Auditor warns Potter County faces revenue gap; court restores critical IT replacements and weighs fund‑balance use

Potter County officials told commissioners on Aug. 11 that a sustained decline in interest income has created a recurring revenue gap that, combined with departmental “asks,” would force a higher tax rate unless the court cuts requests or uses fund balance.

Finance staff said investment interest—historically a major non‑tax revenue source—has fallen from roughly $3.3 million last year to a projected $2.0 million next fiscal year, a swing of about $1.3 million. County staff said that, with the current set of department requests, the county would need to adopt a 5.2 percent tax rate to balance the proposed budget without further cuts. Auditor Brandon explained the county can use unused increments from prior years to increase the voter‑approval tax threshold, but emphasized that recurring personnel costs should not be funded from one‑time fund balance.

Within that budget discussion, information technology staff urged replacement of end‑of‑life backup and recovery infrastructure. IT presented three items cut earlier by the judge: a tape library replacement (archival backups), Veeam backup servers (replace an end‑of‑life backup solution) and a network switch to support records management relocation. Commissioners agreed to restore the first two items—tape library and Veeam servers—as critical for disaster recovery and to fund them as a one‑time expenditure from fund balance or a new IT sinking fund rather than increasing the tax rate; they left the new network switch out of the tax calculation and deferred it to later (it remained in the request but would be funded separately if needed). IT staff said the county had previously paid approximately $82,000 per year for the older backup solution that is now end of life.

Court members discussed tradeoffs between recurring cost increases (new positions, permanent pay raises) and one‑time purchases. The judge proposed a 1.5 percent cost‑of‑living adjustment in the presented budget rather than the 3 percent previously used as a reference. Commissioners asked staff to place certain one‑time capital replacements in fund‑balance funding lines so they do not push the tax‑rate calculation higher and to create a dedicated IT set‑aside fund to smooth future replacement costs. The court directed staff to return with contract details and follow‑up figures; no final tax rate was adopted at the meeting.