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County CAFR reflects thriving government

By Leslee Kulba –

Removed from the Buncombe County Commissioners’ agenda Tuesday was consideration of the Comprehensive Annual Financial Report for FY 2011-2012. Both CAFR’s and budgets tend to disappoint citizens seeking transparency, as they feature line items of at least six digits framed by chamber of commerce factoids. Typically, any numbers appearing out of alignment represent only restructurings or new methods of accounting. Activists seeking waste, fraud, and abuse need look elsewhere. While no indication is given of the success or profligacy of government activities, a few items are of interest.

For example, it is taken for granted that economic development is a proper role of government. The CAFR boasts the contributions of Buncombe County taxpayers toward the recruitment of Linamar, and the New Belgium and Sierra Nevada brewing companies to the area. Without mentioning expenditures, the document claims the Economic Development Commission, since 1994, has assisted firms in investing $1.2 billion in capital improvements and creating 10,000 jobs.

Another bragging point is the $12,960,000 in Project Development Financing (PDF) bonds the county gambled to create the Woodfin Downtown District. PDF’s were once known as TIF’s, until the Randy Parton Theatre gave them a bad name. The bonds are to be repaid off the taxes on the improved property. TIF’s were all the rage before the housing bubble squelched construction. At least Buncombe County had the foresight to build a minimum assessment into the agreement.

While private-sector construction screeched to a near halt, government was able to take advantage of low financing rates to create public-sector construction jobs. At the close of the last fiscal year, the county was involved in seventeen construction projects, representing an investment of $75,921,411. These consisted primarily of renovations to county buildings downtown and work on landfills.

Through the recession, Buncombe County has managed to maintain a strong fund balance of at least 15 percent of expenditures. In the last eighteen years, the county has had to dip into its fund balance only once, in 2002. At the end of FY 2011-2012, the county had a fund balance of $50.2 million, or 19.7 percent. This could be viewed as either fiscal conservatism or taxpayer deprivation. Either way, Standard and Poor’s liked it enough to upgrade the county’s bond rating from AA+ to AAA.

A hot topic these days is unfunded liabilities. The CAFR explicitly states that more than one post-employment benefit program is not funded. To pool risk, the county contributes to North Carolina’s Local Government Employees’ Retirement System. Unfortunately, this is a defined benefit pension plan, the kind of plan that, as opposed to defined contribution plans, have gutted the budgets of municipalities that are now on the verge of bankruptcy. Unlike these mismanaged local governments, Buncombe County at least requires employees to work for twenty years before they can be eligible for post-employment healthcare.

Disturbingly, services for physical and mental health, education, and recreation are now considered proper roles of government. Worse, these activities are heavily subsidized by federal taxing, borrowing, and printing.

The last few pages of the CAFR list state and federal subsidies. Unfortunately, the line items are vague with only captions and five- or six-digit amounts. For example, the Department of Homeland Security granted the county just over $97,000 each for Emergency Management Performance, a WNC Search Exercise, Urban Search and Rescue, Domestic Preparedness, a State Homeland Security Program, Voluntary Training and Exercise, and a Buffer Zone Protection Plan. An appeal to staff reports provided with the commissioners’ meeting agendas will not reveal much more.

Oddly, federal grants are all just under a magical $100,000 ceiling. Many of the awards are, by fiat or design, wedges driven into the traditional institution of families. There are programs to help single moms with housing, or to help them with childcare while they finish high school. Like the proverbial ambulance in the valley in lieu of a guardrail on the hill, the county administers funding for HIV and other STD’s. The needs of a society without a moral compass are great; unfortunately, providing greater comforts for those who break with tradition to explore taboos begs an avalanche of values. Fortunately, the $93,217 in Family Planning Services Title X funds may not be used for abortions.

Since people like to mistake the federal government for God these days, it is only appropriate that it giveth and that it taketh away. The worst challenge cited in preparing the current year’s budget was “the loss of around $2.5 million in federal funding for mandated social services, new federal requirements resulting from the Affordable Care Act.”

Another apt aphorism would be, “As above, so below.” Just as the federal government is taking over private-sector enterprise, Buncombe County government is seeping into the marketplace by forging partnerships to “build capacity.” An alliance with the Western Highlands Authority for containing county costs for mental healthcare is one cause for celebration.

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