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RBC I If you are interested in the answer to that question, this is the best time of the year to look into it – while next year’s financial plan is being formulated. Colorado budget law requires county governments to prepare a proposed budget by Oct. 10 and to adopt a final budget by Dec. 15 each year. Between now and early November, the proposed budget is reviewed and adjusted by the Board of County Commissioners. As a taxpayer and citizen of Rio Blanco County, this is your opportunity to review the proposed budget and ask questions.
The county’s proposed budget for 2012, as well as the adopted budgets and annual financial statements for prior years can be found on the county’s website at www.co.rio-blanco.co.us/budget. A copy of the proposed budget is also available for review in the clerk and recorder’s offices at the Meeker courthouse and the Rangely annex.
Proposed total expenditures for 2012 are $57 million, while projected revenues are $47 million. At first glance, this should concern any fiscally responsible taxpayer. However, there are a number of factors that play into the development of a governmental budget which account for what appears to be a plan to overspend.
When the county projects its revenues, it does so conservatively to prevent permanent growth in operating costs. On the other hand, when the county budgets expenditures, there are amounts built into the budget that in all likelihood will not be spent. Being over budget is illegal under Colorado budget law. Being over budget means spending more than is appropriated to be spent (there is no mechanism to address shortfalls in revenue).
One purpose of the county budget is to put a cap on spending for the budget year and there is only one way to increase that cap once it has been set. If unanticipated revenues are received that will cover spending in excess of the cap (like a grant for a project that was not budgeted), then the commissioners may formally amend the budget to accept the revenues and authorize additional expenditures.
To avoid budget law violations, all departments include some small percentage in their budget requests over the operating costs they usually need. There are also line items for contingencies in the budget that are very unlikely to be spent. Examples of contingencies are: aging facility emergency repairs, fuel price increases, wildland fires, potential refunds, additional elections (if required), reappraisal (if required by the state), costs in excess of preliminary estimates on capital projects, etc. There is $1.2 million to cover contingencies in the proposed budget for 2012.
Each year the budget includes projects the county plans to complete in the following year. Some of those projects were planned for in the current year but either didn’t get started or won’t be completed by the end of this year. Colorado law requires that even though the funds have already been collected and allocated for these projects, all appropriations expire at the end of the year, and any carryover must be budgeted again for the following year. Due to the magnitude of capital projects, this can cause total expenditures to exceed total revenues in any given year. RBC had approximately $8 million of planned capital projects in 2011 that will not happen in 2011 and will be carried over to the 2012 budget. The funds to do these projects will be in the county’s fund balances (savings accounts) at the beginning of 2012 and will not come from new revenues generated in 2012.
The above factors fully account for the $10 million of budgeted expenditures over budgeted revenues shown in the proposed 2012 budget.
Capital projects can also make budget numbers difficult to compare from one year to the next, especially with large projects funded mostly by grants. These projects are not included at just the amount the county must contribute to the project – expenditures must include the full cost of the project and revenues must include all grant proceeds as well. The 2012 proposed budget includes $13.8 million for the Meeker Airport project. The federal government will cover 95 percent of that cost, the state will cover 2.5 percent and the county will cover the remaining 2.5 percent. This one project is the cause of what appears to be a large jump in both revenues and expenditures over the 2011 budget.
The county’s budget includes a summary of each of the operating funds. This summary excludes the volatile nature of the capital plan. History shows that actual operating expenditures come in lower than budgeted while actual operating revenues come in higher than budgeted and that total expenditures are usually less than or equal to total revenues.
What is meant by a “balanced budget” is a budget where total spending does not exceed current revenues plus total available fund balance. When total revenues are more than total expenditures, fund balances will grow. They shrink when the opposite is true. Rio Blanco County’s fund balances remain stable while the economy has shaken the budgets of state and federal government. Rio Blanco County continues to preserve fund balances to protect against a prolonged slump in our economy and to provide for future capital projects.
The county commissioners are available at 878-9430 in Meeker or 878-9435 in Rangely. You may also contact your County Budget Director at 878-9446.