Lean times ahead, but Garfield County saved for a rainy day
Law offers tax relief to senior citizen property owners
September 16, 2010
As assessed valuations are bringing 2011’s diminishing tax revenue stream into sharp focus, Garfield County will see a drop in combined oil and gas production and property tax revenue averaging about 35%. While Garfield County revenues will take a serious hit to the bottom line, prior planning and foresight have helped the county prepare for this day.
Financial stability was the first priority Ed Green was tasked with when he stepped into the role of county manager a dozen years ago. The BOCC 12 years ago foresaw a need to build fund balance, and so Green put his mind to it.
“He has been successful in working with the BOCC to develop a conservative approach toward spending,” said Lisa Dawson, Garfield County Finance Director. “They built up our fund balance to ensure financial stability and stable services for the county in the event of an economic downturn. They planned this, knowing a large part of our revenue is dependent on the oil and gas industry, which is cyclical, so the possibility of fluctuating revenue is always present. ”
The result is that Garfield County is now sitting on a 2010 fund balance of approximately $100 million. A fund balance is similar to the retained earnings of an organization, or the amount of money in savings. “Incoming revenues, a conservative fiscal approach to spending and fund balance reserves should get us through the next few years of the economy. We are one of the few governmental organizations in the state, even the nation with such a healthy balance sheet.”
“We will continue to emphasize that adequate fund balances in light of the volatility of the oil and gas industry are necessary,” said Green. “This assures stable levels of service to Garfield County citizens, stable employment and benefits for our employees, and a strong assurance that we will not have to ask our taxpayers for tax increases to pay for the growing needs of Garfield County.
“Ed is frugal with hiring, running a tight ship in terms of adding new employees,” she said. “Wage expenses are only about 30% of the annual budget, which for an organization is really low. This gives us a lot of financial stability, so we can continue to provide services to the people of Garfield County without increasing taxes.”
Even with revenue streams slimming, there have been no furloughs at the county. “We don’t anticipate furloughs,” said Dawson. “When a position becomes vacant, we carefully analyze to see if it needs filled. We have 19 positions we are not filling after they have been vacated, and that will save over $1 million dollars next year across the board in the county.” Some departments have had a reduction in workloads, due to the slowing economy, such as the county clerk’s office and the building and planning department.
Fewer capital projects are on schedule for Garfield County next year. Additionally, the budget for operating expenses for 2011 will not increase. “We have asked all of our departments not to increase their operating expenses. Overall, we expect a 0% increase in operating expenses,” said Dawson.
Garfield County has experienced staggering growth in the past 10 years, but the recession and natural gas drop in price and demand means the county expects a significant decline in revenues in 2011. In the county’s five year plan, revenues are expected to rebound by 2014 to the 2006 level. Growth will be slow, but gas exploration, construction of principal, retirement and second homes may increase, construction of office buildings and business may expand, and the construction of municipal and community facilities and roads may continue.
Meanwhile, with the dip in tax revenues looming, Garfield County administrators are expecting to rely on their fund balances to cover shortfalls without having to sacrifice basic services for the county – the rainy day might just be here.
2011 Budget (adopted in late 2010)