Steamboat Springs With tax revenues expected to decrease in the coming year, Routt County is poised to dip $2.9 million into its financial reserves to maintain current levels of service in 2009.
If budget shortfalls of that magnitude continue - and are not worsened in a continued economic slide - the county will burn through its Road and Bridge infrastructure reserves by 2012 and its equipment pool reserve fund by 2016, county officials warned Thursday.
Revenue from sales and use taxes at the county level are anticipated to decline a combined $825,000 for the 2009 budget - a 12 percent decrease since the 2008 budget. But if ski season bookings decline and the construction slowdown is more serious than anticipated, the county could end up another $1 million short, Routt County Finance Director Dan Strnad said.
"Uncertainty is big here," Strnad said. "We're going to continue to monitor financial indicators (into 2009)."
In the meantime, the county will be conservative with its spending until sales tax figures from the early part of the 2008-09 ski season begin to come to light in February or March, County Manager Tom Sullivan said.
"We're not going to be spending a lot. Road and Bridge is going to be very frugal until we know where things are going," Sullivan said. "Just like the city (of Steamboat Springs), if we're going to start cutting back, it'll be early in the year."
Strnad called the $2.9 million shortfall "very significant," with an eye toward the types of cuts that would have to be made to absorb that figure. The project shortfall is larger than the budgets of nearly all county departments except those of Yampa Valley Regional Airport and the Road and Bridge Department.
If economic and revenue trends continue down their current path, the Routt County Board of Commissioners likely would make adjustments to spending before the "drop-dead date" in 2016, when Routt County's reserves would decrease to less than mandated levels, Strnad said.
"At some point, we're going to have to do something," Strnad said. "We're going to look at revenue-generating and cost-saving ideas to make this work."
The county is lucky that it has reserves it can dip into; otherwise, it would "already be hitting the wall," Strnad said.
Revenues vs. expenditures
Overall, the county's revenue streams are poised to decrease by 18 percent - nearly $11 million - in 2009.
"The only revenue area showing an increase is property taxes," Strnad said. "Everything else is pretty much going down."
Personnel costs are budgeted to increase only about 1 percent, just trailing behind 2 percent cost-of-living increases and increasing workers' compensation costs. By not filling vacancies, the county thus far has avoided any layoffs, Sullivan said.
Skyrocketing materials costs for Road and Bridge, however, are an obstacle for budgeting infrastructure expenses. The cost of roadwork per mile is budgeted to increase about 50 percent compared with 2008 figures, bringing overlay to $198,000 a mile and chip and seal to $46,000 a mile. Those figures translate into $840,000 more in maintenance costs in 2009.
Road and Bridge reserve funds are aimed at replacing the county's paved roads on a 20-year schedule and chip-sealing on a five- or seven-year interval. But as costs have increased, chip-sealing has been pushed back where possible, and entire projects - such as reconstruction and realignment of Routt County Road 14 near Stagecoach - have been postponed indefinitely.
"We not producing revenue anywhere close to paying for this," Strnad said. "We had such a change in our costs, we decided we had to look at maintaining out system rather than improving our system."
In November 2007, Routt County voters overwhelmingly shot down Referendum 1A, a property tax increase that would have raised an estimated $3.3 million or more a year for road improvements and other capital projects.
The odds of a similar measure making it back onto the ballot any time soon are slim, Sullivan said.
"I don't anticipate voters looking to approve any tax questions for four or five years," Sullivan said.
The Routt County Board of Commissioners will conduct a public hearing on the proposed 2009 budget at 5 p.m. Tuesday in the commissioners' hearing room at the Routt County Courthouse. The commissioners are due to formally adopt the final budget Dec. 15.