Cash crunch leads to county spending caution
Commissioners are encouraging Wadena County department heads to eliminate or delay spending for the time being.
The payment of $293,744.50 to meet solvency requirements for South Country Health Alliance in May is the primary reason why the county is screening expenditures, according to county officials. A second, equal payment is due in November.
"We were blind-sided," said County Human Resources Consultant Mike Gibson.
The county did not anticipate the expense, he said. Now the county needs to build up its reserves and earn interest, Gibson said.
SCHA was intended to become the primary provider of health care services for most public clients in the county. Wadena County joined effective Jan. 1, 2007.
The usage of insurance was greater than anticipated, Gibson said. The state told SCHA its resources were low and it needed to build its reserves.
At the Sept. 25 county board meeting, Wadena County Auditor/Treasurer Char West recommended commissioners put a defined freeze on spending due to the county's cash balance. There are expenses that have to be made, but the county should look at anything that can be curtailed for now, she said.
The county is also awaiting the results of the state audit, Gibson said.
Gibson and Commissioner Dave Schermerhorn met with department heads on Monday, Gibson said. They were extremely cooperative in trying to trim back as much as possible. They plan to get together each month to see what can be trimmed, he said.
The county board's efforts to trim spending extends to wage negotiations, Gibson said. Commissioners want to freeze everything including step and longevity increases.
It's going to be very difficult for at least one year, he said.