SHAMOKIN - Total revenue for Northumberland County in 2010 was down more than $7,000 from 2009, while expenses were reduced by approximately $3,800 over the same period, according to an audit report released Tuesday by Controller Tony Phillips.
The controller, who filed the county's single audit and audited financial statements with the Federal Audit Clearing House and the annual financial report to the state Department of Community and Economic Development, said Klacik and Associates of Shamokin and SB & Company of Philadelphia completed the audit.
Phillips said total revenue for 2010 was $52,445,215, a reduction of $7,388,035 from 2009, while total expenses were $55,272,607, a reduction of $3,854,216.
Phillips said factors for the decrease in revenue included property taxes being reduced 10.1 percent as a result of the current economic condition in central Pennsylvania, and a 12 percent reduction in grant funding to Human Services. He said the sale of Mountain View Manor also had an impact on revenues and expenses.
The controller said revenue was over budgeted by $2.2 million and expenditures were under budgeted by $300,000.
He said the general fund balance for 2010 totaled $348,402, of which $53,581 is reserved. According to the audited financial statements in 2009, the general fund had an overall fund balance of $1,327,813, of which $2,491,102 was reserved and $106,372 was designated, leaving the unreserved balance in a deficit of $1,269,813. Phillips said the 2010 fund balance represents a gain in unrestricted fund balance of $1,618,215, which was mostly from the sale of the manor.
The controller said this year the restricted portion of the fund balance that was set aside for the debt and losses incurred through the 911 center was satisfied. Phillips said for the past 15 years, this amount was held in an accounting entry and placed under the restricted fund balance. This practice allowed for an overall greater fund balance to be announced, although a large portion was not available for use.
He said, "If the county would have not opted for this straight forward approach to the financial statement, the general fund balance would have shown at approximately $3 million with approximately $2.7 million reserved."
The controller said the long-term county debt, including capital leases, as of the end of 2010 stands at $29.4 million in principle, down from $31.95 million in 2009. This represents a decrease of $2.55 million. Approximately $3.6 million of debt was refinanced at a lower rate for 2010, Phillips said. The debt service fund currently has a fund balance of $14,857,996, all of which is reserved to fund the long-term debt payments. This number is bolstered by a $9,504,691 long-term note receivable related to the sale of the manor, according to Phillips.
The controller said the general fund was required to transfer out $3.63 million to other county funds as required matches or to compensate for losses in that fund.
He said the county reduced its number of findings from 18 in 2009 to two in 2010.
Going forward
"Northumberland County is being impacted by the overall state of the economy in Pennsylvania," Phillips said. "As the economy is slow to improve, the county will be faced with more and more significant financial issues."
He added, "The unreserved fund balance has ended 2010 in the black for the first time since 2007, but due to factors such as declining tax revenues and declining grant funding, it will be hard pressed to stay there. As I have said in the past, it is my opinion that in 2011, the general fund will deplete its current fund balance, leaving the county with a substantial operating loss. This will make the 2012 budget challenging because it will be starting from a deficit."
Phillips commended the commissioners for putting cost-saving issues into place that will have a positive impact on the county finances over time.
He said the county will soon be experiencing a cash flow issue due to the over budgeting of revenue in 2010, timing on reimbursement from the state and the sale of the manor.
"After speaking with the auditors and county chief financial officer, I was pleased with the decision to satisfy the debt and loss incurred by the 911 center, giving the taxpayer a more straight forward picture of Northumberland County's finances," he said.