Northampton County faces its fair share of challenges, but thanks to spending reductions, costs savings, and improvements in efficiency, the county is in a stronger financial situation than it was in three years ago, and it will continue to move in a positive direction in the years to come.

That was one of the messages Northampton County Executive John Brown delivered during his third State of the County address at Northampton Community College on April 12, an event hosted by the Lehigh Valley Economic Development Corporation (LVEDC).

“Our overall message is one of accountability and sustainability,” Brown told a crowd of about 100 people. “It’s very important to us at all levels that we have to be accountable. … We’re doing everything we can to be good stewards of the taxpayers’ money.”

Brown outlined several challenges the county is facing. Growth in expenses have exceeded increases in revenue, and tax revenue has been relatively flat dating back to 2008, with increases averaging less than $1 million annually.

Personnel costs have increased at an average rate of $3.9 million per year over the last decade, Brown said, and benefit costs have increased at four times the rate of tax revenue. Additionally, pension costs have risen by almost $13 million, or about 22 percent of tax revenue, over the last seven years.

But county spending has dropped to $286 million, a number that has been flat for the last three years, compared to $319 million in 2013, Brown said. That constitutes a 10.3 percent reduction. The county has also reversed a seven-year trend of taking money from the general fund to balance the budget.

The county has realized a $3.3 million in health care savings from 2014 to 2015 by switching to a 90-10 plan, Brown said, in which employees pay a 10 percent co-pay. Those savings are expected to increase: only one third of the workforce was on the new plan in 2015, compared to the 87 percent that will be on it this year.

“We realized savings just by introducing the idea of consumerism,” Brown said. “We took the smallest possible step with the health care changes that we could, and introduced a 10 percent co-pay plan, and as a result we found $3.3 million in savings.”

Brown said $24 million in county tax dollars was required to cover the funding shortfall from the state budget impasse. But unlike other counties, Northampton covered all its costs and paid all its vendors during the impasse, and did so without any layoffs.

The county came within 24 hours of needing to tap into a loan of up to $45 million to cover costs during the state budget crisis, Brown said, but ultimately did not need to do so. Brown said he will seek to roll over those plans next year, however, in anticipation of additional delays next year.

“We anticipating similar problems with the next state budget,” Brown said. “We’re not getting any indication that it’s getting any easier.”

Brown also discussed changes at the Gracedale Nursing Home in Upper Nazareth Township, which employs about 800 people, or one-third of the county workforce. It was projected to see $7.7 million in operating losses in 2015, but instead came in at $2.1 million, a 73 percent reduction.

“I’m not a fan of operating loss; that’s not something that sticks well in my throat,” Brown said. “But we are doing well enough that we are on track with some support to potentially break even this year.”

Brown attributed some of those changes to a new electronics health records system and changes in absenteeism policy. Brown also noted that for two years in a row, surprise inspections by the Pennsylvania Department of Health turned up zero deficiencies, a first in the history of the facility.

“That’s unheard of in the nursing home industry,” Brown said. “About 9 percent of all nursing homes across the entire United States get a zero-deficiency rate. For a county-owned home to receive that, that was phenomenal.”

The county has settled labor agreements with 9 of the county’s 11 unions, Brown said, and has also made improvements to the Northampton County Prison’s central booking system. The county has also undergone technology improvements at row offices such as orphan and wills, criminal, and prothonotary/sheriff.