County’s grim budget projections weren’t grim enough |

County’s grim budget projections weren’t grim enough

Last fall, county number crunchers presented three very grim scenarios for 2002.

All three involved significant decreases in revenues for Pitkin County, primarily because of projected declines in sales tax collections.

Sales taxes make up about 29 percent of the county’s general fund budget, and the county finance department reckoned they were set to fall anywhere from 5 to 10 percent from their 2001 levels.

As they deliberated, all of the commissioners recognized that the post 9/11 economy, which was already in a recession when the attacks occurred, was likely to do a fair amount of damage to their bottom line.

But the commissioners nevertheless decided to set their 2002 general fund budget at $17.4 million, reflecting only a 5 percent decrease in sales tax revenues. By choosing the most optimistic scenario conceivable ? a 5 percent dip ? the commissioners avoided laying people off and slashing services before they knew what was going to happen.

That decision goes a long way toward explaining why the county is now asking for permission to collect an additional $800,000 in property taxes for the next five years.

When they adjusted the property tax levy last fall as part of the budget process, the majority of commissioners voted to collect about $1 million more ? $5 per $100,000 in property value ? than they were allowed to spend by state law. If sales taxes collections held up as projected it could be refunded. But if retail sales fell through the floor, they could ask voters for permission to keep the money.

At the beginning of 2002, the commissioners eliminate six unfilled jobs and instituted across-the-board cuts that saved about $700,000.

By June, however, it was apparent retail sales were in much worse shape than hoped, and the county number crunchers predicted a $1.9 million shortfall for 2002.

Three employees, including two mangers, were laid off. A hiring freeze was enacted. And for the first time in several years, county officials began cutting from programs that interact with the public, including the restaurant inspection program. In all, about $850,000 was cut from the general fund budget.

County managers began looking for ways to bring in more money without a tax increase.

About $270,000 in fees collected annually by the county landfill was diverted to the general fund. A plan to triple the fees for processing development applications was also agreed to.

“It used to pay for itself,” said Tom Oken’s, one of the county’s financial managers. “But for several years the commissioners were reluctant to increase fees.”

Oken said a recent study of the fees and costs at community development indicated that fees only covered about a third of the total cost of operating the department, meaning developers are receiving a handsome subsidy that contradicts the commissioners’ longstanding policy that “development should pay its own way.”

The additional fees from the two departments are projected to add $850,000 to $900,000 to the county’s bottom line. Added with the $850,000 saved through cuts, the county had managed to make up $1.7 million of the $1.9 million projected deficit.

In early September, however, county finance department officials and citizens on the county’s financial advisory board agreed that the financial outlook needed to be adjusted downward once again, and they reset the projected deficit at $2.5 million, adding another $600,000 to the shortfall. Oken said sales tax revenues for 2002 will be between 8 and 8.5 percent less than last year.

The gap between collections and expenditures grew from $200,000 to $800,000.

Throughout the summer, the commissioners combed through their various departments looking for other savings. They broke the general budget expenditures, everything from public safety to the weed management program, into three groups: mandated services, essential services and desired services.

Some departments are mandated by the state constitution, and the county is required to pay for them. They include the assessor, treasurer, clerk and recorder, and a number of public-safety-related tasks. County taxpayers are also required by state law to pay for at least three county commissioners to oversee operations.

The essential services include maintaining county roads, inspecting new construction to ensure compliance with state and federal building standards, managing county property, like the courthouse, and managing employees with a human resources department. All such programs could be sharply cut or even eliminated, but the commissioners decided the repercussions would be too great.

So to make up the last $800,000, the commissioners looked at the list of desirable services ? the wildlife biologist who helps determine development’s impacts on the environment, the community relations department, the senior center and its popular recreation programs, the county health and human services department, the annual donations to nonprofits in the areas of health care, community support, the environment, recreation and community access media.

They found alternative funding from state environmental grants and fees to cover the wildlife biologist’s salary, which left them with the other desirable services.

The $800,000 question for voters on the ballot this fall is whether they want to maintain those services.

“If the question doesn’t pass, the county commissioners have said that the services they list in the ballot question will be cut,” Oken said.

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