Our View: County budget is on target


Routt County will have $27 million in reserve funds when the year ends. Fifteen years ago, it had almost nothing.

The ability to build such a significant fund is a testament to the county's fiscally prudent philosophy. It's a philosophy that not only should be applauded but also modeled.

Critics have argued that the county is sitting on too much in reserves. Concerns have been raised that the county is anticipating too far into the future, that it's a disservice to current taxpayers to set aside funds now for a road-grader that won't be purchased for 10 years.

Routt County resident Fred Wolf thinks such a large fund balance means the county needs to either spend more or tax less. "My problem with the county is they have too many assets, too much ... just sitting there," Wolf said. "They're not spending the money that comes in and, on top of that, there's no debt."

We would agree with Wolf that a point could come where the county's amount in reserves is too great in comparison to its budget. However, we don't feel the county has reached that point, and we feel the county is spending its reserves appropriately.

As it stands, the county anticipates reducing its reserves by $2.7 million in 2005. The reduction will come as a result of the planned purchase of development rights, road improvements, bridge replacement and certificates of participation for the new justice center. The total reserves are 34 percent of the county's total planned expenditures of $64.8 million in 2005.

In reality, the county's reserve balance is lower than it appears. The county has committed to using a significant portion of its reserves -- $9.4 million -- to construct the new justice center and remodel the existing Routt County Courthouse. Those funds are expected to be spent in the next six years, reducing the county's reserves to $11.7 million or about 52 percent of its annual operating expenses. That's a slightly higher percentage than Pitkin and Eagle counties but about the same or less than Summit and Grand counties.

The reason the county has been able to build such a large reserve balance is its "pay-as-you-go" philosophy, adopted and implemented in 1993. Under pay as you go, the county estimates the lifespan of equipment and the future cost to replace that equipment. The county then sets aside an amount each year so that when the equipment is due to be replaced, the funds are available and new debt is not required.

Such planning ensures that the county has the equipment necessary to perform its functions adequately, and that the equipment is kept in good working condition.

The large reserve balance improves the county's bond rating, ensuring favorable rates on money it does borrow. And the reserves provide the county with a measure of flexibility other entities don't have. For example, the county was able to absorb a 16 percent increase in insurance costs this year without requiring its employees to pay more for coverage.

Until the county is over-taxing residents, providing inadequate service or cutting essential services, it is hard to argue against a healthy fund balance. Such reserves provide fiscal flexibility now and protect against future financial crises. That's a benefit, not a hindrance, for taxpayers.


Use the comment form below to begin a discussion about this content.

Requires free registration

Posting comments requires a free account and verification.