The La Paz County Supervisors approved hiring an outside firm to assist with reducing the negative fund balance in the county’s general fund and preparing the county’s budget for the next two fiscal years. The Pun (pronounced “Poon”) Group Accountants & Advisors was hired at the May 17 Board of Supervisors meeting.
County Administrator Megan Spielman said they have a two –year contract, and they will receive $75,300 for the first year and $77,800 for the second year.
The county is addressing a shortfall in the general fund. It’s estimated that, by the start of the new fiscal year on July 1, it could be over $4 million. A workgroup has been established among county department heads to look at ways of reducing and eliminating the shortfall.
Spielman said one of the Pun Group’s areas of expertise is assisting local governments that are having problems with their finances. The group that will be working with La Paz County is headed by Vanessa Burke, a former Chief Financial Officer for the City of Stockton, Calif.
The Pun Group is based in Santa Ana, Calif. On their website, they list municipal and county governments among their areas of accounting and financial expertise. Among the services they offer to local governments are financial condition analysis, budget preparation, and turnaround and restructuring options.
A statement on their website said the Pun Group was involved with two major California cities that underwent Chapter 9 restructuring. That is the second of the U.S. Bankruptcy Code that applies to municipal governments.
“Through our careful, comprehensive approach, we were able to navigate the entire scope of complex issues during the time of bankruptcy,” the statement on the website read.
The negative balance in the general fund was reported to the Board of Supervisors April 19 by two consultants working to prepare for the county’s audit: Jay Parke, CPA, of Walker & Armstrong LLP and Karen Ziegler of Karen Ziegler Consulting Services. They described the general fund as being insolvent, and they said it had a shortfall of $3.4 million at the end of fiscal year 2019-20. Given the rate of spending, they said that shortfall could go as high at $4.2 million at the end of the current fiscal year June 30.
Former County Administrator Ron Drake and the Supervisors agreed to a “mutual separation agreement” that saw Drake leaving his position Dec. 31. Former County Finance Director Terry Krukemyer resigned effective May 13.
The general fund receives revenue from local property and sales taxes, license fees, Payment in Lieu of Taxes from the federal government, and shared revenues from the state. It is used to pay for county government expenses that are not covered by special revenues or come from county enterprises like the parks and the Emerald Canyon Golf Course.
Parke and Ziegler reported the county has $8.3 million in cash, but most of this money is in special funds that must be used for a specific purpose and cannot be used to support the general fund. As an example, the county has considerable funds in Highway User Revenue Funds from the state’s fuel tax, but these can only be used for transportation purposes.