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The budget ultimately passed with a 2-1 vote of the Board of County Commissioners, despite questions concerning the logic behind a budget that dips into reserves in light of declining revenues, the leadership of the commissioners and last-minute suggestions for cutting the budget.
The meeting began with a presentation of the $27,989,910 budget by Diane Sorensen, finance director and designated budget officer.
Sorensen stated that the budget balanced, in compliance with state statute, and serves as both a financial plan and a communication tool.
Further, Sorensen discussed issues faced by the county — its financial history, a “structural imbalance” that is being corrected, a fifth year of budget reductions, still-declining property values, and projected budget shortfalls over the next five years.
Starting in 2013, Sorensen said a financial, sustainable strategy will help the county reduce spending, provide an appropriate level of services and, “adapt to new reality, rather than become a victim of it.”
In the 2013 budget, the public works function (including road and bridge activities) is slated to have the largest expenditure at $8,902,820 — a 49.7-percent increase over last year.
Of that $8.9 million, $4 million is slated for improvement work on Piedra Road (coming through a $3.5 million federal grant and $500,000 county match).
Other work slated under the public works function is enhanced patching on Cloud Cap Avenue, milling on Pines Drive and Masters Circle (the three roads treated through a mill levy transfer from the General Fund), replacement of the Rio Blanco bridge (also helped by grant funding), graveling two to three miles of Mill Creek Road and two miles of Cat Creek Road, and the continued application of magnesium chloride on major roads.
That level of expenditure, however, will reduce the Road and Bridge Fund’s balance by almost 34 percent, from an estimated 2012 year-end amount of $2,648,767 to an amount proposed in the 2013 budget of $1,749,606.
The second largest expenditure by function is slated to be general government, with a $6,211,824 expenditure budget that is a .3-percent increase over 2012.
Third in the expenditure category is the health and welfare function, which includes the Department of Human Services, the county’s emergency operation division of the sheriff’s office, the weeds department and the Solid Waste Fund. The health and welfare function is slated to cost $5,174,603 in 2013 — a decrease of 14.2 percent from the 2012 budget.
Fourth in terms of expenditures by function is public safety at $3,182,987, including for the sheriff’s services and coroner.
Other expenditures by function include $3,036,682 for “other uses,” $832,899 for recreation and culture (a 175.2-percent increase due to budgeting fund balances in several recreation-related funds), and $648,094 for judicial and legal, which includes a 76.5-percent increase due to additional budgeting within the Fairfield Settlement Fund.
As for revenues, intergovernmental sources, such as grants, are expected to be the top provider at $10,402,772 (an increase of 16.4 percent), followed by property taxes, estimated to fall 2 percent to $5,780,178, sales tax (projected to remain flat at $3 million), $2,358,453 in intragovernmental revenue (for example, the Fleet Fund), $1.55 million from Highway Users Tax Funding, and $1,056,735 in miscellaneous and other revenue.
With the budget presented, the General Fund is expected to dip into reserves, depleting it by 5.9 percent, or $352,115. Commissioner Steve Wadley later pointed out that much of that dip can be attributed to $100,000 to fight fires in 2013, as well as $182,000 for a mill levy transfer to road and bridge, and contingency funding should the county receive a decreased Payment in Lieu of Taxes.
The dip into reserves is the first for the county since 2009, Sorensen pointed out.
The budget also includes $888,841 in capital outlay for airport equipment acquisition, as well as for Internet, network, telephone and broadband work, and $150,000 for the vehicle replacement plan within the Fleet Fund.
Sorensen also presented a slide concerning the county’s personnel, stating that salary and benefits are 30 percent of the county’s operating budget.
For 2013, the county is slated to have 149.68 Full-Time Equivalents (FTEs) — the fewest since 2007, when the level was at 147.33. The 2013 amount is a decrease of 2.93 FTEs from 2012.
The 2013 budget is expected to be available on the county’s website, www.archuletacounty.org, by Dec. 31, 2012.
Following Sorensen’s presentation, the commissioners considered a resolution adopting the budget, with Commissioner Michael Whiting proposing an amendment to the budget resolution.
“I sure would like to hear what the amendment would read,” Commissioner Clifford Lucero said.
Whiting proposed reducing expenditures, “across the board” by 5.9 percent or the dollar amount required to not dip into General Fund reserves.
Wadley pointed out that an, “across the board” reduction would mean cuts to the District Attorney’s budget, Archuleta County Combined Dispatch and the Department of Human Services (DHS), with Sorensen and Todd Starr, county attorney and interim county administrator, clarifying that the cut would be to the General Fund and would not affect DHS.
