Baldwin County taxpayers could bear burden of $15 million budget crisis

County leaders discussed selling airport property and using the courthouse to seek bond revenue as they look for ways to cover a $15 million payment due by Dec. 31.

MILLEDGEVILLE, Georgia (41NBC/WMGT)- Baldwin County taxpayers could bear the burden of a $15 million budget crisis as county leaders work to address a major payment due by the end of the year.

Interim County Manager Paul Van Haute spoke to commissioners during their meeting Tuesday. He told commissioners the county has a $15 million payment due to Century Bank by Dec. 31 and does not currently have the money available.

Van Haute said the county is in budget and millage rate setting mode and described some of the possible changes as “pretty Draconian.”

$15 million payment due by Dec. 31

Van Haute said Baldwin County has to make the $15 million payment by the end of the year.

He also said counties cannot declare bankruptcy. According to Van Haute, if the county does not address the debt, the state could step in and levy the millage rate needed to satisfy it.

Van Haute said the only option he can guarantee would put $15 million in the bank by Dec. 31 is a 9.3-mill tax increase on top of the current rate, bringing the millage rate to 19.066 mills.

He said that option would generate predictable revenue between October and December, but acknowledged the impact it would have on residents.

“The only folks that are going to bear the burden of this are the taxpayers, and for that, I’m sorry,” Van Haute said.

Bonds and asset sales also discussed

Van Haute said the county is also looking at using the Public Facilities Authority to lease county buildings and try to generate revenue through the bond market.

He said the county could look at using buildings such as the county building and courthouse, but said the chance of closing that process within 120 days is “extremely slim.”

Van Haute also said bond issuance could be difficult because the bonds would not be tax-exempt, and because of the county’s lack of an audit, poor credit rating, and current market interest rates.

The county is also looking at selling assets, including the airport property.

Van Haute said those sales are not likely to close by December because due diligence periods would likely push the process into the first quarter of 2027.

Commissioner outlines possible options

Commissioners also discussed possible ways to move forward.

Commissioner Andrew Strickland described three options: a major tax increase to pay off the tax anticipation note and stabilize the county financially; using bonds to pay the debt over time with a smaller millage rate increase; or a more modest tax increase of about 2 to 4 mills while the county slowly works through the financial situation.

He said all options would include cuts, responsible spending, looking for waste, renegotiating contracts, and trying to get better deals.

Payroll, insurance and retirement costs

Van Haute also gave commissioners a broad view of the county’s budget obligations.

He said each county pay period costs about $550,000. With 26 pay periods in a year, that totals about $14.3 million.

He also listed estimated medical insurance renewals at $4 million and the county’s retirement contribution at $2.8 million.

Together, those costs total about $21 million before the $15 million bank payment.

Van Haute said savings from vacant positions, resignations or terminations would not be enough to solve the county’s financial problems. He said the county still has to operate services including the sheriff’s office, jail, courthouse, and fire department.

Pension liability and grant funding concerns

Van Haute told commissioners Baldwin County has an unfunded pension liability of $20.7 million.

He said the county’s pension plan is funded at 72.6%. According to Van Haute, 70% is an important threshold. If the plan falls below that level, employees would have to be notified, and the plan could be affected.

Van Haute said the funding ratio declines to 61% after projecting future salary increases. He also said the plan is paying out 7.49% of the market value of assets in benefit payments.

Van Haute also said the county has grant projects ready to move forward, including airport and streetscape work, but does not have the cash needed to fund the projects.

Public raises accountability concerns

The discussion continued into public comment, where residents raised concerns about accountability, transparency, and the impact on taxpayers.

One resident questioned how the county reached this point and said taxpayers should not have to pay for financial problems that developed over time.

Another resident raised concerns about county services, including mowing, and said the broader financial discussion pointed to a larger accountability issue.

Commissioners also referenced prior financial concerns, including an investigation, financial reports, and the termination of a county manager.

One commissioner said the board should receive regular financial reports moving forward.