Spending deficit expected in '09

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Other action

At its Tuesday meeting, the Moffat County Commission:

• Accepted Audrey Danner as the new District 2 commissioner. She was appointed to the position by the Moffat County Republican Party Vacancy Committee, which was required by law to make the decision in 10 days or Gov. Bill Ritter would choose.

Danner is required to get a bond in her name, paid for by the county, before she can take the oath of office. The bond protects against actions, such as financial mismanagement, harmful to the county and the taxpayers.

She expects to be sworn in later this week.

• Approved site and operations leases for The Memorial Hospital and the TMH Facilities Corp.

Officials have structured loan payments so that the county will lease the land for the new hospital to the Facilities Corp., which will then lease the land to the hospital.

TMH will make loan payments for construction to the Facilities Corp., which will then pay the lenders.

The U.S. Department of Housing and Urban Development maintains a "lease hold interest," which allows to agency to assume management of the hospital in the case it cannot pay its loans.

• Approved an intergovernmental agreement with the Grand Junction Housing Authority to manage 81 Section 8 housing vouchers in Moffat and Rio Blanco counties.

The agreement states the Housing Authority will manage the vouchers until June 30, 2010. After that, the agency would manage vouchers for existing users, but any unused vouchers would be transferred to Mesa County.

Also is that case, anytime a local voucher holder gave up a voucher - either because of going off the program or death, or for any other reason - that voucher would be transferred to Mesa County. Eventually, Moffat and Rio Blanco counties would not have any more vouchers.

• Approved two land leases for Pioneer Resources totaling about $100,000 in revenue for the county. If the company finds natural gas or oil on the land, the county would collect three-sixteenths royalty for what is sold.

County officials were told the company was no longer interested in the leases as of one week ago, but the company changed its mind because of troubles with other planned leases in Texas.

The lands total about 920 acres north of Lay.

Jeff Comstock, County Natural Resources Department director, warned the county probably will have to lower its required lease term from $110 an acre in the future. The economy will lower industry interest in leasing new land, and the county will have to adjust.

The Moffat County Commission said it likely will have to operate in a spending deficit in 2009 to avoid cutting services.

Commissioners Tom Mathers and Tom Gray approved the county's 2009 budget at the Commission meeting Tuesday morning, and said they believe every county expense in the books is important for the public good.

Newly appointed Commissioner Audrey Danner was not sworn in and did not vote on the budget.

The deficit

The budget shows the county will spend about $2.7 million more than it will earn in tax revenue in 2009; however, county officials do not expect the deficit to actually be that high.

Gray said he believes the county will be able to roll over about $2 million from the 2008 budget, about $500,000 from the general fund and $1.5 million from the Road and Bridge Department budget.

Although the department had its own 2008 budget concerns, including blowing its overtime allowance in March and paying high diesel prices, the county received better grant assistance than expected for large projects, Gray said.

If money rolls over into 2009 the way officials expect, the county's spending deficit would be reduced from $2.7 million to $700,000.

Revenue losses

County Budget Analyst Tinneal Gerber attributed the loss to decreasing oil and gas revenues, as well as Colowyo Mine's staged move into Rio Blanco County. The mine plans to follow an easy-to-reach coal seam south during the next few years, eventually relocating most activity by 2010.

Because of decreasing energy prices, energy companies are reporting smaller profits, which lowers property tax revenue from production.

In all, Gerber said the county foresees a 6 percent drop in property tax revenue, or about $600,000.

Sales tax revenue continues to be up, she added, with 2008 revenues more than 5 percent higher than what was collected in 2007.

That will help the county, but doesn't come close to matching property tax revenue, officials said. They also do not plan to bank on sales tax revenue remaining high because of a nationwide economic downturn, which has decreased consumer spending across the country.

Cost of doing business

While revenue has gone down, expenses are up.

Gerber said the county plans to increase employee wages by 5 percent to meet higher living costs.

Health insurance also went up this year by 13 percent, although some benefits were changed or reduced. Officials said they were forced to negotiate with the health insurance company after it planned to increase the county's premium by 28 percent.

Utility costs also are expected to go up about 11 percent, and the budget includes a 20 percent increase in the cost of fuel.

"That seems high if you look at today's prices," Gerber said, "but gas is very volatile, and we don't know what's going to come in the future."

Making cuts?

Gray and Mathers said they don't anticipate making any cuts to the budget because of the expected $2 million in rollovers from 2008.

However, if the numbers don't come in as hoped, Gray said, the first thing the county will do is cut capital expenditures, such as repaving 5.5 miles on County Road 7, replacing Road and Bridge equipment and repaving county parking lots around Craig.

In all, the 2009 capital budget amounts to about $4 million, although the county expects grants to pay for 70 percent of that.

If the county can rollover that $2 million from the general fund and Road and Bridge, then it will spend down its reserves before cutting expenditures, Gray said.

Overall, the county has reserves of about 42 percent of its total expenses, meaning it has saved an amount equal to almost half what it has spent.

In the current worst-case scenario - a $2.7 million spending deficit - the county would "only" reduce its reserves to about 38 percent, still more than its 35 percent goal, Gray said.

If deficits continue after 2009, the Commission plans to keep spending its reserves down to 30 percent before making budget cuts, he added.

Outside assistance

The spending deficit did not stop commissioners from providing $91,500 to outside agencies in 2009, which is equal to the amount given this year.

However, a past $1,000 contribution to Little Britches Rodeo was eliminated, as was a $7,500 contribution to the Craig Parks and Recreation Department.

The Commission did approve funding the Craig/Moffat Economic Development Partnership with $2,500. That number is up from zero in 2008 but down from $19,000 given in 2007.

The largest contribution was $47,500 to the Human Resource Council, which collects city and county dollars to redistribute to local nonprofits.

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