Caswell County staff outline $3.3 million FY27 structural gap; vacancies and department targets flagged as primary levers

Caswell County officials told the Board of Commissioners on Thursday that the county faces a structural FY27 budget gap of roughly $3.3 million and will rely primarily on expenditure reductions — including vacancy management and departmental operating targets — rather than one‑time fund balance to bring recurring spending into line with recurring revenue.

The interim county manager opened the work session by saying staff had rebuilt position data and verified financials so the board would be working from “accurate data and a clear understanding of our financial position.” Mr. Horton, the county’s finance director, said the FY26 adopted baseline was about $36.4 million while preliminary estimates put FY27 recurring revenue at about $33.5 million, “The difference approximately $3.3 million is the structural gap,” he said.

Why it matters: staff cautioned that Caswell’s unassigned fund balance is well below Local Government Commission (LGC) guidance — roughly half of the commonly cited 14–15% target — and therefore is a limited, one‑time resource. That narrows options for closing a recurring gap and increases the emphasis on recurring expenditure reductions.

What staff presented • Salary rebuild and vacancy impacts: Finance staff completed a position‑by‑position reconciliation and a salary baseline rebuild. Mr. Horton said the exercise produced an estimated $300,000 of salary savings relative to the FY26 adopted salary budget (FY26 adopted salary: $14.16 million; FY27 projected after the rebuild: about $13.79 million). He emphasized, however, that vacancies — not overbudgeting — are the primary driver of the salary variance. “The county has 40 vacancies right now, approximately 15% of authorized FTEs,” Mr. Horton said, noting that the gross salary cost tied to vacancies is roughly $2.79 million while the county‑funded share of that is about $1.81 million.

• Non‑salary operating targets: Staff used a five‑step methodology (reviewed FY24–25 actuals, projected FY26 year‑end, calculated a 2–3 year baseline, adjusted for known one‑time or contract changes, then set departmental targets). Preliminary non‑salary targets across the county’s primary operating funds showed a gross reduction of about $544,000; the general fund operating target was presented about $660,000 below the FY26 adopted level. Staff cautioned that reductions in funds heavily supported by state and federal reimbursements (for example, DSS and public health) do not translate dollar‑for‑dollar to county savings.

• Department case study — detention center: The finance team used the detention center as a case study to illustrate line‑by‑line review. The FY26 detention budget was presented at about $823,570; the FY27 target was $844,289. After the department and finance reviewed line items, the detention center’s requested FY27 operating amount came in at roughly $812,832 — about $31,000 below the target and about $10,000 lower than FY26 adopted. Staff cited adjustments in contractual and demand‑driven lines, food services, and equipment replacement as typical areas for savings.

• Debt service: Mr. Horton reviewed existing and planned debt service and said FY27 total debt service is expected to be lower than FY26 by about $286,000 after annualizing some FY26 partial‑year financings. He noted the detention center principal payment rolling off is the largest single driver of the reduction. Several planned FY26 financings (vehicle leases, ambulance remounts, a UHF system) were not yet issued because the county awaits FY25 audited financial statements and LGC review; commissioners noted that some of the planned financings may not be feasible to close this fiscal year.

Board questions and next steps Commissioners pressed staff on how the pieces fit together. When asked whether the $3.3 million gap already reflected the $300,000 salary correction, staff said it did not; deducting that amount would reduce the gap to roughly $3.0 million. Commissioners asked for confidence levels on the salary reconciliation; staff said the reconciliation was done position by position and vetted with department heads, but that final departmental meetings could reveal additional changes.

Members pressed staff on vacancy strategy and on how long specific positions have been vacant; staff said vacancy duration varied and that long‑vacant positions are a likely candidate for freezing or elimination if departments do not make a compelling case for immediate reauthorization. The interim county manager summarized the vacancy approaches under consideration: a vacancy‑rate allowance, temporary freezes, or elimination of long‑unfilled positions, with final recommendations to be included in the county manager’s recommended budget on May 18.

What’s next: staff will continue department budget meetings through April, finalize revenue estimates (including updated sales tax data), and develop a vacancy strategy to be reflected in the recommended FY27 budget. Key dates presented included May 15 (statutory deadline for the school budget), May 18 (presentation of the recommended county budget), a June 1 public hearing, and June 15 (target date for final adoption and setting tax rates).

Formal action: The board concluded the session with a motion to adjourn moved by Commissioner Smith and seconded by Commissioner Totten; the board adjourned to 6:30.

Limitations: many figures presented at the work session are preliminary and subject to change pending final revenue forecasts, department meetings, and the FY25 audit and LGC review. Staff emphasized the numbers are an update and not the final recommended budget.