Routt County 2014 Proposed Budget Document

8/13/2019 Routt County 2014 Proposed Budget Document

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2014 BUDGET

136 6th Street, Steamboat Springs, CO 80477 Web: http://www.co.routt.co .us

December 3, 2012

ROUTT COUNTY

The mission of Routt County is to efficiently deliver a balance of public services and infrastructure to provide a safe and healthy place to live

for present and future generations.
http://www.co.routt.co.us/http://www.co.routt.co.us/http://www.co.routt.co.us/http://www.co.routt.co.us/http://www.co.routt.co.us/


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2014 Budget OverviewThe 2014 Routt County budget projects $60,856,000 in revenues and $71,104,000 in expenses resultingin $10,248,000 of expenses over revenues, and after removing $518,000 of noncash expenses such asdepreciation, the use of reserves is $9,730,000. The 2014 budget as compared to the 2013 budget

includes a $15,472,000 or 34% increase in revenues and a $22,308,000 or 46% increase in expenses. The2014 budget is separated into governmental activities and business type activities as follows.

Governmental Activities include the Countys basic services such as Property Tax Administration,Public Safety, Human Services, Community Services, Road and Bridge and Administration. Revenuesare anticipated to increase $1,070,000 or 3% to $38,221,000, expenses are anticipated to increase$7,124,000 or 18% to $47,148,000 and results in expenses over revenues of $8,927,000. The decrease inreserves results mainly from planned Road and Bridge infrastructure replacement projects and from twointerfund loans made by the Road and Bridge Fund to the Yampa Valley Regional Airport for capital

projects.

The Countys base property tax revenue, which funds governmental activities, is anticipated to increase

$456,000 or 3.4% and is limited to this increase by the Taxpayers Bill of Rights (TABOR).

Sales tax from all sources is anticipated to increase $311,000 or 6% based on 2013 collections.

The modest growth experienced in the Countys two largest revenue sources property tax and sales taxremains tentative given the significant amount of uncertainty in the economy.

In 2014, a 2% cost of living increase for all employees and the partial reinstatement of the Countys StepCompensation Plan were approved. The resulting increase in compensation is $888,000 or 7%. Thecompensation increase is being funded by the increase in property and sales tax revenues and by adecrease in health insurance costs.

Health insurance expense decreased $300,000 or 10% due to actual costs being lower than premiums forseveral years and the Countys ability to fund an adequate reserve by the end of 2013 for its partially sel f-funded insurance plan started in 2011.

The County budgeted $1.5 million or $750,000 in 2014 and $750,000 in 2015 for overlay andrehabilitation improvements on County Road (CR) 14 Phase IV. Phase IV work covers the portion of CR14 from Yellow Jacket Pass north to Colorado Highway 131. The original cost estimate for CR 14 PhaseIV reconstruction was $13 million and funding of this magnitude is not available so the County is startingon Phase IV in 2014 and 2015 with the hope to continue major improvements in the future.

In 2014, the planned replacement of Road and Bride infrastructure includes two major bridges partiallyfunded by federal grants, 21 miles of overlay and 24 miles of roads will be chip and sealed. Total

infrastructure expense is $8.7 million and is primarily funded by the Road and Bridge funds reserves .

Real estate values are slowly trending upward for single family homes and condominiums andforeclosures have decreased; however, the Countys assessed valuation is anticipated to decreaseapproximately 12% in 2014. The decrease in the Countys assessed valuation since 2010 isapproximately 31%.

For 2014, the County was able to absorb the 12% decrease in assessed valuation and the 3.4% increase in property taxes allowed by TABOR because of its available TABOR mill levy credit. Based on the

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Countys 2014 assessed valuation, the Countys assessed valuation could decrease by an additional 13% before a reduction in property tax revenue is required due to the TABOR mill levy limitation.

