The Shelby County board held their monthly meeting on Wednesday, March 8th in the Shelbyville City Council Chambers.

One of the first items of business was the audited financial report for fiscal year ending August 31, 2005.

Auditor Hope Brown of the Accounting Firm, Mose, Yockey, Brown and Kull presented that report to the board.

“There are basically three components of the audit,” Brown told the board. “There is the financial part of the audit, then we look at your income and controls over financial reporting and compliance with laws, regulations and grant agreements and then the third part is federal compliance.”

When Brown was finished with her report, Board Chairman George Frazier talked about the general fund.

“If you look at the fund balance of August 31, 2005 that shows a balance of $3,077,497 and if you look at that, you would say the county is in excellent shape,” said Frazier.

Then Frazier pointed out the auditors put the 1,922,775 from the capital improvement fund in with the general fund for accounting purposes. The board does not include the capital improvement fund in the general fund as capital improvement money is set aside for capital improvements such as the new roof that must be put on the jail. Frazier went on to say when you remove the capital improvement fund and compare apples to apples there is a $708,698 deficit.

“First glance at the audit, it appears that the general fund is in excellent shape, in actuality we are incurring massive deficits there, that by the end of this fiscal year we might have to look for ways to remedy that deficit,” said Frazier. “Be advised, our financial picture as I see it, is not as good as I would like to see it.”

Frazier said the obvious problem is expenses are more than the income. With a decline in property tax revenues, sales tax revenues, and income tax revenues combined with Property Tax Extension Law Limit (PTELL) the county does not make enough money to pay their bills.

“We now have the full weight of tax caps and it is devastating.” said Frazier.

Frazier and the board then talked about the proposal to increase the sales tax by a half percent. They are referring to the public safety tax that will appear on the March 21st primary election ballot.

“Worst case scenario, the county may be faced with the prospect of reducing staff (especially if the public safety tax fails),” continued Frazier.

Frazier went on to say if the county reduces staff, that would mean the sheriff would be forced to reduce the number of patrol deputies.

“We have eleven of them now, (over the road deputies) if we have to reduce four or five of those to make up for this deficit, that will leave us with not enough over the road deputies to cover the county and also this massive lake area with 3.5 million visitors that we have to provide protection to,” warned Frazier. “We cannot cover this county and provide adequate protection to our tax payers, much less the 3.5 million visitors with that kind of staff.”

Frazier told the board the retail safety tax will give the county an “opportunity to get some revenue from those 3.5 million visitors to the lake.

Right now we provide the free service and they take advantage of it without compensating the county for it.”

Frazier said the public safety sales tax referendum will not solve all the financial problems of the county but will go along way to help ease them.

He talked about the looming problem of the power plants tax issue.

“We also have another problem that we are going to have to be repaying taxes to power plants,” Frazier told the board. “We don’t have the money on hand, we haven’t saved back the money from what we received to repay them plus five percent interest.”

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