County proposes to balance levels of service, reserves and tax rates for Regional Animal Services

WASHOE COUNTY NEWS RELEASE

On Sept. 27, the Washoe County Board of County Commissioners (in a 4-1 vote, Jung dissenting) directed staff to build the 2012-2013 fiscal year budget maintaining the county’s overall tax rate for services such as law enforcement, criminal justice and human services, while temporarily reducing the tax rate for animal services, by utilizing a portion of accumulated reserves in the animal services fund to help fund operations at Regional Animal Services for one year.

The proposed reduction would be included in the 2012-2013 fiscal year budget process.

The intent is to utilize some of the $5.6 million surplus in the dedicated animal services reserve account to fund a portion of the $4 million annual operating cost of Regional Animal Services. This action is similar to actions the county has taken to utilize reserves in other areas to help fund critical services during this economic recession. Animal services reserves would only be used to fund animal services operations.

Currently, Regional Animal Services utilizes license income, donations and a property tax rate of 3 cents, which together generate more revenues each year than are needed for the annual operations, leading to the surplus accumulated reserves in the animal services fund. By way of comparison, the Government Finance Officers Association recommends that up to two months working capital, or 16 percent of expenditures, be held in reserve; the animal service fund has in excess of 100 percent of expenditures in reserve.

For other county budget units, the policy is to maintain 8-10 percent in reserve. Continuing to impose the maximum rate and increasing those reserves in the current conditions means that taxpayers are being overtaxed for animal services, to the detriment of other services like law enforcement, criminal justice and human services, because the region is at the maximum allowable overlapping tax rate.

In 2002, voters approved a two-part ballot question to authorize the issuance of up to $10,750,000 of general obligation bonds to build a new animal shelter and up to 3 cents per $100 of assessed valuation for operating and maintaining the shelter and providing animal services. The County Commission issued the bonds, paid for with a .54 tax rate that is ongoing, built the shelter and imposed the maximum allowable tax rate of 3 cents for operations, allocating all the revenues to Regional Animal Services.

Ballot questions are written with this “up to” flexibility in recognition of the changing circumstances that can occur during the life of the tax (in this case 30 years). In some cases, the tax rate produces too little revenue to support the function, in which case the County Commission uses general fund resources to supplement the resources, as has been done to supplement the 1-cent voter-approved rate for senior services. In other cases, the tax rate can produce more revenue than is needed, as is currently the case in animal services.

Even with more than adequate funds in reserve, RAS continues to collect revenue annually in excess of the costs to provide animal services to the community. The proposal is to temporarily reduce the property tax dedicated to animal services from 3 cents on every $100 to 0.63 cents in fiscal year 2012-2013, and during 2012-2013, to use restricted animal services reserve funds to support animal services operations.

The property tax devoted to operations would increase back to $2.63 in fiscal year 2013-2014 and would remain there to fund a sustainable service level. The proposal does not include adjusting the property tax dedicated to paying bonds for the animal shelter. Using this plan, the county can maintain current service levels in Regional Animal Services, maintain critical public services and still preserve the same overall tax rate.

In other action, the board approved adjustments to the 2011-2012 budget for all county departments that will save $25.6 million dollars over the next two years.

The commission approved a 10 percent reduction in the animal services budget ($450,000 annually), which is consistent with reductions in many other departments to achieve sustainable service levels. By utilizing vacant positions, Regional Animal Services can achieve the budget reduction without lay-offs and not have a major impact on current service levels.

Other core departments, including roads maintenance, regional parks and open space and water resources were required to make the same 10 percent cut as animal services in order to achieve a balanced budget with sustainable service levels within available resources. The approved reductions followed a review by the board of 10 percent reduction plans prepared by all departments to redefine what services would be provided, and how they would be provided, in keeping with the county’s financial sustainability plan.

RAS currently has 33 positions (three supervisors and 30 staff) and will reduce down to 28 positions, utilizing vacancies and avoiding any lay-offs, and continuing to provide appropriate response to all calls for service. This is the first budget reduction approved for Regional Animal Services in the four years of budget cuts the County has undergone, despite significant cuts to departments that support animal services, such as finance, human resources, technology, fleet management, etc.

The budget reductions adopted for the entire county budget will result in a net loss of up to 146 positions and further reduce the operating budgets of departments by up to 10 percent. The county’s overall budget has now been reduced by a total of $161 million and 915 jobs since 2007/8.

A detailed listing of the impact of the adjustments on various departments can be found on the Washoe County website under the agenda for the Sept. 27 meeting. In addition, a frequently asked question summary is available online for the proposed animal services revenue and budget changes.

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