By Billy Davis

Panola County government, staring down a second year of projected shortfalls, could eat into its cash reserves in the new fiscal year, Panola County’s administrator said last week.

Supervisors meet today at 4 p.m. with the stated intention to whittle a projected shortfall of $799,884. Just how much whittling is coming is still unknown – supervisors have not said publicly how much they want to cut the proposed budget.

The projected shortfall comes from Administrator Kelley Magee’s estimation that county government will bring in $10.2 million next year and spend $11 million.

The financial outlook is serious but not terrible. The county’s reserves currently total $4.5 million, acting as an emergency fund for county government. And Magee is known for using conservative numbers, calculating expenditures high and revenues low.

That method worked well in 2008, when a projected shortfall of $454,548 ended with a surplus of $234,294.

Panola government is on track to do the same in the current fiscal year. The expected shortfall this year is $568,000, but August figures show expenditures are $458,506 below budget, $29,460 less than the previous year.

“I feel like we’re going to make it this year,” Magee said. “I’d rather have no shortfall, of course, but the revenues are just not there.”

Magee said last week that county government, already weathering the sour economy, can limp through the coming fiscal year if supervisors cut the projected $800,000 shortfall by $232,000. That would bring the shortfall to $568,000 for the second year in a row.

To do that, however, supervisors have to cut. And cut. If cuts aren’t made, county government may dip into its reserves, which Magee wants to leave untouched.

“What I want the supervisors to know is, if they stay at $799,000, they may go into their reserves,” Magee told The Panolian last week.

Some points in the proposed 2010-2011 budget include:

•The budget includes a $50 monthly raise for full-time employees, the first raise in two years. The raise is estimated to cost $73,943.

•It includes one-time expenditures of $70,000 for the November 2 General Election and $50,000 to pay costs of redistricting.  

•The budget includes $216,000 for equipment purchases, which Magee considers a cushion that is rarely touched by department heads.

That figure could drop to $131,000 if interim Sheriff Otis Griffin uses $85,000 in seized funds to purchase patrol cars and radios.  

Magee is pressing supervisors to ask Griffin to use his seized funds, which would trim the $85,000 from the proposed budget.  

Magee acknowledged that the county had run into a little luck in 2008, when an insurance company refunded the county $165,000 for overpayment. Without that one-time payment, the county surplus of $234,296 drops to $69,294 to end 2008-2009.

County government is set to enjoy a similar surprise this year. Magee has advised supervisors that more than $241,000 has come from three non-budgeted items: a hospital settlement ($161,530), the sale of Turner Street property in Batesville ($42,000), and a smaller overpayment of $37,701 from the same insurance company.

The Board of Supervisors, so far, has yet to demand cuts to department budgets or even discuss as a board what the final budget numbers should reflect.

At an August 19 budget meeting last week, Supervisor James Birge attempted to close the meeting to the public, to go into executive session, but the suggestion was ruled illegal because budget meetings are open.

Magee conferred with board attorney Bill McKenzie – he does not attend budget meetings – and returned to the boardroom with his advice.  

“Budget items do not fall under executive session,” Magee reported.

“It’s not to discuss the budget,” Birge replied. “It’s to discuss employees.”

The meeting resumed in the open to discuss the sheriff’s budget, and supervisors kept the topics to general conversation.

“You’ve got to consider the cuts we made last year,” board president Gary Thompson, recalling similar difficulties, told his colleagues.

Supervisor Bubba Waldrup suggested Magee “run the numbers” after Griffin announced cuts to his $2.9 million budget. The sheriff’s cuts were said to total about $23,000.

The budget meeting ended when Magee, after explaining the need to whittle the budget, asked for direction.  “How much do you want me to come down?” she asked.

She never got an answer.

Reached after the budget meeting, Thompson said he planned to poll other supervisors, and review the paperwork Magee had provided to supervisors, before he returned for today’s meeting.

 “I personally don’t know where to find $200,000,” he said.