Green River District Health Department's board of directors voted unanimously Tuesday night to accept a 2019-2020 budget of more than $20 million.
It included an increase of more than $2.6 million for employee pension expenses.
During fiscal year 2019, the district budgeted for fringe benefits costing more than $5.1 million. By comparison, the 2020 amount is nearly $7.8 million.
For every dollar of salary GRDHD pays, it currently puts 49 cents into the public employee pension system. That amount is expected to jump to 84 cents in the upcoming fiscal year, which begins July 1.
Gov. Matt Bevin vetoed the only pension-related bill lawmakers passed during this year's legislative session, which left GRDHD in limbo when it came to preparing a budget for the upcoming year. Bevin has talked about calling a special session before July 1 to deal with the state's pension problem, but it hasn't happened.
At Tuesday's board meeting, health department officials presented a budget that assumes no last-minute legislative solution or that quasi-government agencies will get another year's reprieve from increased pension payments.
"We have the resources to do this," Clay Horton, public health director, told board members. "We have the talent among our staff to do this."
According to the district's financial report, the health department expects to close the current fiscal year with an unrestricted reserve balance of more than $5.3 million. Its current cash balance is more than $9.3 million, which would sustain operations with no more revenue for a period of nearly six months.
Horton credited the board with the district's strong financial standing. About two years ago, board members agreed to raise the taxing districts' contribution rate.
"That has given us the resources to manage this," Horton said of increased pension expenses.
He told board members: The district won't deal with the increase in pension payments by laying off staff members or reducing services. Instead, the health department will maximize efficiencies, seek additional state and federal grants to pay for programs and cut its staff through attrition.
He said a 10% reduction in employees will make the agency financially sustainable with current revenues and levels of operation. Ten percent amounts to 18 positions.
Horton said it is not unusual for the district to have 1.5 retirements and resignations per month. Currently, six positions are being held vacant. They include two nurses, one clinical assistant, one district maintenance position, one custodian and one preparedness coordinator's part-time position.
The upcoming budget includes a 3% cost-of-living raise for employees.
"We have an increasingly competitive local job market," Horton told board members.
While he was driving through Evansville recently, he noticed a fast food restaurant sign that touted a $12.50 starting wage. Walmart and other businesses have raised their wages.
GRDHD's average wage is $18.96 per hour, ranking it 54th out of 58 health departments in the state.
On average, state health department employees earn $21.45 per hour, excluding Louisville, Lexington and Northern Kentucky, which have their own merit systems and higher compensation schedules.
Recruiting and training new staff is expensive. A raise to retain current employees is money well spent, Horton said.
Providing a 3% raise next fiscal year will cost the district more than $1.3 million, which is the same amount that will be saved by reducing the staff by 18 positions through attrition.
"If we lose (our employees), we are out of business," Webster County board member Daniel Herron said during the discussion before voting on the budget. "I don't think we have any other choice than to give them a raise."
Renee Beasley Jones, 270-228-2835, firstname.lastname@example.org.