HOLLIDAYSBURG - An audit of Blair County's 2012 fiscal year showed the county used reserve funds to cover a $1.1 million deficit when expenditures exceeded revenue.
If the county continues that trend, it could deplete its reserve in a few years, auditor David Scott of Young, Oakes, Brown & Co. of Altoona told county commissioners Tuesday.
"I would have preferred that it had been a little less," Commissioner Terry Tomassetti said of the $1.1 million deficit reported in the audit. "When we budgeted, we expected a half-million deficit."
Scott identified less revenue from property taxes, due to a declining tax base, and higher operating expenses as factors contributing to the $1.1 million deficit.
While commissioners, in December, increased property taxes for 2013 by 3.5 mills and sold Valley View Home as of June 1 for $16.5 million, those factors aren't reflected in the 2012 audit.
Scott declined Tuesday to address how the sale of the home will affect the county's financial picture, but it will be covered next year in the 2013 audit.
Tomassetti said Scott's warning about the continued use of the fund balance is valid, especially as the county gets closer to the maximum 30-mill levy to support the general fund. This year's increase took the county's property tax rate to 27.495 mills.
"I think we're OK for a while, but a while cannot be quantified in a specific number of years," Tomassetti said.
While the 2012 audit showed the county with $6.9 million in reserve funds, Scott cautioned that $3.8 million of the $6.9 million is due from Valley View's operations.
Because the home has been sold, the county's only way of satisfying that obligation is to cover the $3.8 million with proceeds from the sale. While the $16.5 million deal was completed as of June 1, commissioners have not yet decided how to allocate the sale proceeds.
The audit also identified the county's shortfall toward its annual pension fund obligation of about $5 million. Years ago, the county met its annual recommended contribution, Scott said. But after several years of no contributions, commissioners started a few years ago to allocate $200,000 annually toward an obligation that's grown to about $5 million.
Tomassetti, who said after Tuesday's meeting that some of the Valley View proceeds will likely be put toward that unfunded pension obligation, referred to the current $200,000 contributions as "a finger in the dike."
Mirror Staff Writer Kay Stephens is at 946-7456.