State action may spare county from $623K health plan expense

Columbus County commissioners voted Monday to spend more than $623,000 from fund balance to cover the increased cost of employee health insurance. However, if legislation adopted Tuesday by the General Assembly becomes law, the county won't have to draw on the fund balance after all.

The county board's vote was unanimous, with Commissioner Barbara Featherson absent from the meeting.

The fund balance essentially serves as the county's savings account.

"This money is not budgeted," said Finance Director Heather Woody in presenting the budget amendments. "This was not discussed at the time of the budget. We did not find out about this 2.4% [increase] until about two and a half weeks ago."

The state health plan insurance surcharge is based on current salaries for all county employees, whether they participate in the health insurance plan or not. Woody advised commissioners that any changes to salary going forward will affect the total amount the county pays.

Insurance funding crunch

According to Woody, the funds will be used to keep the state insurance plan afloat.

"They were going to be in the negative this year and they were going to be really in the red next year," Woody said.

County Manager Eddie Madden emphasized that although it is a major expense after the budget was adopted July 1, "there aren't very many good alternatives to the state insurance plan."

"Our only complaint here is the timing," he said. "If we'd known about it sooner, we could have adjusted."

Woody said that if the expense had been known at the time of the budget, it would have increased the property tax by 1.6 cents.

"Our main concern is fund 10," Woody said, referring to the $589,603 designated to come from general operating funds. "It's the largest amount and it will have to come from fund balance. I do not see how we can cut the budget by half a million dollars right now."

Following the county commissioners' vote Monday night, the General Assembly took action Tuesday to prevent local governments from having to pay the surcharge. A conference committee substitute for Senate Bill 449 requires the state treasurer to waive 2.4 percent of salaries when calculating required employee contributions for the Public Employee Health Benefit Fund in the current budget year. On Tuesday, the House and Senate passed the bill, which will now go to the governor.

Fund balance frustration

Commissioner Brent Watts said he was frustrated voting to withdraw money from the fund balance without knowing how much is in it.

"It's hard for me to stand up here and vote to get $500,000 out of the fund balance when I don't know what the fund balance is or where we stand with it," he said. "It don't make any sense."

Watts added that the county has been penalized for having a low fund balance while, according to Woody, also being advised not to share the balance amount regularly with commissioners.

"We're going into a fund balance and I don't know what it is," Watts said. "It's hard for me to make a decision for the taxpayers of this county when I don't know how much money we've got."

Woody told the board she was instructed by the N.C. Local Government Commission (LGC) that the fund balance fluctuates daily and "it's best not to discuss that because, as soon as I tell you what it is, it can change."

Madden noted that commissioners receive monthly reports showing total cash and investments but said it's unclear how much of that the state or auditors will deem unrestricted because the total changes regularly. "These budget amendments should have little, in my opinion, little or no effect on the unassigned portion," Madden said.

Fiscal balancing act

The LGC has additional oversight over Columbus County's budget because the county is on an LGC watch list known as the unit assistance list. Madden said the LGC liaison told him the county should come off that list this spring unless the fund balance changed significantly in fiscal year 2025. He added that the unexpected health insurance cost has more immediate effects.

"We've been working toward doing a cost-of-living increase in January," Madden said, explaining that the cost of those employee raises would be around $600,000. He also mentioned the re-evaluation of the Quick Response Vehicle (QRV) program scheduled for January. The QRV program is designed to ensure paramedic-level service is available throughout the county. "If we keep having hits like this, we're not going to be able to."

Commissioner Ricky Bullard said, "This is why we've been so tight on our spending money, so we'd be prepared for the unexpected."

"Over the years, in my experience in county government, I've learned a lot of times that we have very big disappointments that put everybody under stress," Bullard said. "We always work it out."

Commissioners take action

In other action, the board unanimously approved the amended noise ordinance. The revision allows for a violation to be issued without requiring a decibel reading.

Commissioners also approved the establishment of the Coleman Tract as a Planned Unit Development (PUD) zoning district on Dothan Road in Tabor City.

Developers had filed both the PUD plan and a traditional subdivision plan for the property. In the traditional subdivision plan, the Coleman Tract would have included 116 houses, compared to the PUD plan's 190 single-family homes plus 24 duplex units. Unlike the subdivision proposal, the approved PUD neighborhood will feature amenities including HOA-controlled maintenance of the wetland and open spaces, roads with curb and gutter, sidewalks to promote pedestrian flow and a community center for residents to use.

"Either way it's coming," said Watts. "This is my district and I want the nicest thing I can get."

A public hearing was also scheduled to discuss an amended cell tower ordinance to improve setbacks, height limits and other restrictions. The hearing is set for Nov. 3 at 6:30 p.m. in the commissioners' chambers at 127 W. Webster St., Whiteville.

Editor's note: This story was updated Tuesday evening to reflect the legislation amended in the General Assembly.