Yesterday in Part One, I shared the statement, below, because I find it totally fascinating that a Board of County Commissioners would spend at least $150,000 developing a plan for a $44.55 million sales tax increase to build unspecified County facilities, and then make the assumption, in their 2019 budget, that the ballot measure was going to fail.
From the October 9 budget presentation:
We note, the County assumes, in its budget for 2019, “the ballot measure will fail.” That would be Ballot Measure 1A.
The ballot title for Ballot Measure 1A reads, in part:
Shall the County of Archuleta taxes be increased $2,970,000 (first full fiscal year dollar increase) annually and shall the County of Archuleta debt be increased by an amount not to exceed $19,200,000, with a maximum repayment cost of $25,800,000… beginning January 1, 2019 with a termination on December 31st following the date on which the revenue bonds, refunding bonds or other financial obligations approved hereby are paid in full (but in no event shall such termination occur later than December 31, 2033)…
$2.97 million annually in new taxes, collected over 15 years. That’s $44.55 million.
When you make an assumption that you must build a new Detention Center and a large new Sheriff’s Office — due to a roof leak in 2015, and some complaints about lack of ventilation in a 1991 building — and you simultaneously assume that the taxpayers will refuse to fork out millions of dollars to accommodate your need, well…
… obviously, you need an annual budget that reflects your assumptions.
I was in attendance on October 9, when County Finance Director Larry Walton discussed these assumptions with two of our three County commissioners in a public meeting. Mr. Walton also shared other budget assumptions about revenues and expenditures, which were not directly related to the impending failure of Ballot Measure 1A, but he made it clear that the overall budget was designed in the shadow of that expected failure.
For whatever reason, Mr. Walton’s presentation did not provide actual amounts of the estimated County sales and property tax collections for 2019. (You can download Mr. Walton’s entire budget Powerpoint file here.) So we will be guessing at the approximate amounts, based on the graphs that Mr. Walton did present:
Mr. Walton:
“Sales tax, which has been reported on frequently in the paper and has been going up somewhat relentlessly, and which we conservatively project to go up another 2 percent in 2019, it makes up — to a certain extent — for the property tax.”
Mr. Walton told us the County’s property tax collections had been negatively impacted by the Great Recession. But he noted that the County’s sales tax collections had seen a “$9 million net increase” since 2009, as he illustrated in his graph:
(The weird $1 million “bump” in 2010 was the result of a State of Colorado Department of Revenue audit, which provided an unexpected sales tax windfall that year.)
In 2009, the County was collecting about $3 million a year in sales taxes, and about $7.7 million in property taxes. About $10.7 million, in total.
Then the Great Recession caused property tax collections — and property values — to drop, while sales taxes continued to increase. Based on the graphs, the total sales and property tax collections expected for 2019 appear to be about $11 million. Slightly above the totals in 2009.
But… what if we were to compare the County’s proposed 2019 budget to the budget numbers from 2006 — before the Great Recession? Might that be an interesting comparison?
Here are the totals Mr. Walton projected for 2019:
Projected revenues of about $27.7 million. Expenditures of about $33.4 million.
And here are the numbers from the 2006 budget, prior to the Great Recession:
Projected revenues of about $17.5 million. Expenditures of about $19.9 million.
The County was operating on less than $20 million in 2006. Our current commissioners expect to spend $33.4 million next year — even without voter approval of a new sales tax increase. But they’ve still been unable to properly maintain their own Courthouse building… or our roads.
Of course, the current commissioners would really like to see us vote to increase our taxes by $44.55 million. It’s so much simpler to build shiny new facilities, rather than upgrade and maintain what we already have.
However, if the voters do indeed reject the 1A sales tax increase, then the BOCC will have to struggle to get by on a mere $33.4 million — a mere 67 percent more than they had before the Great Recession. (I wonder how many Archuleta County households have seen their income increase by an additional 67 percent since 2006?)
In order to just eke by, Mr. Walton explained, the BOCC will have to cut the Road and Bridge budget by $250,000.
“Back in 2015, we modified the distribution of our property tax — which we can do once a year, by adjusting our mill levy distribution — and we added over $500,000 a year to our Road and Bridge budgets out of the General Fund, to beef up what they were able to spend on road capital improvements.
“Because we’re assuming the ballot initiative will fail, we would have to take half of that back, starting in 2020, back to the General Fund to try and make the projections work, to cover the cost of a facility — if it’s not otherwise funded.”
Commissioner Michael Whiting asked:
“Larry, what’s the assumed cost of a facility?”
Mr. Walton:
“Obviously, we do not have a well-defined, professionally-costed set of assumptions for the ballot initiative failing. There would be a lot of decisions, that you guys would be making, about what that looks like. But we had to do something to get a feel for it.
“So we assumed that what construction that did take place, instead of being almost $20 million, it would be more like $14 million. And we think the $14 might be a little high. But because we’re conservative, we’re sticking with that.”
No doubt we are all sorry that the County has not obtained a well-defined, professionally-costed estimate for what they will do, after Ballot Measure 1A fails. But here’s a well-defined, professionally-costed estimate for a state-of-the-art jail, provided in 2016 by a team of professional architects hired by the BOCC:
The architects priced out an 18,000 square foot jail at $7.2 million. (Our current, abandoned jail is about 9,000 square feet.) They added a 19,500 square foot Sheriff’s Office, for $4.6 million. (The current, abandoned Sheriff’s Office is about 5,000 square feet.) They tacked on site work and 27 percent “soft costs.”
Total price, for a jail twice the current size, and a Sheriff’s Office three times the current size — and not including ‘Remodel Existing Jail Building for Courts and Probation’?
Looks like $15 million. For something really, really big.