Commissioners approve $49.7 million budget

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RBC — Bracing for a worst-case scenario in its court case over collection of use tax, Rio Blanco County commissioners adopted a proposed 2009 budget Monday night of nearly $49.7 million.
That figure is $15.9 million more than the 2008 amended budget.
“Of the $15 million increase in appropriations, 64 percent, or $10.3 million is a rough estimate of the potential cost to Rio Blanco County related to the use tax court case,” said Diane Sorensen, county budget director, during a presentation at Monday’s budget hearing.
The $10.3 million represents 21 percent of the county’s total appropriations. Accounting for the potential loss of use tax made the budget process challenging.
“Use tax revenue predictions were a major concern in planning the 2009 budget,” Sorensen said. “If the Colorado Supreme Court does not overturn the court of appeal’s decision regarding definition of construction and building materials, the impact on the county could be millions of dollars in collected use tax. Additionally, the county would need to find another source of revenue to maintain current levels of services.”
Outside economic factors also made the budget process more difficult.
“The budget cycle is a detailed, time-consuming process under normal conditions,” Sorensen said. “This year has been more of a challenge, due to the recent financial turmoil and economic downturn. Revenues and expenditures were examined and adjusted several times during this budget cycle.”
As far as the use tax case with ExxonMobil, the county is waiting to find out whether the supreme court will hear its appeal. The county hopes to receive a response before the end of the year.
“It could be any time,” said Malcolm Murray, Rio Blanco County’s attorney in the case. “It normally takes them 90 to 120 days to consider these requests, although it can take longer.”
The county filed its petition with the court Oct. 10.
“Hopefully, no news is good news,” said County Administrator Pat Hooker. “But we’ll have to wait and see.”
In the county’s original proposed budget back in October, the potential liability in the use tax case was estimated at $12.5 million.
“The decrease in the possible liability is related to the decrease in the prediction of revenues in the 2009 use tax,” Sorensen said. “We just predict less revenue.”
Without the use tax contingency, total appropriations in the county’s 2009 budget would have been $35.4 million.
“That is a $5.3 million, or 18 percent, increase over the 2008 amended budget,” Sorensen noted.
As expected, the biggest increase in expenditures occurs in the use tax fund.
“It is budgeted at 590 percent in appropriations,” Sorensen said. “This again is related only to the possible liability.”
The road and bridge fund has the second largest increase in expenditures, at 65 percent.
“There are four major projects for road and bridge planned for 2009, totaling approximately $4.4 million,” Sorensen said. “This does not include the County Road 5 improvement project, which is accounted for separately in the Impact Fee Trust Fund.”
Capital projects total $6.3 million, Sorensen said, and include the County Road 5 project, airport projects, remodeling of the Fairfield Community Center, and land and engineering costs for a new justice center.
Personnel, at $11 million, represents 22 percent of the county’s total costs. The average cost for the county’s nearly 160 employees is $69,000 per employee, which includes salary, the county’s portion of FICA (Federal Insurance Contributions Act), the county’s portion of employees’ retirement, Workman’s Compensation and insurance.
The projected cost for public safety is $4.8 million and represents 10 percent of the county’s total appropriations. Changes include the addition of five new positions to the sheriff’s office.
“The new positions would allow two dispatchers on duty at all times, 24-hour-a-day patrol coverage for the first time in the history of the county, and one position is a transport position in the jail, which will help cut back overtime, due to daily transports of prisoners to other county jails,” Sorensen said.
On the revenue side, the county coffers are expected to increase to $39.7 million, a jump of 7 percent from 2008.
“Intergovernmental is the largest source of revenue for the county at $9.1 million,” Sorensen said. “This source of revenue includes state funding, capital grants, operating grants, mineral lease payments, etc.”
Property taxes, which represent the county’s second biggest revenue source at $7.4 million, are projected to increase 15 percent over 2008. Impact fees on construction are the county’s third biggest revenue source at $4.3 million and predicted to increase 185 percent in 2009.
However, sales tax revenue is projected to decrease 33 percent, to $3 million in 2009.
“This revenue is expected to slow considerably during the economic downturn,” Sorensen said.
Total fund balances at the end of this year are estimated to be about $50 million. At the end of 2009, fund balances are projected to be around $41 million, slightly lower than the ending fund balances in 2007, Sorensen said.
“There is good news,” she said. “Rio Blanco County is a financially healthy organization. Fund balances have continued to grow significantly since 2006.”