reducing the number of county employees leaving for other jurisdictions.

The starting wage for an entry-level patrol deputy, for example, would increase to $23.06 from $21.10 per hour.

Undersheriff Dan Mattos said Sheriff's Office leaders appreciate the proposed step to make salaries competitive with Coeur d'Alene.

"To the board's credit, they have taken steps toward addressing pay inequities that will move our pay problems in a positive direction, though there is still work to be done to ensure that we remain competitive in our market and correct pay disparities that still exist," Mattos said. "The question that plagues all of us at this point is how to fund future services, pay and equipment and not create an unfair tax burden for our citizens."

Brooks said the increase proposals are warranted. He said a Coeur d'Alene city official recently thanked him and the county tongue-in-cheek for funding the training for employees only to have them land at the city after a relatively short stay at the county.

"He said, 'You find them, you vet them, you train them — and we take them,'" Brooks said. "That's got to stop.

"Some people in the county are well-paid, a few are overpaid and many need an adjustment."

Commissioner Leslie Duncan said there would be challenges implementing all of the increases in one year, so she suggested an across-the-board 3 percent hike this year.

"This would help cover some of the increases employees now have to pay due to significant increases in medical costs," she said. "Then next year address the positions that are underpaid to the point where we are unable to hire qualified candidates to provide mandated services.

"When the state requires the county provide certain services, I think it is crucial to provide the best service at the lowest cost."

Under the budget plan, salary increases for county managers would be capped at 5 percent.

A flat 3 percent increase totaling $20,834 is planned for the county's nine elected officials. That’s far below the number based on the wage study; $168,045 in increases is recommended to bring elected officials' earnings competitive with similar-sized counties in the region.

The last time most elected officials saw a pay increase was 2013 at 2.5 percent.

The assessor and treasurer received a 2.47 percent pay increase in 2012, so they didn’t receive the increase in 2013.

Fillios said the salary increases are slated to take effect in January instead of October, so that should ease the burden to the budget.

He said he doesn't support a blanket increase countywide because all the wage studies that the county has had done in recent years suggest the county is falling further behind the competitive curve for retaining employees.

Other proposed budget items include:

- nine new positions, including three for district court, totaling $890,000;

- replacing 25 Sheriff's Office vehicles, $700,000;

- information technology, $500,000;

- medical insurance increase, $450,000;

- Coeur d'Alene Economic Development Corporation, $50,000;

and

- $238,000 in increases to the state retirement system.

Items that were requested but didn't make the budget cut included:

- justice parking lot resurfacing, $282,000;

- coroner's lab, $545,000;

- internal auditing, $100,000; and

- 20 positions.

Duncan said the internal audit was more critical than the support for the EDC.

The county will still have its required external audits.

"With the budget close to $100 million next year, an organization this size could reduce risk with an internal audit function," she said.

"I continually hear from citizens that we are growing too fast, yet the county is using tax dollars to further that growth. Since our labor pool is shallow right now, those additional industries will have to bring in labor who need housing and schools."

However, Fillios supported the economic development expenditure proposal. He said most of the growth has been with seniors.

"The problem is that they are not the job creators," he said. "If we don't have job growth, then we are not attracting a younger demographic."