Sales tax growth, new construction, low oil prices strengthen Routt County’s 2016 budget | SteamboatToday.com

Sales tax growth, new construction, low oil prices strengthen Routt County’s 2016 budget

County budget tops $52 million

— The continuing recovery of Routt County property values and a projected increase in sales taxes will help create more room in the county's 2016 budget. The low cost of oil isn't hurting, either, as the county saves on both fuel purchases and the petroleum products needed to pave and seal its road system.

County Finance Director Dan Strnad said this week that sales tax growth of 7 to 8 percent could contribute another $400,000 to county coffers in 2016, and, as permitted under the Taxpayers' Bill of Rights, modest increases in new construction in the county and inflation will increase property tax revenues by 2.3 percent, or $333,000.

"I like having this modest growth that (doesn't) reflect steep peaks and valleys," in the economy, Strnad said.

The total 2016 budget, projected at $52,608,000 (it could change between now and final adoption Dec. 15), is down steeply from the $64.3 million approved by county commissioners for 2015. But the numbers are misleading; the majority of the change can be accounted for by the absence of last year’s roughly $12 million runway widening and paving project at Yampa Valley Regional Airport, $11.5 million of which was covered by federal and state grants that had to be accounted for in the budget.

Next year's capital budget includes $1.43 million for construction of "last mile" fiber optic cable intended to improve broadband services here, though Strnad said the project won't be carried out if a $718,000 matching Energy Impact Grant isn't awarded.

Routt County officials expect revenues to lag the $52.6 million of budget expenditures by $2.27 million next year and will make up the shortfall from reserves. The county routinely plans for funding equipment purchases, for example, from reserves. And in contrast to the recession years, Strnad said, 2016's pending from reserves is at a healthier level.

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But the rate at which the county has dipped into reserves in recent years is beginning to flatten, and based on long-term projections of county capital expenses, Strnad is reassured the trend is improving.

The biggest single portion of the county budget is attributable to personnel expenses, and for employees working in the governmental activities category (as opposed to business activities such as the airport), costs increased by $1.455 million, or 8 percent, to $20.32 million.

Factors contributing to the increase in personnel costs include the last of the measures county commissioners have taken during the past three years to restore salary cuts and thaw salary step increases that were frozen in the wake of the recession six years ago.

Perhaps the most concerning development in the county's employee compensation picture, however, derives from health benefits, where unexpectedly high medical claims have increased the county's exposure on its aggregate deductible by more than $1 million and caused county officials to assign 10 percent higher health premiums to the various departmental budgets.

"In 2015, the county anticipates a medical claim expense of approximately $3.8 million," compared to "the recent historical average of $2.4 million," Strnad said. "As a result, the county's deductible was increased 36 percent, from $2.8 million to $3.8 million in 2016."

The county is partially self-insured and has substantial funds available in its health insurance pool to help offset its increased deductible with its insurer next year.

////////Restoring employee compensation///

For county employees, this year's budget marks the restoration of compensation that was cut and pay raises that were delayed during the recession.

"Since 2009, the county has made significant changes to weather the impacts of a (recession-related) 31-percent decrease in assessed property values and a 37-percent decrease in sales tax," Strnad said. "The county cut employees’ salaries 10 percent, to 5 percent, reduced workforce, suspended the Step Compensation Plan from 2009 to 2013 and extended the replacement life of equipment and infrastructure."

County employees saw two steps restored in 2014 and two more in 2015, with the final of five due to be paid in 2016.

County commissioners this year conducted a new salary survey that established new pay rates for the different job descriptions intended to keep them competitive with other counties of similar size.

The 2016 budget includes a 1.5-percent, across-the-board pay increase as a result of the survey's findings.

/////Using oil to do more than fuel snowplows///

Depressed oil prices are projected to save the county $232,000 in the 2016 budget. That's based on an anticipated 18 percent decline in the cost of gasoline and 21 percent in the diesel that fuels the Road and Bridge Department's heavy equipment.

But the savings go to more than fuel. The county also uses petroleum in asphalt and chip-seal mix to carry out its road maintenance projects. Routt County plans to install paving overlays on 13.17 miles of county roads in 2016.

To reach Tom Ross, call 970-871-4205, email tross@SteamboatToday.com or follow him on Twitter @ThomasSRoss1

Routt County 2016 budget highlights

• The proposed 2016 budget is $52.6 million, down steeply from 2015 because a federally funded airport runway project has been completed.

• Personnel expenses in government services will increase 8 percent, or $1.455 million, to $20.32 million 2016.

• County revenues lag the $52.6 million of expenditures in the budget by $2.27 million next year, and as planned, the shortfall will be met from reserves.

• As permitted by the Taxpayers’ Bill of Rights, increases in new construction and inflation will increase 2016 property tax revenues by 2.3 percent, or $333,000.

• After medical claims climbed steeply in 2015, Routt County’s health insurance deductible will be more than $1 million in 2016.

Public county budget hearings:

5 to 5:30 p.m. Nov. 24, Commissioners’ Hearing Room, Routt County Courthouse, 522 LIncoln Ave., Steamboat Springs.

Final adoption: 10:55 to 11 a.m., Dec. 15, same location