SUNBURY - Northumberland County cut over $1.9 million in expenses in 2012, according to a preliminary financial report given by Controller Tony Phillips during Tuesday's commissioners' meeting.
Phillips said the majority of the savings were made through tax collections, personnel cuts, elimination of the transportation and central purchasing departments, a reduction of rental costs by moving county offices from the American Legion building in Sunbury to other facilities, and the installation of a new voice-over Internet phone system.
He said the savings were initiated by the prior and current board of commissioners.
The controller said the general fund showed an operating surplus of $304,000. As per the 2012 budget, $175,000 was transferred from the sale of Mountain View Manor, which is currently part of the debt service account.
He said the general fund also transferred out $3.87 million to supplement the operations of the human services agencies and other non general fund departments. Comparing 2011 to 2012, general fund expenses and transfers combined were reduced by over $1.9 million. He said the general fund's overall deficit has now been reduced to $1.6 million.
Phillips said the county collected over $14.1 million in combined 2012 taxes (real estate, debt service and per capita), which is an approximate increase of $1.3 million from 2011. The county tax collectors had an average collection rate of 92.7 percent. He said $1.1 million of 2012 county taxes were left uncollected, causing a shortfall in the budget of $279,000.
The county also collected almost $980,000 in prior year taxes.
During 2012, Phillips said the county issued a bond for $5.2 million to rectify a cash flow issue. He said the issuance of the bond did not contribute to the operating surplus in 2012 and no funds were borrowed from debt service after the issuance. All prior debts between the general fund and debt service have been satisfied, according to Phillips.
A second bond was issued for $1.8 million to begin the 911 radio project.
In 2011, the county was not able to make its $1.3 million contribution to the retirement fund because the general fund had expended all its cash by the end of the year. That payment was made in 2012, Phillip said.
In addition, the county made its 2012 retirement contribution, which totaled $806,725, on a quarterly basis. "As of the end of 2012, this contribution has been paid in full," he said. "The retirement fund stood at $73.69 million at the close of 2012."
The controller said the debt service ended 2012 with a cash balance of $3.31 million. He said the debt service account also will receive an additional $8.3 million over the next eight years from the sale of Mountain View Manor.
As of Dec. 31, he said the county's outstanding bond debt principal stood at $30.99 million, which will be paid by the year 2026. As additional bonds are issued to complete the 911 radio project, the debt service will need to be monitored and adjusted to bear that additional debt burden, Phillips said.
At the meeting, Phillips stated, "The county no longer is lost in the woods financially, but we aren't out of the woods."
In a press release issued to the media prior to the meeting, the controller said, "The county was able to operate within budget in 2012 and posted at an operating surplus for only the second time since 2006. The county finances are pointed in the right direction, but remain in a very fragile state. The county faces challenges in the future when you combine the economic condition of the area with upcoming issues such as the 911 project and an aging prison. Fiscal restraint must continue throughout 2013 and for the future for this positive trend to continue. The deficit that had been amassed in 2011 has been reduced slightly and will need to be continually addressed as it does negatively affect the county's credit rating, which impacts interest rates as well as possible grant funding."