The County is being impacted by a number of negative economic indicators such as low consumerconfidence, the Countys high unemployment of 5.2%, the high national unemployment rate of 7.3%, anaverage of 497 families on food assistance for the first nine months of 2013, an increase of 8% from2012, the European financial situation, the ongoing and looming Federal budget battle, the continued

budget sequestration with deeper spending cuts scheduled in 2014 and the large Federal deficit.

Business Type Activities include the Yampa Valley Regional Airport, the Regional BuildingDepartment, the Phippsburg Water and Sanitation System, and the Milner Sanitation System. Revenuesare anticipated to increase $14,396,000 or 175% to $22,640,000, expenses are anticipated to increase$15,178,000 or 173% to $23,961,000 and results in expense over revenues of $1,321,000. Afterremoving noncash expenses such as depreciation, reserves decrease $803,000. The business typeactivities are fundamentally financially self-sufficient by charging fees for services and receiving grantsfrom state and federal governments.

Business type activities are being impacted by the same negative economic indicators as governmentalactivities. Yampa Valley Regional Airport has experienced a significant decrease in enplanementsresulting from the recession which also negatively impacts landing, car rental and parking fees. The 2014

budgeted operating loss is $326,000 for YVRA. The County and the Steamboat Ski Resort along withlocal other stakeholders plan to reduce operating losses in the future.

In 2014, the approved 2% cost of living increase for all employees and the partial reinstatement of theCountys Step C ompensation Plan increased compensation expense by $169,000 or 7%.

Operations expense increased $1,412,000 or 55% to $3,974,000 in 2014 due to the contribution fromYVRA to the Town of Hayden for the construction of a water tank storage system. Financing for thiscontribution will come from a $1.5 million interfund loan from the Road and Bridge Fund.

The most significant change budgeted in 2014 is an increase in capital expense of $13,402,000 or 455%to $16,345,000. Capital expenditures increased primarily due a $15.1 million runway rehabilitation andservice road project at YVRA. This project will be funded 100% by Federal Aviation Administration(FAA) grants and passenger facility charges, but YVRA will receive a $2 million interfund loan from theRoad and Bridge Fund to cover the timing difference between when funds are expended and when FAAfunds are received by YVRA. The interfund loan is planned to be paid off in 2015.

Conclusion

The County continues to analyze the budget wherever possible to effectively increase revenues anddecrease costs. Since 2009, the County h as made significant changes to weather the negative impactsof a 31% decrease in assessed property values and a 37 % decrease sales tax. In response, the County cut

employee salaries 10% to 5%, implemented a reduction in workforce, suspended the Step CompensationPlan, delayed performing a compensation market survey, cut operating expenses and extended thereplacement life of equipment and infrastructure.

Right now, the long-term forecast projects a balanced budget. The 2014 budget is a snapshot in time based on both known factors and certain assumptions. This financial plan will need to be revised by theCounty to respond to changing economic conditions.

As new financial information becomes available, management will respond in an appropriate manner tomaintain the Countys overall financial well being.

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REVENUES / INTERFUND LOAN PROCEEDS

1,070,000$ Governmental Activities revenues are anticipated to increase $1,070,000 or 3% from$37,151,000 budgeted for 2013 to $38,221,000 budgeted for 2014. The primary reasonsfor the changes in revenues are noted below.

22,640,000$ Business-Type Activities revenues and interfund loan proceeds are anticipated to

increase $14,396,000 or 175% from $8,244,000 budgeted for 2013 to $22,640,000budgeted in 2014. The primary reasons for the changes in revenues are noted below.

PROPERTY TAX

242,000$ Property tax revenue from all sources is anticipated to increase $242,000 to $17,682,000or 1% over the 2013 budget. The primary changes in property tax are as follows.

The property tax increase, as defined in the following sentences, is split between RouttCounty base property taxes and voter approved property taxes. Base property taxes providerevenue for basic services delivered by the General Fund, Road and Bridge, E 911Communications and Human Services. Voter approved property taxes provide revenue for the Purchase of Development Rights Program, Museums and Developmental Disabilities.

