‘Live within our means.’ Franklin County trying to avoid up to $7M budget hole
Earlier this year Franklin County leaders realized they were headed toward a major budget crisis if they didn’t begin to take action.
The projected shortfall for the county’s 2025 budget was estimated to be $3.5 million to $7 million, according to a study of the county’s finances.
This week Franklin County approved a budget that was $2 million higher than the previous year, thanks to a countywide effort, with every elected official and department chipping in to find savings and opportunities.
In addition to the savings, revenues were about $2 million higher than expected across all sales tax pools. Most municipal governments tend to estimate that income fairly conservatively, especially in years when facing economic uncertainty.
The county also managed to accomplish this without using a “road shift” which has been a source of $750,000 in additional revenue transferred from road funds.
A 3% cost of living adjustment for employees has been approved by the commissioners, but they are to come directly from department budgets.
The biggest budget increases for 2025 relate to court services.
Interim County Administrator Eric Johnson told the Herald that the success they’ve seen this budgeting cycle really has been an all-hands, across-the-board effort with every office and department pitching in.
Where did they find the cash?
The county managed to avoid its deficit crisis not by making major cuts, but by encouraging departments to restructure and reorganize in order to find efficiencies.
Off the top they saved about $1 million countywide in salary costs due to unfilled positions throughout the year. They haven’t implemented a hiring freeze yet though.
The county is only adding one full-time position for 2025, and that’s a restructuring that involves shifting their Office of Public Defense manager from a contract to a county employee.
Johnson said the departments have done a great job being fiscally responsible and recognizing the seriousness of the problem they were collectively facing.
“Kudos to the offices and departments, they were fiscally austere ... ,” he said. “It (shows) a full recognition by departments that they need to be fiscally responsible.”
Some notable revenue increases include election resources being budgeted to have increased by about $400,000. The clerk’s office will see an extra $300,000, largely from federal funding increases and passport fees.
Information services added more than $115,000 in grant funding.
The county also eliminated a handful of redundant budget pools, freeing up about $27,000.
The county is also allowing for up to $3 million in reserves spending, but Johnson said traditionally they haven’t needed to touch those funds.
“Historically the county has budgeted used of that, but like this year we’ll actually probably add $600,000 to $800,000 to that reserve,” he said.
The sheriff’s office will transfer about $1 million in excess revenue from its commissary funds to spending pools.
The county will also cut back on capital improvement projects to the tune of another $1 million.
The county has budgeted $11.8 million in property tax revenue for general fund expenditures. That’s a bit lower than last year because it doesn’t account for the $750,000 they previously took from the road shift levy.
Not all of the money from property tax will go straight into coffers though, with a significant chunk being diverted to the area’s two Tax Increment Finance Districts — Pasco’s Broadmoor development and the Port of Pasco’s Reimann Industrial Center being built around the new $600 million Darigold plant— which take incoming property tax to fund infrastructure work.
Sales tax revenue came in at $1.2 million higher than forecast, with the county’s portion of the juvenile correction facilities sales tax adding an extra half million. Other sales tax revenues increased by equal percentages, but the county only gets a portion of those pools.
“The county has a history of under projecting revenue, so revenue is actually coming in higher, and expenditures have come in under projections,” Johnson said. “You have to make sure that continues in the economic times we’re facing, it takes managing more assertively.”
Are their worries over?
While today’s budget crunch has been averted, that doesn’t mean the county can rest on its laurels.
“We’re bringing a major emphasis to live within our means as we do these restructuring and reclassifications,” Johnson told commissioners.
One initiative the county will implement is creating a countywide fleet services pool through an equipment rental and revolving fund in order to streamline fleet services and save money.
The revolving fund is a statute authorized fund that allows counties to create a self sustaining pool for fleet services and equipment rentals. The idea is that it is funded by vehicle and equipment rental income, surplus and salvage revenue and reimbursable service and material money, which is then used to pay for fleet maintenance, outside service and other needs.
Once this fund is self sustaining, it could save the county hundreds of thousands of dollars.
Commissioners are also looking to more closely integrate budget monitoring with their regular meetings.
Over the past year they’ve worked to create surplus property auction policies and have begun making changes to the county’s popular, but costly VEBA benefits program.
Already they’ve made changes to the benefits program, which sets aside cash, up to $1,600 per month in lieu of health insurance costs, for medical uses.
Changes will go into effect for non-bargaining employees next year. That group only accounts for a fraction of the county’s 300 employees though, so the real cost difference will come if they’re able to negotiate similar changes with the county’s various employee unions.
They estimate limiting those VEBA payments to a maximum of $600 per month could save the county more than $1 million annually, and keep the cost from inflating with annual insurance price increases.
The changes won’t impact the healthcare plans offered by the county, just the VEBA payments for those who decline coverage.
By far the biggest concern facing Franklin County, and every other county in Washington state, is possible implementation of new public defense caseload rules, which have the potential to more than triple the number of attorneys needed as well as require a huge amount of new other costs.
Those could begin to take effect this summer, with the full implementation reached within three years. They will essentially mean that public defenders can only take on about one-third of their current caseloads each year.
Franklin County leaders are hoping local lawmakers can convince the state Legislature to intervene. Their OPD budget will increase by about 3.5% for 2025.
Benton County is already starting to prepare for the worst though by nearly doubling their Office of Public Defense budget for their 2025-26 biennium budget.
Franklin County commissioners will also take a more intentional approach to actively managing the budget throughout the year. Traditionally finance meetings have been with just the board’s chairman checking in with departments once a month, they want to expand those to the full commission and open the discussion up to the public.
They’re tentatively planning to meet quarterly, if not monthly, to track spending and make adjustments as needed. They’ll also use these meetings to discuss whether big changes, such as hiring freezes or implementing delays to hiring and capital projects.
“The county has to actively manage its budget, they’ve got to pay attention throughout the year. Not that they weren’t, but it will be more intentional,” Johnson said. “It’s not a one time ‘adopt the budget,’ it’s a living document.”
