Garfield County’s proposed 2020 budget is balanced and fiscally conservative, according to financial staff.
But in order to complete important projects, the commissioners may draw down financial reserves – as they have for the past several years.
This year’s budget planning has “been a much more difficult set of circumstances in terms of revenues,” County Manager Kevin Batchelder told the board of county commissioners Oct. 7. “Trying to keep things at a status-quo level, if you will, has just been more difficult than past years given our revenue forecast.”
The revenue problems can be attributed to declining property taxes from oil and gas development, according to financial staff.
Property tax revenues, which include taxes on oil and gas
companies, dropped nearly 30 percent from 2016 to 2017. While they increased
slightly in 2019, the county expects next year’s tax revenue will be nearly $10
million lower than 2016 figures.
“In recent years we faced the challenge of a significant reduction in property tax revenues due to the decline in oil and gas production,” Batchelder said.
“For 2020, we’re projecting an increase of approximately $4 million in total revenues, including an estimate of an additional $1.5 million in property taxes, and an additional $1.5 million in sales taxes,” Batchelder said.
Commissioners have already expressed concern about the recent decline in new oil and gas leases this year.
As county finance director Theresa Wagenman explained, the county doesn’t see revenue from the oil and gas industry until two years after the companies make their profit.
Still, the proposed operating budget is balanced, meaning projected revenues cover the standard government services.
The proposed budget would dip into reserves solely for capital projects, building improvements and some major roadwork.
The capital expenditures in the proposed budget total $14.5
million, but that could be reduced later in the budget process.
“We are suggesting the commissioners take a serious look at
reducing this amount based on capital prioritization,” Batchelder told the
board Monday.
The capital projects include replacing the Glenwood Springs courthouse roof, the realignment of Red Hill Road in Carbondale, rebuilding Parachute Creek County Road 215, Sunlight tower replacement, among other projects.
Over the past several years, the county has drawn down
reserve funds, which were rather extensive five years ago.
Under the proposed 2020 budget, the county’s reserves will
be at their lowest in a decade.
“We are projecting the lowest fund balance reserve level
since 2009, when it was about $89 million,” Wagenman said.
The state recommends that counties have at least two months worth of unassigned reserve funding.
The county will have enough for less than four months of
operation in its general fund by the end of 2020, if no changes are made to the
budget.
On the whole, however, “things are looking OK for 2020,” Batchelder said. “For the last 4 years, we’ve been able to establish fiscally conservative budgets, and in 2020 we continue this trend. The operations budget as proposed is balanced in terms of expenditures to revenues, and we’ve been able to maintain our service levels.”
