Some of Butler County’s reserves dwindled in 2012.

The unrestricted fund balance dropped from $708,364 in 2011 to zero last year.

County Controller Jack McMillin, who presented the data in the recently released Comprehensive Annual Financial Report, said that fund should maintain at least 5 percent of the operating budget.

The county general fund, which pays for daily government operations, was set at $51 million in 2011 and nearly $54 million in 2012.

“There’s no cushion,” McMillin said.

He said although the county wasn’t left completely dry with operational and capital reserves totaling $2.5 million, that money is reserved for specific categories of expenses.

McMillin said two factors were major contributors to the county’s dwindling unrestricted reserves.

He cited the slowing growth in the southwest portion of the county as being the first component.

“The party’s over,” McMillin said.

He attributed the once-burgeoning tax revenue for filling county coffers, which then led to a second problem: increased spending.

“If government gets their hands on money, they figure out a way to spend it,” McMillin said.

He said much of that added revenue in the mid-1990s went for increasing personnel in such areas as court services and human services.

The 2013 county budget covers 767 full-time employees and 111 part-timers.

According to McMillin, there were roughly 100 new workers hired by the county between 2000 and 2008, helping cause expenses to rise an average of 10 percent each year.

The commissioners in late 2008 set a hiring freeze on all nonessential personnel.

McMillin said the county now has to pay for a larger staff with less revenue.

“The county is going to have tight budgets in the years ahead,” he said. “It’s going to force a little more discretion. That’s not necessarily a bad thing.”

County Commissioner Dale Pinkerton disagreed the size of the staff is an issue.

“I think our county is low-staffed as any county in the state,” Pinkerton said.

He said there are instances in which the county should add personnel.

“It’s a very difficult line to walk,” Pinkerton said.

Commissioner Jim Eckstein agreed with McMillin that the size of county staff is a concern.

“We absolutely have to keep new hires to a minimum,” Eckstein said.

He said tax hikes could be minimized or averted while maintaining an unrestricted fund balance.

“We have not truly addressed making cuts,” Eckstein said.

He said issues such as employee health care costs can’t be ignored. Earlier this year, Eckstein proposed a larger employee contribution than the current 1.5 percent for nonunion workers.

McMillin said the smaller reserve means the county accrues less interest.

Commissioner Bill McCarrier agreed the lack of an unrestricted fund balance should be addressed.

“I agree the fund balance is too low,” McCarrier said. “We have to work on getting it up.”

He said the county drew on those reserves to help stave off or minimize property tax hikes.

“Our budget is balanced,” McCarrier said.

McMillin said keeping too much money in reserve can be problematic, too.

“When you get beyond that, you invite frivolous spending,” McMillin said.