Sedgwick County set to run multimillion-dollar deficits through 2020, report says

Sedgwick County is projected to run multimillion-dollar deficits this year and every year through 2020, according to budget forecasts released Wednesday.

To deal with it, a majority of county commissioners expressed consensus support for privatizing more county services and putting a freeze on borrowing for road and building projects.

Based on current spending projections, the county will run a deficit of $5.1 million this year and $8 million in 2016, according to reports presented to county commissioners at their annual financial retreat meeting.

Through 2020, the county is projected to spend $37.4 million more than it brings in, based on current practices, the report said.

The county has about $73 million in reserves that can be tapped to pay the deficits.

“The good news here is we are not projecting insolvency anytime soon,” said county budget director Lindsey Poe Rousseau.

County policy is to maintain about a $40 million reserve.

Depending on how the county adjusts its spending, especially on employee raises, it will reach the minimum reserve floor between 2019 and 2020, Rousseau’s projections show.

The projections cover the county’s property tax supported funds, which include the general fund, county support for Wichita State University, Comcare mental-health services, emergency management, aging, highways, noxious weed control and bonds and interest.

Those expenditures total approximately $227 million and make up 62 percent of the county budget.

About 33 percent of the budget is funded by state and federal grants and other sources, and is handled separately.

Five percent of the budget is the county fire district, which also is separate.

Commission Chairman Richard Ranzau said in the short term he wants to relax building standards and reduce spending.

“Maybe we could change zoning regulations and increase development in the unincorporated area, which would help us overall,” he said.

Within the county government, “I think we have to look at, re-evaluate some government functions so that we can focus on our core functions – consider outsource, privatize or eliminate programs where possible,” he said.

Long-term, he wants the county to stop using bond financing to pay for roads, bridges, buildings and other capital improvements.

That, he said, would save the county money on bonded interest that could be banked to pay for future projects.

“Some people may think that’s a bad idea, but I know I’m debt-free in my personal life and you have a lot more flexibility when you’re not paying all that principal and interest,” he said.

Commissioners Karl Peterjohn and Jim Howell joined with Ranzau to express support for a ban on bonding.

The three commission conservatives also backed using some form of “zero-based budgeting.”

In that process, county departments would have to build their budgets from the ground up, without regard to what they’re spending now, and justify each expenditure along the way.

On Tuesday, County Manager William Buchanan characterized zero-base budgeting as a “fad” that was popular 20 years ago, but said he would do his homework on it and report back to the commission.

Commissioner Dave Unruh expressed reservations about the plans put forth by Ranzau, Peterjohn and Howell.

“Like everybody else around this table, I think debt’s not particularly the best thing in the world, but I also look at it as a tool,” he said. “Sometimes you use that to get where you want to go within your capabilities.

“If we’re going to go completely debt-free and a zero-based budget policy, I just need a clear understanding of what the implications of that is and how deep that’s going to cause us to have to cut,” he said. “Or what are we just going to eliminate?”

This story was originally published February 18, 2015 at 7:57 PM with the headline "Sedgwick County set to run multimillion-dollar deficits through 2020, report says."