The overriding theme at this year’s Coos County budget hearings was the lamenting by departments over their lack of fiscal control; due to accelerating mandated personnel costs.
For good reason. Within the General Fund; Personnel Costs are up $1.092 million or 7.6% over last year; with Public Employees Retirement System costs (PERS) up $410,000 or 18%.
But it gets worse. Over the past five years the county General Fund Personnel Costs have increased $3.7 million or 31%; with PERS up $987,000 or 59%, and Insurance $747,000 or 37%. Most of this increase is due to underfunding of PERS, and Union contracts.
To further illustrate the point, in 2014-2015 personnel costs represented 52% of the General Fund budget; for 2019-2020 it represents 62%. Each years increase are compounded upon each prior year, so subsequent years will see this margin widen.
Even should the Jordan Cove project (JCP) come to realization; the monies received by the Coos County Board of Commissioners (BOC) will not cover those increased levels should they continue to reoccur. In fact, for this year’s budget the projected $2 million JCP yearly payout would have covered just half of the added personnel costs arising over the past five years.
The Bandon Dunes Assessment funds which are dedicated to support the Sheriff’s department; will this year be exceeded by the accumulated employee raises conferred over the past 3 years. The BOC is on the hook for the additional monies going forward.
At some point the situation will have to be addressed. Historically this has been through layoffs, shortening of hours, or freezing pay and/or benefits. Some local governments are now resorting to filling positions with temporary staff; eliminating them from PERS and insurance obligations. Nationwide; governments’ contract with private companies who provide corresponding services; such as payroll, accounting, roads, etc.
What to do? The BOC has done a good job by holding the overall cost increase during the five-year period to approximately 9%, and further acknowledged these spending levels are unsustainable; but provides no guidance on how they intended to proceed.
If nothing is done; continued drawdowns on the forestry, solid waste and parks funds; which now finance this shortfall, will leave them depleted. At that point the BOC will be forced to sell assets or raise taxes.