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Lycoming County budget: First peek shows surplus; may be deficit instead

The Lycoming County commissioners offered the Sun-Gazette a sneak peek into the county’s preliminary 2019 budget, expected to be posted for public perusal by the end of today.

The numbers they presented may change before the budget is posted or at any time over the coming weeks as the commissioners host public hearings to discuss the document before their final vote, slated for a December meeting, they said.

Securing a bond this year or next means all the difference in whether the 2019 budget shows a surplus or deficit, commissioners said.

The preliminary budget includes a $9.68 million bond floated to cover big-ticket projects in its total preliminary revenue of $113.65 million. With preliminary expenditures resting around $111.23 million, there is a resulting surplus of $2.42 million.

“That could change greatly,” said Commissioner Jack McKernan. “If we do the bond issue this year, it will go from being a surplus of $2 million to possibly a deficit of $7 million.”

A bond shows up as revenue in the budget year it is issued, but turns into an expense for the years following, Commissioner Tony Mussare explained.

“When you purchase a bond — and we will be, whether it’s this year or next year, it gets recorded as revenue for that year that you receive it,” he said. “If we purchase it now, so that we may reduce the chance of interest rates going up, and we’re thinking about that, then we make 2018 look like we had a multi-million dollar surplus — and it had nothing to do with our management of the county.”

The bond is the most likely option the commissioners will choose for handling high-dollar upcoming projects, primarily the $7.4 million radio system overhaul proposed in early October, though $9.68 million is not the guaranteed amount they may purchase.

Other time-sensitive projects the county faces include replacing its voting machines, a $2 million effort mandated by the state, and finding new office spaces for District Judge William Solomon and the coroner.

Solomon’s lease is ending, and the coroner needs more space for storage and safety reasons, the commissioners said.

For both Solomon and the coroner, the budget shows placeholders of $600,000 and $500,000 respectively for “one-time extraordinary capital investments,” should the commissioners approve purchasing or leasing new buildings for them, Commissioner Rick Mirabito said.

Something new to the 2019 budgeting process is the state Department of Community and Economic Development’s Early Intervention Program, in which the commissioners applied to participate late last year. The program helps with strategic and financial planning by comparing Lycoming County to other fifth class counties, counties with similar revenue and counties with similar populations.

The program report is in and shows the county, despite its current and impending deficits, is run well, commissioners said.

“It’s shown us that, over a five-year period, if everything is kept the same … we will be running deficits in those years — if things remain the same,” Mirabito said. “It also showed us that we’ve done a good job in the past, in terms of cutting spending.”

“It showed us that we are reducing deficits,” Mussare added. “We’re taking proper action. Overall, I believe the report says that we’re in pretty good shape, financially. We will have to make a few more adjustments over the next five years but, for the most part, they feel that it’s being run effectively and as efficiently as it can.”

The report reinforces the commissioners’ understanding that the county is in need of more economic development to build the tax base and cut taxpayers some slack — more businesses resulting in more employees and therefore more homeowners, McKernan said.

“Our commercial and residential properties, the values have been flat for the last 10 years,” he said. “Now there’s an indication we’re seeing a decrease in values. We need to get some commercial development going to get land value to go up. Hopefully, with that development, would come some additional homebuyers.”

“The end result might be the discussion of reassessment at some point down the road,” he added.

The report shows how “stagnant” the county has been, Mussare said.

“We rely heavily upon taxation, unlike many other counties,” he said. “I think the commissioners are going to be looking at economic development in a different manner. We need to bring in business, we need to bring jobs, we need to bring new buildings in order to alleviate some of the pressures of our tax.”

The commissioners hope to schedule a public meeting with some of the program officials in which the report will be explained in late November or early December, McKernan said.

Another high cost showing in the preliminary budget is for the courthouse, which is undergoing renovations on its third floor. The renovations are to allow the domestic relations department to move to the third floor, which will provide more space for it and other departments housed in the courthouse.

Domestic relations will reimburse the renovation costs with a special budget of federal dollars given as a “reward” of sorts for its accomplishments, the commissioners said.

A first reading of the preliminary budget will take place in the commissioners meeting at 10 a.m. today in Executive Plaza.

Copies of the preliminary budget will be available online at www.lyco.org and in several county offices as well as the James V. Brown Library.

The three public hearings on the budget will be held from 6 to 7:30 p.m. Nov. 8 in Executive Plaza, Nov. 13 in the Hughesville Public Library and Nov. 14 at the Jersey Shore Area Library.

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