Banker offers tips on county budget crisis
by PHILLIP WILLIAMS
Jun 20, 2013 | 1301 views | 0 0 comments | 72 72 recommendations | email to a friend | print
Jim Ragland, a Gilmer resident with a long background in the banking industry, presented the Upshur County Libertarian Party recently with a proposal which he expects the County Commissioners Court to consider for solving the county’s financial woes.

Ragland’s plan calls for decreasing employees’ benefits, but also giving them a pay raise, and for retaining the current tax rate, which county officials had indicated would be lowered this year after it was raised last year. He said his plan would provide a net savings of at least $545,712 to be applied to the shortfall during the first year of benefit reductions.

HIs proposal comes in the wake of the county recently slicing nearly $1 million from its budget in the middle of its fiscal year after learning that County Auditor Janice Tucker was projecting a $995,000 negative bank balance by the fiscal year’s end on Sept. 30.

County officials differ on who was responsible for the shortfall, as County Judge Dean Fowler and Ms. Tucker have basically blamed each other, while some commissioners have criticized Ms. Tucker and County Treasurer Myra Harris, who have defended themselves.

County Pct. 2 Comm. Cole Hefner and Pct. 3 Comm. Frank Berka told The Mirror this week they had given Ragland some data which is public information, and Ragland told the Libertarians on Tuesday he had e-mailed his proposal to Berka that day. Hefner, who said he knew Ragland from their work together in the Gilmer Rotary Club, said the veteran banker contacted him when news of the shortfall became public.

Hefner said Wednesday he could not comment on Ragland’s plan until he sees it. Berka said he had seen the plan, but needed more time to analyze it, and that he expected at least part of it to be presented to the court at some point.

Ragland told the Libertarians he would not personally present the proposal to the court at a meeting.

Ragland, who is risk management officer for Texas National Bank in Longview and a former Gilmer banker, told the group he had proposed reducing employee benefits because the court has “cut everywhere else.”

He proposed that county employees begin paying a substantially higher portion of the cost of their health insurance through the county, and that the county lower its contribution to employees’ retirement plan, but that the court give “good” 4 percent across-the-board raises, plus an additional $150,000 for merit raises to selected individuals. (County employees have had no raise in about seven years.)

The county is paying $1,871,000 per fiscal year to cover workers and their families on health insurance, said Ragland. He said about 171 of the county’s average 176 employees have their families enrolled in that plan, and that an employee pays $168 monthly for coverage, while the county pays the other $912 of his/her $1,080 premium.

He proposed that next year, employees pay half, or $540, of their monthly cost, thus reducing the county’s share of insurance expenses to $935,712. He additionally recommended that the following fiscal year, the employees begin paying 75 percent of the cost, which he said could increase the county’s savings to $1.4 million.

The longtime banker said he also proposed county officials save $385,200 when they “dig into their (employee) retirement plan. I have never seen a retirement plan like this one.”

He said that as a credit analyst, what “jumped off the page” at him from the 286-page county budget was a $2.2 million liability shortfall if every county worker who is vested or partly vested were to retire. (In a printed summary of his plan given The Mirror, Ragland said this “unfunded retirement liability” was “not shown as a liability in financial statements.”)

Currently, Ragland told the Libertarians, county workers put seven percent of their paychecks toward retirement, and the county matches that 2-1, or 14 percent of a salary. The worker’s and county’s combined contribution of 21 percent of a salary is just under the maximum allowed by federal law, he said.

Ragland proposed lowering the seven percent to the state minimum of four, and the county’s match from 2-1 to 1-1. He asserted that would lower the county’s annual retirement-related cost from the current $696,000 to $310,800.

The “worst case” savings from his proposals, he told the Libertarians, would be $935,712 annually. When the cost of the four percent pay raises and the $150,000 in merit raises is deducted from that, he said, the net savings would still total the aforementioned $545,712.

“They (commissioners) could spend it on road and bridge” work, Ragland said. He also said his proposals would save sufficient money to fund some programs that have been cut, and to cure the shortfall.

Ragland also said that to balance a budget, “you got to increase revenues and decrease expenses.” Trying only one of the two “historically” hasn’t worked, he argued.

Thus, he said the tax hike which the court approved last year would take care of the needed revenues, and that if the court embranced some of his proposals, he would not vote to reduce the tax rate back to the prior year’s level as county officials originally planned.

Upshur County Libertarian Chairman Vance Lowry, Ragland’s neighbor who introduced the speaker, asked him if the shortfall was an “accounting error,” or if something “nefarious” might be found “down the line.” Ragland replied he didn’t know, and had said earlier he didn’t know who caused the problem.

He strongly praised the current Commissioners Court, saying it was “almost willing to commit political suicide for the good of the county.” He noted that the only person now on the 5-member court who was there when the “shortfall really started” was County Judge Dean Fowler, and “This court, I admire them for their ability to see what needs to be done.”

Two of the court’s five current members, Berka and Pct. 4 Comm. Paula Gentry, took office only in January, after the court set the tax rate for the current fiscal year.
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