Moffat County prepares for major revenue loss in 2011

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Looking over a recent audit of Moffat County's finances, County Budget Analyst Tinneal Gerber said she is glad to have sizable reserves.

If a "worst-case scenario" plays out, county officials expect to see general fund revenue decrease by 33 percent from 2009 to 2013, Gerber said.

That total amounts to about $3.4 million and is about one-third of all general fund revenue.

The biggest hit to the general fund will come between 2010 and 2011, when Gerber said the county expects to lose $3 million, or 28 percent, of current general fund revenue.

Thanks to its reserves, however, which total 30 percent or more of expenditures, the county should be able to make it through 2011 without major spending cuts, Gerber said.

Because of the reserves, the county's auditor, Paul Backes, of Avon-based McMahan and Associates, said Moffat County is among the more stable government entities he has reviewed since the recession began last summer.

"Our saving grace is really our reserves, and if we hadn't had those at this point, we'd be like Routt County," Gerber said, referring to across-the-board cuts and layoffs made by the Routt County Commission this year.

Moffat and Routt counties have one important difference.

Routt County's budget is largely built on sales tax, which is among the more volatile tax bases and comes in month to month.

Moffat County is based more on property tax, which is assessed two years before it's collected by the government.

The county's reliance on property tax means Moffat County can prepare in advance when it needs to make spending cuts. County officials know for certain there will be a major revenue shortfall in 2011.

"The bad part about 2011 is that it's property tax, so we know we're pretty close on target with that decrease because it was assessed this year," Gerber said.

This year has been particularly painful in regard to natural gas production, which has plummeted in Moffat County in part because gas produced here is selling for less than most other places in the country.

Reserves will carry the way for a while, she added, but they won't last forever, and 2011 may require everything, she added.

"If things continue to go like they are, we'll have all those reserves spent by 2011," Gerber said.

However, there are some possible mitigating factors that could spell the county's budget woes in 2011.

The ONEOK gas pipeline from Rio Blanco County to Wyoming is in the process of being built. If it finishes and has gas in it by the end of this year, then county staff can assess it for payment in 2011 instead of 2012.

Trapper Mining also is expanding, which could net more revenue.

At the same time, though, Colowyo Mine plans to move more of its operations to Rio Blanco County, meaning less revenue.

Despite the information available, the county has no concrete evidence revenue will continue to decline after 2011.

For all anyone knows, the regional economy could turn around by next year, driving up energy production in 2010, which would fill in revenue for 2012 and beyond. Up to a point, anyway, as the Colorado Constitution prevents any government from collecting more than 5.5 percent in additional revenue from one year to the next.

County officials are looking at ways to implement new efficiencies to save money. Two possibilities are combining maintenance staff to save on staff costs, and removing the Moffat County Courthouse payphones, which are used about twice a month but cost $75 monthly.

By addressing revenue shortfalls now, Gerber said officials hope to inform staff and the community about any cuts well in advance of them happening.

She added the Moffat County Commission does not plan to cut services in 2009 or 2010.

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