Moffat County commissioners approve controversial 2019 draft budget | CraigDailyPress.com

Moffat County commissioners approve controversial 2019 draft budget

CRAIG — Following a public hearing Monday, Oct. 15, the Moffat County Board of County Commissioners unanimously approved the county's draft budget for 2019.

But, as has become routine in recent years, the county's financial plan for the coming year includes sharp cuts to "non-mandated" services. Most notable among these is Moffat County Libraries and the Museum of Northwest Colorado; the former will see a 77-percent funding reduction under the proposed budget and the latter will be defunded entirely. These two potentially crippling cuts drew strong objections from both the libraries’ director and a member of its board.

The proposed budget itself — which commissioners stressed is still subject to public review, commentary, and potential revision through its statutorily mandated final approval date of Dec. 15 — totals $96,937,568, an $85,310 reduction from the $97,022,878 budgeted for 2018.

County Finance Director Mindy Curtis, however, said these numbers can be misleading, as a significant portion of the total budget is attributable to The Memorial Hospital, which is included in the overall budget because the hospital is a “component unit” of the county, even though it operates as a legally separate entity under its own county-appointed board of trustees.

Curtis said that, discounting the hospital's $60,373,587 budget, the remainder of the county budget for 2019 is $36,563,981, a 0.09 percent reduction from 2018.

She added that, while the hospital’s budget increased annually between 2014 and 2017, the county, itself, has been reducing expenditures since 2015. For example, from 2016 to 2017, The Memorial Hospital's actual spending increased by more than $8 million, while the remainder of the county's actual spending decreased by about $3.4 million.

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This funding disparity stems from the fact that the hospital's board of trustees, not the county commissioners, make funding decisions for that entity, coupled with the fact that revenue sources for the county and the hospital differ considerably. In fact, Curtis said, the hospital plays a very minor role in property tax expenditures.

While the county's other budgeted funds are reliant on tax revenue, which has sharply declined in recent years, the hospital, though partially funded by a voter-dedicated, 3 mill levy set to sunset in 2046, finds the lion's share of its budget in charges for services. In 2017, for example, it collected $1,211,192 in property taxes and $52,192,607 in charges for services.

Additionally, Curtis said, the sharp decline in oil and gas activity in Moffat County has resulted in a $1,801,124 reduction in annual revenue between 2012 to 2019, further complicating the county’s budgetary challenges.

"So, declining revenues and property tax, which support 25 percent of the county revenues, continues to be a budgetary issue," she said. "It's resulting in a valuation decrease since 2011 of $85,033,608 due to the lack of oil and gas activity in Moffat County. As property tax is collected the year after assessment, this has resulted in a $1.8 million decrease in annual revenue from the 2012 to 2019 proposed budget."

In response, she said, county commissioners have been working with her office to decrease expenses while exploring ways to boost revenue.

Among the decreases, Curtis said, the county has eliminated 16.45 "FTEs," or full-time equivalents, from the county's payroll since 2015. Further, she said, and also due to budget constraints, the county has, since 2014, only been able to give its employees a single, 2-percent cost-of-living adjustment, while the consumer price index has risen 12.68 percent over the same period.

She said this has also prompted commissioners to identify the "funds of most concern," which include General, Road and Bridge, Airport, Senior Citizens, Jail, and Human Services, and "prioritize available revenues and use them in the most productive ways."

Yet, the spending cuts are not keeping up.

Curtis said county commissioners have already been drawing upon reserves to balance the budget, adopting policies to "allow for the cash flow needed to provide services, as well as strengthen the county's future through long-term forecasting and dedicated reserves."

These policies include reducing most funds to 60 days operating reserve and realigning the remaining funds to provide services to citizens in the face of declining revenue. The reduction from this adjustment utilizes fund balances and also reduces transfers from the General Fund that subsidize the Senior Citizens (bus and meals), Jail, and Museum funds, she said.

She acknowledged, however, that this policy has a shelf life. According to the five-year projections included in the proposed budget, by the end of 2024, reserve fund accounts will have dwindled to just under $5 million, which represents only 69 days operating cash-on-hand.

‘A dead library’

During the period set aside for public comment only two people spoke; both are affiliated with the libraries, and both spoke in opposition to the proposed budget.

Sherry Sampson, director of Moffat County Libraries, said she objected to the budget due to its crippling cuts to that institution's finances.

Though it was budgeted at $523,130 in 2018, the library was still forced to draw upon its reserves to the tune of $37,086 to supplement operations that year. Now, faced with a proposed allotment of only $110,957 in 2019, Sampson said she "doesn't see how" the library can remain open the statutorily mandated 20 hours per week across all branches.

"So the … ($110,957) … you've proposed is a 77-percent cut to the library system, which makes it pretty impossible to keep the main branch open, let alone all three branches," she said. "According to Colorado Library law, you can cut the main branch to 20 hours per week, and that's a 60-percent cut from where we are now, so the way I see it, unless population is reducing by 60 percent, I don't see how we can provide library services to the same number of citizens in Moffat County."

