With six month’s of the fiscal year behind them, the Archuleta County Board of Commissioners heard a midyear budget update at their meeting Tuesday, as well as a preview of what this fall’s budget preparations may entail.
County Finance Director Diane Sorenson and Administrator Greg Schulte made the presentation to the BoCC.
“Archuleta County is continuing to improve its financial position,” Sorenson said to begin her portion of the presentation.
Sorenson went on to say that at the end of 2010, the county’s funds had increased reserves by about $1.7 million.
In the first half of the current year, Sorenson said the county’s expenditures are “well within” the 2011 budget.
Additionally, Sorenson said General Fund revenues exceeded expenditures through the first half of the year by almost $2.64 million, with expenditures at about 37.8 percent, a 2-percent increase over 2010.
Sorenson explained that the majority of the increases in the expenditures are due to the county’s switch to a new health insurance plan and the payment schedule of the premiums (which Sorenson expects will balance out after the year-end accruals are posted), as well as a transfer of $100,000 to start up the new internal services fleet fund (which Sorenson said will be repaid), and interfund charges related to the new fund.
Sorenson said the most significant decrease in the General Fund was $241,000 and was due to the reduction of full-time employees.
Revenues in the General Fund are currently down $998,000, or 13 percent over 2010, but Sorenson warned that the largest decrease was a timing issue of the receipt of Payment in Lieu of Taxes (PILT), which was received in June of 2010, accounting for $871,000 of the decrease.
Charges for services, then, are also down $53,600 because of treasurer’s fees that have not yet been recorded on the PILT payment.
Transfers into the General Fund are also down when compared to 2010, Sorenson said, because of the work that was done in 2010 to eliminate special revenue funds and move those activities and funding into the General Fund, as guided by national accounting standards.
Revenues within the General Fund sit at just over 61 percent of the 2011 budget.
For the midyear report on the Road and Bridge Fund, Sorenson said revenues for the fund exceeded expenditures by $510,676, with expenditures at 28.8 percent of the 2011 budget, a 9.3-percent decrease compared to the same time last year.
Sorenson said the most significant decrease, of $135,600, is in 1A road work, which Sorenson contributed to the spring magnesium chloride applications that have not yet been paid for.
Schulte added that the fund’s sitting at 28.8 percent of budget was an “artificial low” because the county was about to “embark” on the 2011 Pavement Preservation Plan.
Road and Bridge revenues are up $194,000 compared to 2010, Sorenson said.
Sorenson added that the most notable increases in revenue to the fund because of the county’s service as a “pass thru” entity between the Colorado Department of Transportation and San Juan River Village Metro District for their Harebell Bridge project.
Another significant increase highlighted by Sorenson was an increase in 1A revenue of $53,700 because of a BoCC decision to allocate 65 percent of 1A revenue to roads, versus 60 percent in 2010.
Sorenson said the county’s Solid Waste Fund also continues to show improvement over 2010, though expenses exceed revenues by $26,638.
Expenditures in the fund have decreased 2 percent compared to 2010 and sit at 39.1 percent of the 2011 budget.
The most notable decrease in expenses in the fund remains the switch of the solid waste manager position to half time, with the other half of the position being used to administer the new internal fleet fund.
Schulte added that, like Road and Bridge, Solid Waste is “also somewhat seasonal” in its activities.
Revenues for the fund are up $16,600 or 7.6 percent when compared to last year, with revenues sitting at 46.2 percent of the budget.
With this year’s recap done, Schulte took a look into what 2012 may hold for the county’s budget.
Schulte said county estimated property valuation is $321,860,150 — about a 25-percent reduction from the prior assessment of $423,737,130.
Schulte said the decrease, should the mill levies for Road and Bridge and the Department of Human Services stay the same, would mean a reduction of about $670,000 in revenue to the General Fund.
“The impending discussion is really not a surprise,” Schulte said.
To help address the upcoming reduction, Schulte said county staff has been working through Project 2012 and, in 2011, proposed a cut of 5.5 positions in the 2011 budget.
Schulte said the county has also been gradually reducing its expenses in the current year to better position the county for 2012.
Schulte presented estimated, proposed General Fund reductions for 2012, including prior year ongoing savings, elimination of several positions, some of which are currently vacant (including the special projects manager, planning technician, senior program coordinator, a clerk’s office position, three positions in the sheriff’s office and an assessor’s office position), the elimination of the “community education” $50,000, a reinstating of development fees to 100 percent and county airport snow removal savings achieved by potentially switching to an internal snow removal operation (the county’s contract with Hart Construction has ended).
In total, Schulte believes those targeted reductions would save an estimated $710,000.
While ideas have been floated to keep the county within its means, Schulte admitted staff doesn’t know what will happen with state and federal funding.
“We don’t know the full picture,” Schulte said.
Full picture or not, the county’s budget planning season will soon be in full swing, with department submittals due in August and September.
A proposed budget is required to be presented by Oct. 15, and the final 2012 budget must be adopted by Dec. 15.