News

County financial outlook 'serious'

Posted August 03, 2016 11:00 pm

By Randolph County Press

An already serious situation isn't going to get better anytime soon.

At the July 29 Randolph County Board of Commissioners meeting, County Treasurer Justin Jeffers gave an update on the county's tax receipts.

"We're down overall for the year," Jeffers said, noting a $700,000 difference in taxes collected at this time last year compared to this year.

The tax receipts are important as that is what fills the county's general fund. Last year at the end of July, the county's general fund had a total of $527,895.23.

This year it only has $7,898.40, a loss of $519,996.83.

In order to make up the difference and pay expenses, the county has been forced to dip into its money market accounts - with a loss of more than $1.8 million from last year.

"Our cash amount on hand has dropped tremendously," Jeffers said.

Board Chairman Marc Kienha also pointed out that the county has had to face quite a few issues this fiscal year, including flooding and the high-profile Drew Peterson trial - which have added additional costs on the county.

Investigation by the board revealed that the ongoing situation with Dynegy Midwest Generation at the Baldwin Energy Complex is drastically reducing the county's sales tax revenues.

Kiehna explained that prior to the early 1990s, lots of coal was mined and burned locally by the power plant.

But new Environmental Protection Agency (EPA) regulations required a decrease in sulfur emissions, resulting in a switch to low sulfur coal from Wyoming.

"Our coal was being displaced by Wyoming coal," Kiehna said. "But, an agreement was made to consider Randolph County as the point of sale for all coal being used by all of the Illinois power plants owned by Dynegy.

This allowed the county to receive sales tax for each ton of coal shipped into the state.

In 2014, the EPA ruled that power plants had to also reduce their mercury emissions and Dynegy changed its purchasing of coal, while investing in clean coal technologies.

Goldman Sachs provided financial backing for a firm called Clean Coal Solutions, which became the supplier for the Dynegy power plants and chemically treats the coal before it is burnt to reduce emissions.

While sales tax is still paid by Dynegy/Clean Coal Solutions to the Department of Revenue, Randolph County no longer gets the sales tax for coal used in all of Dynegy's plants.

"If coal is burnt elsewhere, that's where the sale is considered made now," Kiehna said.

This, along with a reduction in the price of coal, has created a "significant reductions" in sales tax receipts for Randolph County.

Kiehna also pointed out that with the power plant being forced to shut down two of its three units (the first will go offline Oct. 17), sales tax receipts will continue to drop.

In 2011, the county's sales tax revenue was $2,116,000. So far in 2016, the first quarter receipts came in at $213,000.

The projected total for the year is only $852,000.

"We're going to have to change the way we do things," Commissioner David Holder said. "It's really changed the ways we look at operations.

"We're studying it and trying to come up with solutions."

Holder added that this shortfall of revenue was brought on primarily by the changes at Dynegy.

"It appears they are moving ahead with mothballing the units," he said. "Where does that take Randolph County? It's hard to say."

Holder did point out that another factor contributing to the budget shortfall was the dissolving of the Illinois County Insurance Trust (ICIT).

While the county was a member of ICIT, they didn't have to pay insurance premiums, but now they do and it's around half a million per year.

"ICIT and Baldwin weren't on our radar," Holder said. "It became quite an investigation to figure out what happened.

"No one knew until after the fact and it has had a major impact on the area."

He added that in addition to the county, the Red Bud school district - which the power plant is in - will also be seeing a major impact from the changes.

Kiehna also noted that the county's budget for the year is around $6.9 million, but they are looking at having to decrease it by $1 million, or 20 percent.

"It makes it hard to do business as usual," he said. "And it's not that we've been spending badly."

Some options to consider at this point are reducing staff or reducing services offered. But Kiehna pointed out that with services, the state mandates certain services they must provide.

"It's one of those situations where we seriously have to consider what to do, looking at all options," he said.

Commissioner Ronnie White stated that the board is trying to rely on the consensus of the county's office holders on which direction to go.

"We need support from everyone so we can maintain services."

Kiehna questioned how many more employees would they have to lay off in order to save $1 million. Jeffers quickly responded with an answer of 20.

"That would cripple us," Kiehna said. "We wouldn't be able to do the mandates duties required by law.

"It's not an option."

Sheriff Shannon Wolff added that his office is already short-staffed, but they have to have staff to answer 911 calls and deputies to respond to those calls.

Kiehna stated that the county will have to increase revenue and taxes or reduce services.

"Possibly (implement) a sales tax," he said. "We don't know where we're going at this time, but we may consider putting something on the ballot (for this November).

"This is serious."

Circuit Clerk Sherry Johnson noted that previously her office had gone back to old cases to get people to pay their unpaid fines and fees. She said that they had collected quite a bit and would be doing more of that in the future.

"It won't fix things, but will help," she said.

During the public comment portion of the meeting, Bremen resident Carol Goodwin - who lives on Wine Hill Road - commented on the amount of trucks and bicyclists she sees on the road.

Goodwin expressed that she feels the bicyclists being on that road is illegal.

"There's no shoulder," she said. "This isn't a bike route. The trucks have to go into the other lane to avoid hitting them."

She also added that the road is not well maintained and expressed that she pays tax dollars for maintenance that is not being done.

White responded that the commissioners had discussed this stretch of road previously and this fall they have it slated to repair as much of it as possible.

In the courthouse renovations project, Kevin Bollman of Honeywell Business Solutions was not in attendance at the meeting, but had submitted a written update.

Included among the topics was that temporary air conditioners have been delivered, installed and are running and that asbestos removal is beginning.

"The boilers will be removed as soon as this is complete and we have been given the 'all clear,'" he wrote.

Looking ahead to November's election, County Clerk Pat Laramore presented the commissioners with the election judge lists for both parties to be approved.

Laramore noted that she does not have enough judges yet for the county and more are needed. Those wanting to be election judges should contact her office. Election judges are paid $150 for the day if they undergo training or $120 without the training.

Roundup

- County Engineer Mike Riebeling reported that the highway department has oiled two roads so far. He added that the road districts are planning on doing more roads this year as the oil prices are lower now.

- Randolph County Care Center Administrator Ken Slavens reported the Randolph County Care Center reported 62 residents. Slavens and Kiehna talked about how they met with a consultant who had looked at "every aspect of (the center's) financials" in an effort to market it better.

- General assistance at the meeting was $1,288, with administration costs at $1,487.01.

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