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County given clean financial health

December 6, 2010

More than $1 million in budgetary cuts this year gave Catawba County a clean bill of financial health during tough economic times, according to the county's annual financial report.
Certified public accountants Martin Starnes & Associates conducted the annual audit of the county's 2009-10 financial position and presented the findings Monday to the Board of Commissioners at its scheduled meeting.
The audit considers the county's overall financial health, as well as its use of federal and state dollars.
"There were no questioned costs as a result of the audit of the county's federal and state programs," said Bryan Starnes, Martin Starnes & Associates partner, who presented the audit's findings Monday. "The Catawba County Board of Commissioners, management and staff should be commended for their proactive response to adverse economic conditions."
Starnes said the county maintained its financial position, despite a difficult economy, through conservative budgeting and proactive responses to decreasing county revenue.
The county's clean audit opinion, however, didn't come without a multi-million dollar revenue loss and financial cutbacks.
Overall county revenues decreased $5.9 million in FY 2009-10, including a 0.21 percent decrease in property tax revenues.
"Sales tax revenues continued to decline at year-end as the local effects of the economy continued to translate into reduced retail sales in the county," said Rodney Miller, Catawba County finance director. "Fortunately, the decline was less than the previous year, when it was down by 10.9 percent, giving hope that the bottom has been reached in the economic decline."
Property tax collection rates, however, increased by 0.03 percent for FY 2009-10. During the fiscal year, the county collected about $84.7 million in property tax revenue.
About 47 percent of tax dollars are spent on county services, such as public safety, social services, public heath and recreation. The remaining 53 percent is spent on education, according to the county's annual financial report.
County spending decreased in FY 2009-10 overall as departments spent less than budgeted, Miller said. The decrease also includes a 2 percent reduction in operating costs for all departments and school systems in spring 2010. The cuts totaled about $1.5 million to make up for revenue losses.
The spring 2010 cuts were made in addition to cuts in March 2009, in which county departments, with the exception of schools and outside agencies, were asked to reduce their budgets by 2 percent.
Additional budget cuts from July to November 2009 removed about $5.5 million more.
The budget crunch also impacted county jobs, with about 39 full-time equivalent positions cut in the last fiscal year through a reduction in hours or the position being frozen, Miller said.
Other measures to offset costs included reduction of training and travel costs, delay or cancellation of capital projects and utilizing the fund balance.
The county also has about $117 million in outstanding debt, which includes bonds, installment purchases, certificates of participation and capitalized leases. About 82 percent of that debt comes from education; 11 percent from public safety jail expansion; 6 percent from water and sewer projects; and 1 percent from technology.
The Board of Commissioners voted Monday to accept the FY 2009-10 audit, and chairwoman Kitty Barnes noted the importance of an audit in the county's financial health.
"Many counties in the state have been in a real pinch because they didn't pay attention to the audit," she said.
Miller said transparency to the public is important to the county, and the finance department created its annual financial highlights for FY 2009-10 for the public to ensure they understand where and how their money is being spent.

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