WICHITA — Sedgwick County revenues dropped more than expected in April, prompting officials to begin taking cost-saving steps.
County Manager William Buchanan said Monday he hasn’t frozen any positions yet, but is making departments justify new hires.
The county also is looking at not doing some capital improvement programs it had planned, and re-bidding long-term contracts that were bid a couple of years ago to try to get better prices.
Buchanan called these measures “preliminary baby steps of financial caution.”
Losses came in 13 major sources that account for 97 percent of the county’s revenue. They were heaviest in real estate taxes. Although assessed valuations were down slightly, the drop was due to people not paying their taxes, Buchanan said.
“There’s no harm that comes to folks not paying their taxes except you owe interest at some future date. And you’re not going to get foreclosed on your property until about 3½ years after the first time you miss,” he said. “This is a business strategy some people in this community use.”
The delinquency rate normally is 2½ to 3 percent, and is about 5 percent now, he said.
Sales tax revenues also are down, as well as revenue from motor vehicle registrations, real estate transfer fees and Medicaid collections.
Sales tax revenues are up so far for May, Buchanan said, but he didn’t know if that’s a trend.
“In a one- or two-month deal you really can’t tell, so we’re just proceeding with caution,” he said.
Final May figures won’t be known until the end of the week.
County officials will hold budget hearings today and Thursday with commissioners. A recommended budget will be out in early July.
April is the first time the county has seen a decline in revenue since 2002 following the terrorist attacks. Buchanan said the county is in good financial shape with adequate reserves.
While some in the county think it can ride out the slump, Buchanan said he favors a more conservative approach.
“I don’t want to knee-jerk. I don’t think it’s time to knee jerk,” he said. “But I think it’s time to start taking some appropriate action to position ourselves in case what we’ve seen in April is the trend. We’ll know that in a month or two.
“If it is the trend, then we’ll need to step up and do some things, take some drastic looks at some of our operations.”
County officials are reviewing county services to determine costs and benefits of continuing them, he said.