“Actually, I’m surprised … to say the least,” Lucero said, criticizing Whiting’s decision to bring forward an amendment, “at the eleventh hour,” after working, “behind closed doors.”
“What kind of leadership is that, that you don’t tell everyone?” Lucero asked.
Whiting suggested that he had proposed specific cuts throughout the budget process and that the adoption meeting was the first time he could bring it up outside of budget hearings.
Wadley said Whiting brought up the suggested cuts after the budget hearings with each department head, when they were not there to defend their departments.
“Actually, that’s not how it went down and you know it,” Whiting said, adding that he had disagreed with the other commissioners on cuts throughout the process. “This has been my position all day long.”
Wadley further questioned Whiting about whether he had suggested the $100,000 cut to the sheriff’s budget prior to the final budget work sessions.
With that, Lucero read a prepared statement, saying, “This has been a very difficult budget process. Archuleta County is going to have to deal with less revenues in 2014. It is very important for Archuleta County to start preparing in January 2013 for the next budget cycle.”
Lucero said staff has been directed to start preparations for the 2014 budget early in 2013, with assessed property valuations expected to drop (with further information on that drop expected in March). “The next step is to look hard at every department and every service Archuleta County provides.”
Whiting then made a motion to approve the resolution with the amendment he previously discussed.
“Do I hear a second?” Lucero asked, with Wadley responding, “No.”
Wadley then moved that the board approved the resolution and the budget, with Lucero seconding.
With the floor opened to public comment, Mark Weiler voiced his opinion that spending out of reserves was a mistake in light of next year’s situation and the decisions that will have to be made, and further noted that the county needed to live within its means.
Lucero then asked for a vote, with Whiting asking if he could make further comments, then reading a prepared statement of his own.
“The county budget is balanced. State law is satisfied. I am not,” Whiting said. “A budget is a statement about the future. The statement this budget makes demands an apology. First, I’d like to apologize to the taxpayers, because we work for you. This budget does not reflect your values or forward your interests. This is not what you elected us to do. It is not conservative, or even rigorous. It says that we plan to spend more than $350,000 than we earn in 2013 alone. Borrowing from savings and calling it ‘balanced’ is not truthful. It’s not conservative, either.”
Whiting further stated that the county will bankrupt the Road and Bridge Fund by 2015, and that the commissioners lacked the collective courage to make cuts recommended by staff.
Whiting said he brought forward a proposal to save $325,000 in administrative costs, which could then be used for road improvement, job creation and early childhood education, but that only about one-third of his proposed cuts were supported.
Further, Whiting added that the budget postponed the, “really hard decisions and cuts,” until 2014, which would then compound with future problems.
Additionally, Whiting issued an apology to county employees, stating that the budget did not honor their hard work and that it made pay increases less likely.
“Some elected offices and county departments scratch along while huge, political sacred cows pass through unaffected and un-examined, again,” Whiting said, concluding by stating the county could do better.
By request, Whiting further defined those “sacred cows” in an e-mail, stating, “The Sheriff had three opportunities to show that no cuts could be made to EO (editor’s note: Emergency Operations). Once, when he drafted his first 2013 budget; again at the first budget hearing; and then at a special hearing on EO specifically. He did not make his case for me. His own EO Department head told me (and Clifford) that there were many tasks he was performing by default that were not central to his job, or even required of the Sheriff’s Office, and that added up to a sizable part of his work. That’s un-examined. Did the Recorder’s Office get three hearings? That’s why I used the word ‘sacred.’ ‘Sacrosanct’ might be closer. There are other Sacred Cows.”
“I didn’t bring anything to read,” Wadley said at the meeting before reiterating the $352,000 proposed to be taken from reserves would be for fire, roads and to offset less money received from the federal government, and stating that the only thing he agreed with Whiting on was that the budget process was open and transparent.
Wadley said line items could not be blindly cut from the budget, and that he would have no problem making hard decisions when required to.
Lucero said the department heads were asked to cut 5 percent from their budgets at the beginning of the budget season — not at the, “eleventh hour,” and again read his statement before calling for a vote.
As the next item was being presented, Sheriff Pete Gonzalez requested more public comment on the matter, with Lucero stating that public comment would be taken at the end of the meeting.
At the end, Gonzalez stated that Whiting had attacked his fellow commissioners about their leadership when Whiting did not agree with them, adding that he, like Lucero and Wadley, did not remember any of Whiting’s cuts being proposed early in the budget process.