Commissioners table motion to shore up account

Blount County commissioners tabled action on shoring up the workers compensation and general liability bank account that is $900,000 in the red.

The 14-6 decision to table the decision on moving almost $1 million into the account was made after more than an hour of debate during the Tuesday commission agenda meeting. This was the third time County finance director Steve Jennings had broached the subject of moving $900,000 from the general fund into the General Liability/Workers’ Compensation account.

Jennings made his request during the agenda meeting in hopes of getting the item moved to the agenda for the regularly scheduled April 21 commission meeting. He explained that because the county is self-insured, the Highway, Schools and General County departments each deposit amounts into the internal service funds for health, workers’ compensation and general liability funds to cover expenditures.

“It’s a holding account, and you pay claims from that holding account,” he said.

Jennings said there was $3.5 million in the account for health insurance claims, which is a million more than initially requested but that amount grew because of fewer claims than average. The finance director cautioned against putting less into the account for health just because it has been a good year so far. “We’ve had a very good start but in my opinion, it is not sustainable,” he said. “It is good we have $4 million, but I wouldn’t be surprised if we had some catastrophic claim.”

Jennings reiterated that in the workers’ compensation and general liability headings, the news wasn’t as good. The amounts for general liability and workers’ compensation were in the positive until the past few years. As revenues declined, less money was put into those accounts, he said.

“During 2005 and 06, my predecessor chose to charge less and less per fund. As revenues were reduced and expenditures increased, that turned the line, and we finished last year in a deficit of $300,000,” Jennings said. State auditors said we must get this in the black by increasing revenues or decreasing expenditures. We’ll spend about $1.6 million this year and only bring in less than $1 million,” he said.

Jennings asked the commissioners for a budget amendment to move to the regular commission meeting for this fiscal year requesting $900,000 be moved to the fund to cover workers compensation and general liability claims. It would amount to $450,000 from the general county fund, $360,000 from the schools and $90,000 from the highway department.

“We have about 150 total claims. An estimate by third party administrators is that by the time we settle these claims, we’ll spend $1.8 million,” he said, noting that the fund only has $900,000 in it to cover those expenses. “My plan to rectify this problem and keep the county from having an audit is to have a budget amendment of $900,000 over a two year period to take us out of a deficit and into a positive,” he said.

Jennings said he would ask the school board to approve their amount. They tabled the motion at their last meeting in order to see first what the commission would do.

Commissioner Gary Farmer questioned whether the commission could approve an amendment for the schools when the school board hadn’t approved it yet. “I don’t think we have right to vote on something the school board has not voted on,” he said.

Commissioner Ron French asked Jennings why, if the county is more than $1 million above what it should have in the health fund, why couldn’t the commissioners transfer funds from that fund to cover General Liability and Workers’ compensation claims.

“You charge each fund (General County, Highway and Education) for health insurance so you can pay health claims and charge each for worker’s compensation and general liability claims,” Jennings said. “Financial rules say you can’t use one to pay for the other.”

Jennings said he is simply trying to put cash where it needs to be in case workers’ compensation and general liability claims are made.

“The problem is we do not have the current level of funding to cover our current level of spending to keep internal service funds adequately funded. Our tax rate is too low to support our current spending. Moving these in, it properly puts pressure on officials to reduce cost, or it puts pressure on commissioners to increase taxes,” Jennings said. “That’s an objective analysis.”

Commissioner Scott Helton made the motion to table this measure to the June work session. “The buck stops with us no matter what they decide. We’ve been down this road, not this full body, but members of this body who were here last year. We voted for the budget without taking into account how we were going to generate the money. Everybody is sitting here saying we know we need the money,” he said. “At this point, I make the motion we defer action on this, that we table this to the June work session.”

Commissioners Tanya Burchfield, Tab Burkhalter, Jim Folts, French, Mike Lewis and Kenneth Melton voted not to table the measure. Commissioners Farmer, Rick Carver, Mike Caylor, Tom Greene, Brad Harrison, Mark Hasty, Helton, Gerald Kirby, Holden Lail, Peggy Lambert, Jerome Moon, Roy Gamble, Samples and Gordon Wright voted to delay action, and it was tabled on a vote of 14-6. Monica Murrell was not present.

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