County cuts spending heading into new year
December 18, 2013
The county government's spending will be down next year, and property tax rates won't change under a 2014 budget approved last week.
The county is projected to spend $7.3 million less in 2014, or 17.3 percent, than it did this year, said John Lewis, the county's finance director. The general fund will break even, but the commissioners will use $2.5 million from reserves for one-time grant expenses. The general fund is the checkbook the county uses to conduct day-to-day business.
The good news is that sales taxes are up 7 percent from this past year, Lewis said in Tuesday's final budget presentation. The bad news is that more than half of the county's revenue stream comes from property taxes, and property tax revenue is down 4.7 percent — $1.1 million.
Property tax revenue won't increase immediately, either, even with the slowly improving real estate market.
“The county cannot, by state regulations, engage in deficit spending. We can only spend the dollars we have.”
Eagle County finance director
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The county reassesses property values every two years and won't do it again until 2016. That means the county won't see a revenue increase until 2016, Lewis explained.
"We may see a 6 percent increase two years from now, but we won't know for sure for two years," Lewis said.
Revenue from licenses and fees are slow to rebound, as is interest income, Lewis said. The interest rates are so low that interest income is projected to remain flat.
Doing More With Less
All departments were asked to hold the line on expenses and did a "fantastic" job, said Keith Montag, county manager.
"That made this budget process much less painful than it could have been," said Sara Fisher, county commissioner. "Our charge has been to do as much or more with less money."
The commissioners voted unanimously to hold the line on the county's property tax rate. That rate, called the mill levy, has not changed in almost a decade.
Interest earnings peaked in 2007 at $3.7 million. With the recession and subsequent dive in interest rates, the county's 2012 interest earning fell to $889,704. By law, the county's funds can only be placed in extremely conservative investments, said Eagle County Treasurer Karen Shaeffer.
Grant funding changes
New this year is a $2.5 million fund earmarked for grant requests. Instead of hearing funding requests every week from various groups, the commissioners will hear requests once a year and make their decisions once.
For example, the commissioners are considering a $200,000 grant request for the 2015 World Alpine Ski Championships and at least another $250,000 for transportation services for the event.
Other requests include economic development projects, funding to help increase the number of visitors who fly into the Eagle County Regional Airport, as well as requests from various nonprofits and civic groups.
That $2.5 million will come from the county's reserves. The county commissioners — Jill Ryan, Kathy Chandler-Henry and Sara Fisher — said they want a $14 million in the general fund reserve, the county's rainy day fund. Right now it's $23,854,385.
Approximately 12 percent of every tax dollar stays with the county, Lewis said.
"The county cannot, by state regulations, engage in deficit spending. We can only spend the dollars we have."
The 2014 budget adds a department of environmental sustainability to the tune of $236,000. The environmental sustainability program was launched as part of a $4.9 million federal grant with two other counties. That grant expires this year.
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