On Wednesday, officials expect to present a plan to the Summit County Council for digging the government out of a $1.6 million deficit in its general fund.

“We started the year in the hole and in violation of state law for the general fund,” Summit County Manager Bob Jasper said.

The law requires that counties have at least 5 percent of their general fund revenues available in the unreserved portion of the fund. A 2009 financial report showed Summit County with a $1.6 million deficit in the general fund’s unrestricted accounts.

Officials say they expect to dip into the county’s “disaster fund” to help erase the deficit. The account meant for disaster relief contains just over $1 million.

“That disaster fund is there for circumstances like the flood earlier this year or if there’s a fire,” said Matt Leavitt, an employee in the Summit County Auditor’s Office. “We’re proposing taking $800,000 out of the disaster fund.”

But councilpersons will likely tap other reserves this year to bring the general fund into the black. Jasper and the Auditor’s Office suggest borrowing $3 million from Summit County’s rainy day account to help close the deficit in the operating fund.

“To my knowledge we have never used it,” Jasper said.

Also known as the Tax Stability Fund, the emergency account currently contains nearly $13 million.

But without consent from voters, officials can only borrow large sums of money from the account. It is too late this year for councilpersons to seek voter approval on next month’s ballot.

Leavitt said officials would likely seek approval from the voters next year for paying back this year’s “inter-fund loan” from the Tax Stability Fund.

“We missed the time to put it on the ballot this year. Otherwise it would probably be on the ballot for voter approval,” Leavitt said.

The plan that could be approved Wednesday could also amend this year’s budget to withhold about $250,000 that was budgeted for the county’s rainy day fund. About $200,000 would also not be placed into the open-space coffers in 2010.

Officials say they also hope to save about $825,000 by cutting spending on capital projects.

“For this year we had budgeted about $1.2 million for capital facility projects and out of that about $875,000 comes from the general fund,” Leavitt said. “We have spent some of that $875,000, and will continue to spend some of that 875,000 to the tune of about $50,000.”

There are also special assessments that were collected for improvements in Timberline and along Old Ranch Road. But about $72,000 wasn’t spent and can now be transferred into the general fund, Jasper explained.

“Let’s clean out these funds and move it to the general fund,” he said.

Budget committee is optimistic

Tax revenues in Summit County are steady as officials gear up for this year’s round of budget talks.

“We’re not doing fantastic. The economy is not racing forward. It just seems like it is doing better than last year at this time,” Leavitt said. “There are going to be some changes where we are going to try to make things more efficient and save money We’ve looked at different areas to try and cut.”

Revenue from sales tax is up a little bit over last year, he explained.

“I’m not going to get too excited about it because your major source of revenue is going to come from property taxes and that we’re not going to see until November and December,” Leavitt said.

But there could be layoffs in the County Courthouse as councilpersons budget for 2011. Next year’s budget is projected at about $45 million.

“It looks like this year’s revenues are exceeding expenses,” Jasper said. “I’m not recommending we spend any more We’re going to keep trimming.”