Here is an edited version of the report of the Butler County 2008 Budget Advisory Committee that was presented Wednesday to the county commissioners.

The committee was picked by the commissioners to make recommendations about county spending and where it might be reduced. The county budget is $185.3 million for this year.

Committee members are: Bill McCarrier, chairman; John Bonando; Jim Hackbart; Bill Patterson; Jack Beiler; John Cranmer, and Jerry Andree.

Observations• The committee noted the county primarily relies on the real estate property tax to generate the revenue for the county's general fund budget. That tax is based on 75 percent of the 1969 values of real estate. The revenue generated from one mill increases about 2.3 percent a year. This equates to three-tenths of 1 percent of the value of new construction.• One mill of real estate tax generates $1.2 million, thus the 2.5 mil increase will provide $3 million of additional revenue. The average cost of that 2.5 mil increase will be $37.50 annually for the average residential property owner.• The 2008 real estate tax levy will place the county at the maximum levy for general fund purposes.• The general fund has been growing in excess of 4.5 percent a year.• The county has been using the fund balance, or unobligated cash reserves, to offset the difference between revenue and expenses, resulting in deficit spending for several years. The fund balance has been reduced by about $7 million over several years.• Nearly 80 percent of the general fund departmental budgets are composed of wages and benefits.• About 50 percent of the general fund is for prison, public safety and courts, where the commissioners have limited ability to manage costs.• The financial condition leading up to the real estate tax increase for 2008 did not happen in one year but was the result of years of growing differences between revenue and expenses and often unclear lines of responsibilities and accountabilities. Accordingly, it will take significant time, resources, and expertise to improve the process to address financial pressures facing the county.

Short-term recommendations • The commissioners should begin developing alternatives to reduce and/or share health care costs with its employees. They should also review other components of the collective bargaining agreements, including the definition of work hours to exclude paid lunch, increasing the working hours from its current 36-hour work week, overtime and scheduling procedures, and pensions.• Request an across-the-organization one percent reduction in nonpersonnel operating expenses in the general fund and the Sunnyview Home budget. The results of this reduction should go in a contingency account for any unexpected expenses.• Eliminate providing standard county employee benefits to appointed outside solicitors in the elected row offices.• Eliminate providing overtime compensation payments for employees who are exempt employees under the Fair Labor Standards Act, provided that such practice is not controlled by the collective bargaining agreements.• Review the various fees and charges levied by the departments and row offices to assure that they are covering the costs of those services.• In the area of contributions, it is recommended the commissioners fund the following activities/organizations: Flood Control Authority, Airport Authority, Butler County Community College, Federated Library, Agricultural Extension Service, Southwest Pennsylvania Corporation, Growth Alliance, Butler County Council of Governments, Community Development Corporation of Butler County and the Farmland Preservation Program

Long-term recommendations• The commissioners should review its management structure to assure clear accountability and responsibility for all revenue generation and expense management, which will include but is not limited to:• A strategy for long-term employee health care and pension costs.• Improved budget format that allows for improved decision making by the commissioners, such as eliminating or reducing the use of contingency or miscellaneous line items and focusing more on program costs and performance.• Eliminate the practice of including those expenditures that the county is obligated to fund, such as Butler County Community College, from a category called contributions. Reduce the size of the contributions category to those items that are truly discretionary and implement a process of a clear understanding that these are a one-time allocation. Those allocations that result in a multiyear obligation should be incorporated into the operating budget and monitored for performance. The contributions category should be limited to one-time, allocations.• Implement a clear policy on fees and charges and how much of the costs associated with that program or service should be covered by user fees.• Review the practice of allowing funds to accumulate in the general fund over years for a specific purpose, which appears to inflate the general fund. A clear purpose of those funds should be provided along with a timeline to complete the project for which those funds are being accumulated.• Implement an employee compensation review that will result in a clearly understood plan for all eligible employees.• The commissioners should consult with the Governor's Center for Local Government Service to determine the center's willingness to provide the professional and funding resources for portions of this strategic review.• The commissioners should initiate a review of options available to establish real estate tax levies. It could include:• Increasing the property assessment rate from 75 percent to 100 percent of 1969 values. This would mandate a reduction in the millage rate at all levels of local government. Such an adjustment also would allow municipalities that are at their maximum millage to lower their levies.• Evaluating a separate real tax levy for permissible activities, such as BC3 and the library system, thereby reducing the general fund levy proportionally.• The commissioners should initiate an analysis of the long-term role of the county in the operation of Sunnyview Home. This analysis should include all options from continuing county involvement to eliminating county support.• The county should continue its efforts to find more efficient ways to collect the real estate tax, as demonstrated by the majority of municipalities now using the same tax card system for billing both county and municipal tax levies.

ConclusionThe advisory committee would not serve the best interests of the county by simply recommending additional one-time cuts in expenditures. The best long-term solution is for the county to consider both the short-term and the long-term recommendations.