County Council Special Meeting Notes, Jan 9, 2025. New financial advisor, Election for Council President.
Note: Commissioners are the executives of the county and are responsible for vision and policy. The Council is in charge of the money.
“And in this corner:” Do we need a Patton (Kemp) or an Eisenhower (Huett), the Marines (Kemp) or the local community organizer (Huett)?
An interesting meeting with a few fireworks and a smart bomb or two that may be boiled down to the campaign for the election of the next Council President and the financial viability of the county.
The next Council Meeting is Jan 21, 2025 at 5:30. Should be pretty interesting. Tickets are still available (satire).
The play-by-play
This post at Brown County Matters
New Financial Advisor.
The council contracted with Reedy Financial Group, which can provide additional support to help identify the systemic improvements needed for the county to better manage our finances and budget. Kemp led this initiative. I participated in the interviews and am confident the commissioners can get the help we need to include managing capital improvements and better management reports.
The county is going through a major financial transformation. Over at least the past 10-15 years, the budget was developed with a one-year perspective. It is pretty easy to submit a balanced budget with the state: Overestimate revenues, underestimate expenses, and jump through hoops over the next year to cover needed and unplanned expenses. These could average anywhere from 400-600K per year. Over the last few years, the Rainy Day fund was reduced from around 2.5 million to as low as 70K, and money was drawn from other funds as well. This situation contributed to reducing the county’s credit rating,
As a result of COVID-19, the county received an influx of federal dollars that masked, if not exacerbated, our financial challenges.
Kemp led the charge to develop and get agreement on the following goals:
- Maintain 15% cash reserve balances
- Annual expenses not to exceed 90% of revenues
- Highway and Health Departments are required to operate within their own budgets
- Rainy day fund balance of $2.5 million
- Health fund 4700 with a reserve balance of $1 million
Capital Improvement. County elected leadership (council and commissioners) have refused in the past to develop a capital improvement plan for needed repairs and replacements. Commissioner Sanders started work on developing this plan, starting with identifying the property that we are insuring.
PLAN, WHAT PLAN? A five-year comprehensive “financial plan” was developed a few years ago (by the commissioner’s office) at the cost of 30K that sat on a shelf and, after one or two annual updates, was abandoned. I never heard it discussed at a council or commissioner meeting.
CAN YOU SPARE A DIME? The county routinely borrows money (3 million last time, 4 million last year) to cover capital improvement expenses. The debt is funded through higher property taxes, and since the tax rate remains relatively the same (referred to as tax neutral), taxpayers do not notice any changes.
POWER Corrupts. We have a one-party monopoly on political power, and the lack of competition contributed to the election of a few candidates who did not have the passion, interest, time, or insight to understand what was going on. The centralized power in the hands of the few influences who can run for office, get selected for boards and commissions, and even get a county government job. Those who go along to get along can have jobs for life and avoid being shunned or blackballed.
ELECTION – COUNCIL PRESIDENT
Jim Kemp started his term on council in 2022 and has a financial background. He may be one of the few elected officials who understand the concept of modified accruals. The county government operates on a cash (fund) accounting vs. accrual basis. Accrual basis accounting is the common method in the private sector. Modified accruals support identifying the expected expenses in the following years.
For instance, assume you have a 5-year, 500,000 contract that is payable at 100,00 a year. The budget will only show the one-year liability – not that you still have another 400K to go.
GOALS. Kemp actually identified specific financial goals in his campaign strategy. I am not aware that another councilman has ever identified a “DOCUMENTED strategy but some can talk it to death. Anecdotes and hyperbole are the strategies chosen by a few. If you are a preferred candidate of the local GOP, you get elected without breaking a sweat or being held accountable for results.
The exception to this situation would include Commissioner Ron Sanders and myself. We are definitely not on the preferred candidates list.
Kemp also developed a financial strategy for the county; No one questions his commitment, competence, and passion for getting us on solid financial ground. But we all have our downsides, and sometimes his passion can come across as anger to some. And he does tend to use more words than may be needed to make a point. If his comments were recorded and transcribed, we would have a few pretty good books on the strengths and weaknesses of our culture and our financial system and challenges.
Kemp and Huett pointed out each other’s respective strengths and weaknesses. Huett considers himself as a ‘facilitator.” He likes working quietly behind the scenes. Huett provided support (the 4th commissioner) to the commissioner’s office which did not include the participation of Commissioner Sanders. Huett was involved in the staffing changes in the commissioner’s office, highway department personnel changes, recruiting and contracting for a construction manager (owners rep), the initiation of the county comprehensive plan, and liaising with the various interest groups in the county, such as the Brown County Community Foundation. The BCCF has opted to get more involved in local politics. Kemp reinforced that these are more liaison functions and not the primary responsibility of the Council President.
These liaison activities by Huett contributed to a situation where a 2025 budget was submitted to the state before the county council voted to approve it. The lack of attention to the job also led to non-compliance with previous policies regarding the process for reviewing the timely review of the budget.
Even more concerning, end-of-year appropriations were not passed by the end of the year, which leads to the reporting of account deficits that will be an audit finding that will reflect badly on the auditor. The auditor, repeatedly called out the council for not making timely decisions that caused chaos with the financial reporting and took time away from addressing more critical needs within the office.
The Council will have a choice to make on the direction of the county in 2025. It should be a good meeting – Jan 21, 2024, 5:30-7:30.
Independent Voters of Brown County IN 