She added that cutting library hours would do little to trim expenses, as the library would still be serving the same number of patrons.

"We'll still have the same number of people walking through the doors," she said, adding she foresees having to schedule more employees during the curtailed hours to manage and assist patrons while still attending to other library duties.

She also expressed concern with ensuring library safety for both employees and patrons — particularly children — in light of the funding reduction.

"When I first started years ago, the library budget for all three branches was around $700,000," she said. "We're down now to $100,000, so that's a big concern of mine to know how I even make that work … it's going to be difficult to do."

Alman Nicodemus, who sits on the Moffat County Libraries Board of Trustees, also testified in opposition to the proposed budget, saying that, while he appreciates the dilemma facing commissioners, he has grave concerns about the libraries budget and foresees the proposed cuts as a sure path to "a dead library."

"When I look at $100,000, just doing quick math in my head, we'd be forced to close the two branches — the one in Dinosaur and the one in Maybell — and I'm strongly opposed to that," Nicodemus said.

He added that, under the proposed cuts, the main branch in Craig would likely be chopped down to a bare-bones operation.

"We could probably pay our utilities, pay one full-time person and, if we're lucky, have one part-time, and that would be our staffing," Nicodemus said. "I just see a real decrease in the services we'd have. … We could probably maintain the books we've got and become, I guess I'd have to say, kind of a dead library."

No one accepted Commissioner Ray Beck's invitation to testify in support of the proposed budget.

Dedicated reserves

Following the public hearing, Commissioner Don Cook suggested the library might supplement its budget by drawing upon its own dedicated reserves, which commissioners agreed the county cannot take back and may be spent at the discretion of the library board.

"The money that you carried over is your money," Cook said. "So, it gives the library board some freedom or whatever to go in and try to develop their own budget. It's not just $110,000, guys. … There's money in there that you can go in and play with and kind of work schedules around to keep the library open as much as possible."

However, the budget itself seems to belie this suggestion.

On page 77, under the heading "Library Fund Summary, the proposed budget lists anticipated 2019 library expenses at $474,342. Given the $110,957 allotment for the library in 2019, the remainder of these expenses — $363,385 — will have to be drawn from the library's beginning reserve fund balance of $556,091, which would leave the fund with $192,706 at the end of 2019. Of that remaining amount, $111,852 is committed to the Memorial Fund, and another $61,788 is tied up in the mandatory 60-day operating expense reserve.

All this means that, as the budget stands now, the library is expected to end 2019 with only about $20,000 in useable reserves.

The Museum of Northwest Colorado is in a similar, albeit more dire, situation.

The proposed budget puts the museum's 2019 beginning balance at $367,123 and forecasts revenues at $57,900. With operating expenses budgeted at $272,878 and a budget allotment of $0, the museum will be forced to draw the rest of its 2019 operating expenses — $214,978, when anticipated revenues are realized — from its beginning fund balance, leaving the museum with a 2019 ending balance of $152,145, an amount that would keep the museum doors open perhaps seven or eight months into 2020. After that, the reserves would be exhausted and so too, apparently, would be the museum itself.

Both Museum Director Dan Davidson and Assistant Director Paul Knowles were in attendance, but neither chose to speak.

No sacred cows

Tangential to Monday's budget hearing was a possible means of redemption for both the libraries and the museum: Ballot Measure 1A, which proposes a 2.85 mill levy that would be dedicated solely to the two institutions.

If approved by voters in November, the levy would generate an estimated $700,000 annually for the libraries and $400,000 annually for the museum, which would restore both institutions to financial solvency.

But Moffat County rancher and former Moffat County Tourism Association Director Melody Villard questioned what would happen if 1A fails, particularly with regard to the libraries.  Noting that the library can only be closed by a vote of the people, Villard wondered how the county would fund the institution for the state-mandated 20 hours per week if 1A fails.

"So, if this passes, then it's a moot point," she said. "If it doesn't, there's 500 and some-odd thousand dollars they'd have to operate for two years or so. … So how do you propose keeping the library open the mandated 20 hours if the mill levy doesn't pass and voters choose not to close the library?"

Cook said that circumstance would "put it in the hands of the library board."

None of the commissioners specifically endorsed or opposed Ballot Measure 1A, but all agreed the proposed budget represents "a true picture of where we're at."

Commissioner Frank Moe added that any mill levy should be evaluated to "determine the highest, best use of the people's money. … Taxes are not necessarily the best way to go."

And while all three commissioners expressed support for the libraries and the museum, all agreed neither is a top funding priority.

"The museum is essential … to Craig, and the library is, too … but as far as county finances go, they're not mandated," Cook said. "There are no sacred cows in this county right now."

The proposed budget is available for public review and comment through the mandated final approval date of Dec. 15. It can be viewed at the Moffat County Courthouse and is also available online at colorado.gov/pacific/sites/default/files/2019P\proposedbudget10-15-18.pdf.

Contact Jim Patterson at 970-875-1790 or jpatterson@CraigDailyPress.com.