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On the heels of learning of more than $1.59 million in recommended budget cuts for Archuleta County during a work session last week, the Board of County Commissioners continues to ponder what cuts to make in the face of declining revenues, and is working to figure out how deep those cuts need to go.
Last week, Todd Starr, interim county administrator, presented his recommendations to cut $1,594,737 from the General Fund budget in 2013 and 2014.
In recommending those cuts, Starr said he evaluated each General Fund department using a carefully chosen set of criteria.
The proposed cuts included layoffs, cutting the transportation department (which runs the Mountain Express bus service), and eliminating over $1 million in 1A expenses due to the county no longer receiving 1A property tax revenue.
The board directed county staff to begin contemplating budget cuts for 2014 early, due to an expected decline of property tax revenues on the horizon.
Now, however, due to budget disagreements at the federal level that led to sequestration, additional funding cuts are expected to filter down to the county level. The county is also realizing a lack of funding dedicated to capital maintenance of the county facilities.
The exact amount of revenue the county will lose in property tax revenues ( is determined by market value of properties sold and lagging two years behind current market value) is unknown.
In a Tuesday morning work session, assessor Natalie Woodruff told the board that more properties were decreasing in value than were increasing in value, and stated that most commercial property is expected to drop in value by about 3 percent, noting that the downtown commercial corridor is dropping by about 60 percent. Those drops, then, equate to less property taxes paid to the county.
Woodruff anticipated having an idea of the revenue decrease in the next several weeks.
In the same Tuesday morning work session, Starr told the board the county is also expecting a decrease of about $40,000 from the federal government for Payment In Lieu of Taxes (PILT), due to the sequestration.
That estimate came through an undated letter from U.S. Secretary of the Interior Ken Salazar, Starr said in a Wednesday interview. Starr added that he expects there will be further reductions in federal funding received by the county due to sequestration, but that no specifics are currently known.
Additionally, Starr noted that he asked each department head to determine capital needs for their department for the next 10 years.
The county currently has no capital expenditures budgeted for the upkeep of county facilities.
How to trim?
Despite not knowing exactly how deep budget cuts will need to be, the board and Starr are working to determine the next step in the process of identifying cuts that should be made to the county budget.
In Tuesday’s work session, commissioner Michael Whiting suggested that the county combine as many department head positions into operations managers as possible to give the county more immediate savings, though commissioners Clifford Lucero and Steve Wadley disagreed.
In fact, an agenda item for Tuesday’s regular meeting that would officially create the operations manager position was continued to April 16 in order for the board to obtain more accurate budget numbers.
Currently, the county has one department head who oversees two departments, and the board has discussed creating more such positions to realize a budget savings through fewer salaries.
Tuesday morning, Lucero talked of the importance of avoiding a “knee-jerk” reaction to the upcoming budget crisis before exact figures were known and urged his fellow commissioners to consider the “human element” of the cuts — people and jobs — when determining the “right” cuts to make.
At both the work session and Tuesday evening’s regular meeting, audience member Mark Weiler suggested that the county take a bottom-up approach to trimming the budget, versus a top-down approach where solely the commissioners and management determine the cuts.
Weiler, who previously served on the Pagosa Springs Town Council during the period that included significant budget cuts, suggested several ideas to the BoCC to consider when considering cuts.
Weiler suggested that creating several plans for different levels of budget cuts (like the town did) would help to prevent knee-jerk reactions on the part of the county. He also suggested that the board work to empower its employees and department heads, suggesting that giving the county’s 152 employees defined objectives and ownership over the cuts within those objectives would produce more creative options in the quest to save money than three commissioners could come up with.
As the board and Starr work to determine the amount to be cut and additional ways of making cuts, Starr said the board would likely schedule budget hearings with each individual department in the coming weeks.