Sure, these things can make a government sick, but they’ve always been the sort of parasites that leave their hosts diminished but never dead. Nonetheless, if you walk around the Jefferson County courthouse right now and you look in the eyes of the people who work there, you’ll see that the question stuck in my head is very much on their minds, too. These are bureaucrats and merit-system employees who’ve taken for granted that their jobs were as immovable as the building itself. They’re not used to thinking like private-sector folks who understand that a job is a perishable thing. But they’re learning, and the courthouse is now a listless place where the malaise sticks to your feet when you walk through the door.
Several county employees have asked me how much longer they could depend on their paychecks, and until this week, I didn’t have an answer. However, on Monday afternoon, that answer emerged in a third-floor courtroom.
Sheriff Mike Hale is suing to keep the Jefferson County Commission from cutting his budget. His legal team called the county’s finance director, Travis Hulsey, to the stand. There, Hulsey said what many had suspected but no one had dared say aloud. Hale’s lawyer, Rob Riley, asked him if the county had determined a date on which its bank account would be reduced to absolute zero.
Aug. 7, Hulsey said.
As of last Friday, Jefferson County had about $4.5 million in the bank. This week the revenue department is transferring about $5 million it has collected to the county, but that’s not going to be enough.
The hard facts are these. The county has $18 million per month in expenses and $8 million per month in revenue. Without immediate and drastic cuts, the county will not be able to make payroll during the first week in August. The county commission has already identified 200 positions to cut, but layoffs will probably total 1,200 jobs lost, Hulsey said Monday.
Filing for bankruptcy doesn’t fix this. When you can’t pay people, you can’t depend on them to still show up for work. What’s frightening is that no one I talk to, especially the commissioners, really knows what’s going to happen when the county’s fund balance reaches zero. Do they just turn the lights off and padlock the doors? Will we be able to flush our toilets? Will there be anybody to guard the jails?
If you were thinking about starting a meth lab in rural Jefferson County, now would be the time.
There’s talk among the legislative delegation of an 11th-hour fix. But even if the governor called a special session to reenact the county’s occupational tax, a local bill has to be advertised for three weeks before the Legislature can pass it, and passing it would take another week. The county could be dead and gone by then.
This is the sort of emergency governments are supposed to protect themselves against by preserving their savings, called “fund balance” in budget-speak. The county once hoarded as much as $400 million in fund balance, but by last week that number had dwindled to $4.5 million. County commissioners are looking at each other and wondering how this happened. I invite them to look across Linn Park at Birmingham City Hall.
There, the Birmingham City Council is confronting an uncomfortable fact. The City of Birmingham will end the 2009 fiscal year with a deficit, and it might be a deficit bigger than they initially thought.
A June 30 financial report generated from the finance department’s accounting system shows year-to-date transactions of negative $16.8 million. But there’s another number in that report that bodes badly for the city, too. Year-to-date encumbrances are $9.2 million. Encumbrances are contractual obligations the city has made but not yet paid out.
If these numbers hold up, the city could be running a deficit as large as $26 million. If that’s the case, then the city’s fund balance has already been reduced to about $91 million, and the city is already in violation of council policy that it keep three months’ operating expenses in its savings. If Mayor Larry Langford’s proposed 2010 budget is adopted, it could reduce fund balance another $26 million. If that happens, the city’s fund balance would have fallen from $117 million to $65 million in just two years.
Last week, the council asked Mayor Langford to trim his budget by $17 million. On Friday, the mayor sent the council a memo refusing to make the cuts. What’s more, he admonished the council for trying to make its own estimation of the fund balance.
Mind you, this is the same person who said years ago that the interest rate swaps with Wall Street would save Jefferson County hundreds of millions of dollars. This is the same person who presided over the county as commission president as it spent its fund balance down to nearly nothing, all the while telling us how healthy the county supposedly was. This is the same person now under indictment for those shenanigans. His finance chief at the city, Steve Sayler, is the same person who directed those bond deals and interest rate swaps at the county.
This is an uncanny moment on both sides of Linn Park. On one side, the Jefferson County Commission can look across that plaza and peer into its past. On the other side, the Birmingham City Council can look across at what could be the city’s future.
War on Dumb is a column about political culture. Write to email@example.com