The photo, used to illustrate this editorial, dates from 2018, when the Archuleta Board of County Commissioners were presented a draft budget for 2019. The presenter was Finance Director Larry Walton, and the outlook wasn’t entirely sunny. But not many people heard the presentation.
I don’t have a photo of this year’s presentation of the 2021 draft budget. It’s possible very few people are interested in hearing about the new budget?
The Archuleta County budget for 2021 will not be the first to generate serious questions about the County’s financial future. Many of our Daily Post readers will remember the County’s financial mess back in 2007, when the Board of County Commissioners — Bob Moomaw, Ronnie Zaday and Robin Schiro — discovered, much to their dismay, that the County was showing “negative balances” in some of its fund accounts — a clear violation of Colorado budget laws. At one point that year, we appeared to be within a few days of the state government assuming control of the Archuleta County government.
Not only was the County bookkeeping in apparent violation of state law — the Finance Department was unable to account for $2.8 million, which had seemingly disappeared into thin air. 13 years later, we still don’t know exactly what happened to that money.
As a result of that experience, three subsequent Commissioners — Clifford Lucero, Steve Wadley and Michael Whiting — spent eight years in a ‘fiscally conservative’ state of mind, and managed to create a couple of new County savings accounts. One account, labeled the ‘Operating Reserve”, is meant to address short-term budget shortfalls, whenever the County was waiting for property tax revenues to roll in.
According to a presentation on October 6, Finance Director Larry Walton estimated the money in the Operating Reserve at about $3 million. Give or take.
Another new account was labeled the “Strategic Fund Reserve”. The Commissioners recognized in 2014 that we would probably see future financial crises similar to the Great Recession, and that a hefty savings account might allow the County to weather such a financial storm without the kind of mass employee layoffs that happened in 2007 and 2008.
We will be discussing the Strategic Reserve further in a moment.
As noted yesterday, in Part Two, Archuleta County Finance Director gives a summary presentation of the proposed County budget each year, in late September or early October, and then posts the presentation and budget detail on the County website, here.
Last year, Mr. Walton’s presentation included this chart, showing the ongoing debt burden from the Certificates of Deposit (COPs) used by the Board of County Commissioners to finance the new County detention center.(This year’s presentation did not include a similar chart.)
What we see illustrated in the chart — with the darker blue bars— is the debt created by the BOCC (without voters approval) to finance the construction of the new County jail. The annual payment on that COP debt will be about $800,000 a year, for quite a few years. By the year 2044, the taxpayers will have paid out about $20 million, to pay for a $14 million jail.
That amount does not include the cost of operating the jail, which next year will cost us at least $1.7 million, according to the draft 2021 budget. Adding the debt and operations together, we get a detention center cost of more than $2.5 million per year.
To put that number in perspective, in 2019 the Sheriff’s Office paid $599,000 to house all our inmates at the La Plata County jail. It will apparently cost considerably more to house them conveniently in our own jail. Where all the additional dollars might come from, we have cause to wonder.
But that’s all water under the bridge, so to speak. The question now facing the BOCC is, “Where will we find the extra $4 million needed to complete the new County Courthouse by the end of next year, so that the County can qualify for a $1.9 million grant awarded last December by the Colorado Underfunded Courthouse Facility Commission?” That grant requires the County to finish building a $5.8 million courthouse the end of 2021, in order to receive the money.
In this case, Certificates of Participation (COPs) don’t appear to be an option. (Because the County is already too far in debt?) So the proposed 2021 budget is proposing to allocate zero property tax dollars to the Road & Bridge Fund for 2021, and is also proposing to completely empty out the “Strategic Fund Reserve” — the rainy-day fund that previous commissioners spent four years creating. Thus leaving the BOCC and the County government “without that safety net.” From Mr. Walton’s October 6 presentation:
The $3.9 million is currently slated to be “consumed” out of the Strategic Reserve in 2021. Unless some additional grants magically appear… From DOLA, perhaps?
…leaving the Strategic Reserve at zero.
Archuleta County has witnessed a surprisingly prosperous summer — despite, or possibly because of, the global COVID crisis. Thousands of people who expected to use air travel for their vacation this year, apparently decided to drive to Pagosa Springs instead.
We’ve seen what appear to be record tourist visits, record home sales and prices, and record sales tax collections. Just prior to the Great Recession, County sales tax collections were typically around $3.3 million per year; they’ve more recently totaled around $6 million, with half of the sales tax accruing to the Road & Bridge Fund, and half to the General Fund. The current draft budget shows about $3.2 million in sales tax going to Road & Bridge. Meanwhile — as mentioned previously — the proposed 2021 budget allocates zero property tax dollars to Road & Bridge. That’s $1.4 million less than in 2019.
The BOCC discussion last Tuesday, and the Finance Director’s report, did not allow us to look into the future. Other County finance reports have indeed looked at where the County is headed, financially, but those reports did not envision the complete “consumption” of the Strategic Fund Reserve. I’m not sure if any of them predicted a detention center that would cost taxpayers more than $2.5 million per year. Maybe it’s better that we don’t look too far into the County’s future. Could be depressing, and Lord knows we don’t need depressing news right now.
As the Commissioners made clear last week, however, they simply couldn’t turn down a $1.9 million grant from the Colorado Underfunded Courthouse Facility Commission. No matter how much it costs.
Roads? Who needs roads… when we can have a new Courthouse?