Garfield commissioners to weigh capital projects in conservative budget
October 11, 2017
The Garfield County budget committee has presented its draft 2018 budget, and with a small dip in projected revenue, commissioners will be weighing which capital projects to green light.
The county expects this budget to draw down its fund balance to the lowest level since 2009, though still above $100 million.
County Manager Kevin Batchelder described the draft as a "very fiscally conservative" budget proposal. The county is projecting a revenue decline, though not as significant as this year's, of about $2.6 million, said the county manager.
By comparison, revenues are projected to stay pretty flat, leaving the county around the same position as last year, when commissioners had to contend with a slump in natural gas production that resulted in a $17 million reduction in property tax revenue.
In 2016, revenue from oil and gas production accounted for about 70 percent of the county's property tax revenue, but that fell to 54 percent in 2017.
"There is a two-year lag between the tax year and when the county receives that property tax revenue associated with those production levels," according to the county.
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The budget committee presented a $105.7 million budget to commissioners on Oct. 2. The budget projects 2018 revenues at $88.5 million. Batchelder said the budget committee successfully closed a $1.8 million gap between revenue reduction and expenditures.
The proposed budget projects giving county employees a 2.5-percent pay increase. Costs for employee health insurance are expected to increase by 8.5 percent.
County staff reported that the proposed budget is balanced. However, Commissioner Tom Jankovksy noted that it still shows about $17 million of expenditures in excess of revenues.
The big upcoming discussions are expected to be on capital spending. Capital expenditures are at about $14 million. Theresa Wagenman, county finance director, said the big driver of the excess of expenditures over revenues is the budget for capital projects and discretionary grants, which are at about $3 million.
"I need to focus the commissioners on this issue, because when we get to the public hearing that includes a discussion of the capital projects, some choices will have to be made. We have a lot more capital proposed than we can necessarily afford," said Batchelder.
"We're still dealing with a really difficult revenue situation," Batchelder told commissioners. "We really had to tighten our belt to make this budget work … some capital projects will be approved, but they have to be prioritized."
"That will be a lively discussion," Jankovsky said.
The county's 2018 capital projects currently include $3.2 million for asphalt paving projects, as well as $1 million for a facility to house snow removal equipment at the Rifle Garfield County Airport, according to the county.
"All told, $4.6 million is allocated toward infrastructure; $3.7 million for buildings and improvements; and $2.5 million in heavy equipment and machinery," county staff reported.
This year the budget committee is recommending zeroing out the mill levy for Road and Bridge and Human Services funds, sending that money to the general fund instead. Jankovsky questioned why the fund balance in Road and Bridge got so high, asking whether it was misbalanced four or five years ago.
Commissioner John Martin said the county had many infrastructure projects scheduled from about 2006 to 2010 and that commissioners had adjusted the mill levy to cover those, "because a huge impact of infrastructure was going on, because of the increase of oil and gas, transportation, development … and our priority was to take care of the infrastructure." However, some of those projects were not completed, and now the board needs to reduce that mill levy and transfer the mill levy back to the general fund due to lack of revenue, said Martin.
Two public hearings are coming up on Oct. 17 and 31. Commissioners are expecting to adopt the 2018 budget on Nov. 13.
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