Commission dips into reserves for ’18 budget
Garfield County commissioners have approved the 2018 budget, but to make it work amidst a continual revenue drop tied to natural gas production, they dipped into reserves for about $16 million.
Commissioners are looking at a decrease of about $2.6 million in revenue for next year, which is about a 3-percent drop from the 2017 budget. This decrease is still not as significant as the $17 million decline in revenue that commissioners had to contend with last year.
The 2018 approved budget appropriates about $104 million in total. Working through the budget process, commissioners cut overall 2018 expenditures by about $925,000 compared to the proposed budget.
Early in the budget process county staff emphasized the need to prioritize capital spending for 2018, as the proposed budget had expenditures at about $17 million over revenues.
Some of the biggest-ticket capital items were $1.2 million for a new building to house snow removal equipment at the Garfield County Regional Airport in Rifle and about $3.5 million for various asphalt paving projects. Commissioners ended up trimming around $1.2 million by cutting or postponing a handful of other projects, including a new building for the county coroner and search and rescue, and a few projects at the fairgrounds. That brought the total capital expenditures down to about $12.8 million.
Even with the $16 million dip into reserves, the county’s reserves are projected to be a little over $100 million at the end of 2018. But that is the lowest fund balance the county has seen since 2009.
In the coming years “we’re going to have to be more frugal,” said Commissioner Tom Jankovsky, who also sits on the county budget committee. He noted that the $12.8 million commissioners are putting into capital is quite a bit more than they spent on such projects last year. “Last year we reduced our capital, however, we probably spent another $3 million during the year on purchases of property,” he said.
While $100 million in reserves is a comfortable amount, at this pace the county will draw that down to around $80 million, then $60 million, Jankovsky warned.
So in two years, potentially, without an increase in revenue, the county “could be at a critical point in how we operate,” such that the county may only be able to cover its operating costs and have no more capital projects, said Jankovsky.
Commissioner Mike Samson, too, said the county may need to put a moratorium on capital spending.
“And maybe oil and gas will turn around, but I think we have another years of a tight budget,” said Jankovsky. He hopes that revenue will come back enough to allow the county to keep up with increases in salaries, payroll taxes and health insurance.
Oil and gas at one time made up 85 percent of the county’s property tax, and now it’s down to 50 percent, said Jankovsky.
Commissioners have also zeroed out the mill levies for the road and bridge fund, as well as the human services fund, sending that money instead straight to the general fund. The municipalities, however, would normally get a chunk of that road and bridge mill levy, so commissioners agreed to dedicate $406,000 to the municipalities, the same amount of they received last year. And their approved budget spends a total of about $2.8 million in various grants.