Past as well as future spending was on the minds of Houston County commissioners at their regular meeting on Oct. 16.

Carla Blahnik of the state auditor's office gave the board an exit interview on the 2011 audit. "The county did receive an unqualified opinion, that's the highest opinion that you can get," she said in opening remarks.

The County Fund Balance, which had dropped to slightly over two months worth of expenditures after floods in 2007-08, has now recovered to a (state-recommended) five-month cushion, Blahnik reported.

Over the same timeframe, total net assets jumped from $65,111,158 to $75,351,418. That's primarily because of the addition of the Justice Center.

Revenues from taxes have risen from $5,454,795 in 2006 to $8,927,986 in 2011. Intergovernmental revenues during those years rose from $8,755,677 to $13,142,576, showing spikes in years when flood relief entered the county, as well as when more highway projects were funded, Blahnik said.

In 2010, over $1 million more in intergovernmental payments were received than in 2011. Expenditures rose from $17,974,525 in 2006 to $32,577,620 in 2011.

Blahnik said that 2010-11 included much higher than normal capital outlay expenditures because of the Justice Center construction ($8,033,885 in 2010 and $7,776,556 in 2011).

Blahnik also reported several findings.

"We're recommending that the county establish and have control processes over the financial statement preparation.

"Also, due to the limited number of office personnel within the county, we know that segregation of duties of the accounting functions is impossible in small county offices.

"We just want the county to be aware of that. They don't have the segregation of duties that we like to see."

Information Technology came next. "The county doesn't have documented policies relating to certain IT items such as security, operation development, termination of employees, risk assessment, email and encryption methods," she said.

"IT is such a vital part of the county that we're recommending that policies and procedures be established and communicated to staff.

"We noted that the finance director performs the IT security function for the county. We find that that is an incompatible duty with their finance functions. It provides the director unlimited access to the IT system to make changes to the accounting records that may or may not be authorized.

"It makes it a little bit more difficult to determine if she's getting into things that she shouldn't be getting into."

Blahnik had no findings on federal awards or legal compliance, but repeated a request that her office has made in the past - that the county establish a disaster recovery plan.

Schulte talks budget concerns

Later in the meeting, resident Chuck Schulte of Caledonia addressed commissioners on future spending, asking that the county reduce its budget by 5 percent for each of the next three years. That would return spending to approximately $25 million per year, he said.

"If you take Houston County and divide your 2012 proposed budget into the square miles we have, it works out to over $50,000 in taxes and spending per square mile. That's an astonishing number," Schulte said.

County auditor Char Meiners stated after the meeting that the $50,000 figure would include the entire budget. The proposed tax levy would divide up as $17,154 per square mile and is based on property values and the resulting tax capacity.

"We need to curb our spending. In the last 10 years, we have lost almost the population of Brownsville and Eitzen (countywide)," Schulte said, adding that residents don't have the resources to support continued spending increases.

"The towns are not growing, and we now have 30,000 less acres in crop production than we had in 1992."

Chairman Jack Miller said that roughly 26 percent of the county's budget goes to support the Justice Center when bond payments, staff and other costs are totaled.

"It's a fixed expense whether it was over-built or not," he noted. "That's not going to go away. We're not going to close the Justice Center or stop plowing snow."

Schulte said that county's employee wages and benefits average $59,694 per person.

"I want to know where I can go in Brownsville or Houston and get that kind of pay," he stated.

"You can't keep raising pay packages while the people behind you are going more and more onto assistance."

"People in business are saying, 'We are not going to do any more building. We are not going to do any more expanding. We're just sick of paying taxes.'

"They even said I could mention their names. I've got three or four projects on the drawing board, but I'm not going to be building. I'm not going to pay the taxes. I have no idea what I'm going to do.

"On the course we're set on right now, taxes will double in 10 years."

"Your management plan is flawed," Schulte said of budgeting planning where departments bring requests to the board for approval.

The county board should set the amount each department will have to work with, and leave it to staff to stay within that budget, he added.

When asked for suggestions on how to save, Schulte said the Community Services (Meyer) Building should be sold, as well as a 22-acre parcel that was purchased as a future building site for a new Highway Department headquarters/shop.

"This is the most neglected building that I've ever seen," Schulte said of the current highway shop, and it should be brought up to par as far as maintenance, which would save greatly on heating bills.

That would also negate any plans to build a new multi-million dollar shop in the future, he added later.

The Sheriff's Department budget should be cut and "race car" squads replaced with cheaper "off-the-street" autos.

"I know there's room to cut these budgets. Why does the county need three 4-wheel drive club cab pickups?" he asked commissioners.

"Sometimes, I think the taxpayer is badly represented," Schulte concluded, adding that he is neither a Republican nor a Democrat.

"You've made some points," Miller said. "You're welcome to attend any budget meetings. I'd be happy to sit down with you or anybody you reference and discuss specifics.

"I don't think there is anybody sitting here that thinks we can just keep taxing more. That's not the approach, but there are realities out there that we have to face, too.

"We need citizens like you that are involved."

The Houston County Board of Commissioners is holding a special meeting at 1 p.m. on Wednesday, Oct. 24, in the Commissioners Room at the Historic Courthouse for the purpose of reviewing the 2012-13 budget.