COVINGTON - With tough economic times approaching, Newton County is in good financial shape based on the county's financial report for fiscal year 2007, an auditor told the county Tuesday night.
"It's encouraging to know that we've got some good numbers. Of course, we've got to remain diligent, because this kind of thing can change at any moment," Wayne Tamplin of Treadwell, Tamplin and Co. told commissioners.
Newton County's total revenue for government and business-type activities for fiscal year 2007 was $91.5 million, according to the report. The total cost of all programs and services for the same period was $78.4 million.
Business activities generated $9 million, including $5.9 million from Newton County Water Resources and $3.1 million from Solid Waste Management. Operating expenses totaled $4.3 million for Water Resources and $4.2 million for Solid Waste Management. The solid waste fund receives an annual appropriation from the general fund to offset the shortfall between revenue and expenses, Tamplin said.
The county reported $69 million in governmental revenues: taxes, including property, sales, business and local option sales taxes, accounted for 64 percent of those revenues.
Capital grants and contributions, such as the donation of subdivision roads to the county, accounted for 15 percent. Charges for services, such as fines and regulatory and miscellaneous fees, brought in 14 percent of total revenues; followed by investment earnings at 4 percent. One percent came from operating grants and contributions, and 2 percent were classified as "other" sources.
Expenditures for governmental activities totaled $68.7 million. Public safety costs accounted for 35 percent of expenditures, while public works accounted for 34 percent, with judicial, culture and recreation, housing and development, and health and welfare accounting for the remainder.
The county closed the year with a governmental fund balance of $60.2 million, including a balance of $32.2 million in the special purpose local option sales tax fund and $14.5 million in the general fund.
The general fund closed with a 25 percent balance based on the $53 million budget the county was operating on in fiscal year 2007. Of the $14.5 million, about $2 million is encumbered for road projects, leaving the county with about $12 million in unencumbered funds, said Newton County Finance Director Marcia Allen.
A fund balance of 25 percent would allow the county to operate for two months without additional revenue coming in, according to Executive Officer John Middleton.
Middleton pointed out that the budget increased to $58 million for fiscal year 2008. The 25 percent balance is reflective of the 2007 budget only, he said.
"I think it's very fortunate that you have such a strong fund balance at this time to carry us through what may be some lean times in the next year or two," Tamplin told commissioners.
Tamplin said growth in the digest has been enough to provide the necessary funds to keep the budget in balance, adding that Newton County does not have to borrow money to operate during the year.
Other counties rely on short-term borrowing to fund operations, but Newton County only borrows for capital projects, Middleton said.
Allen said it's important to maintain a comfortable fund balance to cover months when property taxes are not coming in.
During the months of June through September, the county relies primarily on sales taxes, she said.
Tamplin reported that sales tax revenues remain on par with last year's numbers, which he said is not the case for many counties during the economic downturn.
Counties that are more dependent on sales tax revenue see a more dramatic impact when the economy takes a turn, Middleton said.
"You can live by the sales tax or die by the sales tax," said Board of Commissioners Chairman Aaron Varner, adding that the county examines sales tax revenues monthly to make sure enough is coming in to cover projects.
"If we see a train wreck coming, we try to get off the tracks," he said.
Local option sales tax revenues from fiscal year 2005 through March totaled $4.73 million, according to data provided by the county.
The county has collected $27.8 million in SPLOST revenues since fiscal year 2006. SPLOST is projected to bring in $58.8 million through 2011.
For the fiscal year beginning July 1, 2006, and ending June 30, 2007, the county's total net assets for government and business-type activities were $304.8 million, an increase of $154.6 million over the prior fiscal year.
The increase is due to a new requirement by the Governmental Accounting Standards Board that the county add roads, sidewalks and other infrastructure to its asset list.
The county has $90 million in outstanding debt, incurring $12 million in debt for bonds issued on the new administrative building during 2007.
"On the flip side, net assets increased by $12 million as well," Middleton said. "Assets replaced debt. Where you get concerned is if a government is incurring debt and not assets."
Crystal Tatum can be reached at firstname.lastname@example.org.