Summary of County Debt Position
Upon taking office on January 7, 2008, the Washo & O’Brien Administration (the “Administration”) discovered a significant budget deficit looming in 2009 due to the fact that the County’s debt service more than doubled from $8,342,000 in 2003 to an anticipated $18,843,000 in 2009. The increased deficit equated to an annual debt service payment increase of $10,501,000.
As part of the Administration’s debt reduction initiative, a full-scale debt restructuring plan was implemented reducing the 2009 debt service to $15,622,327.
Financial Policies of Lackawanna County for 2009
In 2009, the Administration will continue to follow its primary financial policy articulated in 2008, which is demonstrating fiscal responsibility, restraint and management when facing the county’s financial challenges. The county will continue to find ways to increase fees where appropriate and reduce non-personnel and personnel-related expenses.
The Administration will continue to follow a financial policy focused on streamlining county government by reducing non-personnel related expenses and reducing the size of the county workforce to the extent such reductions are prudent. Personnel-related expenses (salaries, wages and health care) comprise 60.5% of the 2009 general funds budget. The Administration will continue to hold the line on expenses and enforce a non-essential employee hiring freeze to limit the expansion of county government.
The Administration will continue to increase county efforts to provide residents of Lackawanna County with a robust arts and cultural environment and improve parks and recreational opportunities for our residents to enjoy. The Administration will also focus on overcoming the constant challenge of county government, which is doing more with less. The Administration is committed to establishment of a better county delivery system for services. Over the next several years, the county will provide residents with the opportunity to access county services: (1) in their homes via an expansive, redesigned, transaction-based website; (2) in their communities via community centers housing human service outreach offices; and (3) in downtown Scranton via a one-stop shop for county services in a Government Gateway Center.
Important Features of the Budget
The 2009 general funds budget includes no tax increase.
The increased debt service payment, along with the continual increase in health care costs, reduction in revenue due to economic conditions and other economic factors contributed to a significant budget shortfall for 2009 of $12,874,000. The important features of the 2009 budget include: (1) no tax increase; (2) a reduction in force; (3) one-time revenue sources utilized to offset expenses; and (4) elimination of county position vacancies.
Reasons for Major Financial Policy, Expenditure & Revenue Changes from 2008 Budget
As indicated above, the Administration will continue to follow its primary financial policy articulated in 2008, which is demonstrating fiscal responsibility, restraint and management when facing the county’s financial challenges.
The human services area will continue to be a hallmark of the services offered by county government. In addition to human services, emergency response, the court system and other vital functions performed by county government will comprise the majority of the county’s 2009 expenditures.
With a turbulent national economy, the county anticipates a reduction in collectible revenue in 2009 coupled with increased expenses in health care and non-personnel related expenses.
The 2009 general funds budget totals $86,191,237. The 2009 capital budget totals $13,671,350. The 2009 special purpose funds budgets total $79,089,339.
This Budget Message is respectfully submitted this 15th day of October 2008 pursuant to Section 1.12-1203 of the Lackawanna County Home Rule Charter.