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Final county budget adjusts for pandemic

Final county budget adjusts for pandemic

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Nannini Administration Building

ELKO – Elko County’s final budget for the upcoming fiscal year continues a hiring freeze and spending cutbacks started in early April due to expected financial hits from the COVID-19 pandemic, but the total impact is still a mystery.

“Obviously, when this COVID-19 situation hit us, we jerked the reins back pretty quickly,” Commissioner Delmo Andreozzi said at the county’s May 20 meeting.

Sales tax revenue reports coming from the state are two months behind, so just how much lower sales tax collections were during the pandemic shutdown will be discovered later, and Elko County Assistant County Manager and Chief Financial Officer Cash Minor said he expects the county can “more than likely” relook at the budget Oct. 1.

“My hope is that with the mining activity in the county” the hit to revenue “won’t be as drastic as in some counties,” he said.

Commissioner Jon Karr said that maybe with the businesses such as Home Depot open during the pandemic and the amount of purchases in Elko by the area gold mines, the drop in sales tax revenues “won’t be as bad as we think.”

The budget for the combined county funds falls $26.55 million short of anticipated revenue, but an ending fund balance of $32.88 million for the 2019-20 fiscal year covers the deficit and leaves a $6.23 million ending fund balance for the 2020-2021 fiscal year.

Higher expenditures include nearly $22.07 million for general government, compared with $12.44 million in the current fiscal year; $16.13 million for judicial, compared with $13.77 million this fiscal year; $17.2 million for public safety, compared with $14.83 million this year; and nearly $15.27 million for public works, compared with $10.22 million.

Expenditures also include $1.17 million for health, compared with $1.31 million in the 2019-2020 fiscal year; $4.06 million for welfare, up from $3.28 million this year; $2.28 million for culture and recreation, compared with $2.39 million in the current year; $440,256 for community support, down from $461,787; intergovernmental expenditures, $952,849, down from $977,689; and $948,550 for contingencies, compared with zero in the current fiscal year.

Budget message

The message that accompanies the final budget that will be submitted to the Nevada Department of Taxation states that “due to the unknown impacts of the current COVID-19 pandemic, Elko County has reduced projected revenues received from the Department of taxation in an attempt to mitigate the economic effects of the crisis.

“Ad valorem revenue is budgeted at 94% of state projections, and consolidated tax is budgeted at 90% of state projections,” the message says. The consolidated tax is the sales tax.

“In addition, to offset the potential impacts of the COVID-19 pandemic, we have instituted a hiring freeze, a current year spending freeze on capital and non-essential services and supplies. The freeze for hiring and capital spending will continue into the budget year until such time as the economic effects of the pandemic can be assessed. A 10% reduction to services and supplies spending has also been instituted for departments in the operating funds of the county,” the message continues.

Minor told commissioners there is no money in the budget for any department requests, and he said at the subsequent meeting of the Elko County Board of Fire Commissioners that there are no raises in any county department budgets nor in the fire protection district budget.

He told commissioners in April when the preliminary budget was approved that no layoffs were anticipated.

The budget anticipates 338.5 county employees in the upcoming fiscal year, up from 320.24 employees this year. One of the jumps will be in the transit system, because the county is taking over the bus system from a contractor, going from one to 11 employees.

There also will be five more employees in public safety for a total of 102.5. Public safety was exempt from the hiring freeze. Public safety employees totaled 113.5 in the 2018-2019 fiscal year and 97.07 this fiscal year. The judicial branch also will gain employees, going from 106 to 112 with judicial changes, including adding a third district court. Culture and recreation employees drop from 22 to 16.5, however.

The budget shows that the population of the county is expected to be 55,116 people by the end of the 2021 fiscal year, according to the state Department of Taxation, and the tax rate for county property owners will be 0.8386% of assessed valuation in the upcoming fiscal year, the same as this year.

The total assessed valuation of the county for the current fiscal year is nearly $2.19 billion, and the estimate for the 2020-2021 fiscal year is up 7.39% to nearly $2.31 billion, according to the final budget.

Along with approving the county budget on May 20, commissioners approved separate budgets for Jackpot, Jarbidge, Montello and Mountain City. Minor said Jackpot, which relies on revenue from hotels and casinos, is taking a budget hit and could even have to temporarily shut down the recreation center.

Fire district budget

Commissioners acting as the Elko County Board of Fire Commissioners approved a budget for the fire district on May 20, but there was an element of mystery in that budget, as well.

The fire district budget is in two parts, the operating fund and an emergency fund, with revenue for the operating fund at $3.25 million, expenses at $3.68 million, a carryover of $831,259 from the current year and a projected ending fund balance of $398,254. That is 11.77% rather than the preferred 16.67%.

This compares with $4.58 million in revenues and $4.3 million in expenses for the current fiscal year.

The goal for the emergency fund is to bring the total to $1 million, so there is a $300,000 transfer budgeted from the operating fund. The beginning fund balance is $700,000 for the new fiscal year, according to the budget.

The fire district, however, will not know the results of arbitration in the contract dispute with the firefighters’ union for some time because the session planned for the end of March was put off due to the pandemic.

“We’re trying to establish a meeting in September,” Minor said.

The International Association of Fire Fighters Local 5046 asked for raises, but he said the only pay increases in the budget are steps for longevity. If arbitration leads to pay hikes, Minor estimated the cost at $110,000.

If arbitration requires the fire district to pay retroactive overtime over three years in addition to the 3% pay increase, Minor said he does not have an estimate for what that would cost. He said, however, that if the county loses on the requested overtime policy changes, then the planned $300,000 transfer to the emergency fund could be reduced.

The fire commissioners also do not know what revenue will come in from the Wildland Fire Protection Plan, which reimburses the fire district for help in range fires on government-managed land. The amount was roughly $90,000 last year but $460,000 the prior year.

Andreozzi suggested the fire district estimate an amount for the budget like the county does for the PILT (payments in lieu of taxes) federal funds that come to the county each year before knowing the amount “instead of a guess going forward.”

Minor said he could put in a number, and probably $100,000 would be close most years, and there could be budget adjustments later.

“We don’t want to budget for $460,000 and get $90,000,” said Commissioner Rex Steninger.

This is the first time the fire district has an entirely separate budget now that the county has pulled the fire district into a stand-alone entity and has been completing an agreement with the county on services. The separation followed union complaints to the state about county commissioners not meeting as the fire district board under its own agenda.

The fire district was formed in 2015 to take over from the Nevada Division of Forestry, and the county later established a 26-cent property tax to support the district.

The valuation for the fire district for the 2020-2021 fiscal year is $1.22 billion, up 3.97% from $1.17 billion for the current fiscal year, according to the budget.

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