533,000 The Countys base property tax revenue is anticipated to increase $456,000 or 3.4% and islimited to this increase by the Taxpayers Bill of Rights (TABOR). The TABOR property taxrevenue limit increase of 3.4% is composed of a .7% increase from new construction and a2.7% increase from inflation. The aforementioned revenue limit is increased by $107,000 inabatements and refunds and decreased by a $30,000 TABOR inflation estimation variance.

(363,000) Property tax for voter approved mill levies, which are not subject to TABOR, decreased$363,000 or 12%. The decrease is due to the decline in assessed valuation. Overall, RouttCountys 2013 net assessed valuation decreased $130 million to $983 million or 12%.

113,000 Specific ownership tax is collected on vehicles and allocated to the county and each taxingentity based on the percentage allocation of property tax to each taxing entity. Based on 2013collections specific ownership taxes allocated to the County are anticipated to increase$113,000 or 12%.

SALES TAX

311,000 Sales tax from all sources is anticipated to increase $311,000 to $5,232,000 or 6% abovethe 2013 budget. Sales tax is composed of a 1% sales tax, a 1% building use tax and a 1%auto use tax.

206,000 Sales tax is anticipated to increase $260,000 to $4,592,000 or 6% above the 2013 budget.This increase is based on actual 2013 sales tax collections increasing 8% from 2012 actual.

Due to the seasonality of the Christmas and New Years holiday in 2012 a large increase inJanuary 2013 was recognized in sales tax. The County is anticipating an seasonally adjustedsales tax increase of 3% in 2013 and 2014 for a total increase of 6%. There is someuncertainty with this projection given the possibility of changing economic conditions.

28,000 Building use tax is anticipated to increase $28,000 to $235,000 or 14% above the 2013 budget. The 2014 budgeted Building use tax of $235,000 is equal to 2010 actual collections.Building use tax is projected to be $314,000 in 2013. The Building use tax budget has been

projected conservatively given the volatility of the building industry.

23,000$ Auto use tax is anticipated to increase $23,000 to $405,000 or 6% above the 2013 budget.The increase is based on actual auto use tax collections and County residents purchasing carsoutside of the County.

GOVERNMENTAL ACTIVITIES

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STATE

14,000$ State revenues are anticipated to increase $14,000 to $3,870,000 or 0% above the 2013budget primarily because of the changes in the revenues noted below.

(73,000) Detention Center court security grants decreased $73,000 to $6,000 in the 2014 budget. Thecourt security grants have primarily been used for the installation of bullet proof glass.

93,000$ Human Services state revenues have increased $69,000 due to the County purchasing anadditional child care allocation in order to potentially eliminate the current waitlist for clientsat or below 130% of the federal poverty guidelines. The child care allocation providesfunding for children at the various child day care providers. In addition, the FamilyPreservation allocation increased resulting in a $24,000 increase in State revenues.

FEDERAL

620,000$ Federal revenues are anticipated to increase $620,000 to $6,692,000 or 10% above the2013 budget primarily because of the changes in the revenues noted below.

528,960 Road and Bridge was awarded a $529,000 grant for the replacement of the Butler Creek Bridge on County Road 27. The grant funds 80% of the $661,000 cost of the bridgeconstruction.

200,000 Human Services federal revenue for food assistance is expected to increase by $200,000 or 13% to $1,800,000 due to the continuing increase in the demand for the program related tothe recession. In 2012, an average of 459 households were served per month as compared toan average of 497 households per month for the first nine months of 2013, which represents a8% increase.

19,000 Administration revenues increased $19,000 to provide administrative support due to theanticipated increase in Medicaid participation related to Colorado electing to expandMedicaid benefits under the Affordable Care Act.

45,000 Child Welfare federal revenue increased $45,000 based on the historical closeout process of the Colorado Department of Human Services which allows for funding of a County's over expenditures (those greater than the allocation) using funds that were underutilized by other

counties.35,000 Child Support is also a federally funded program and revenues are expected to increase by

$35,000 to fund increases in personnel and a contribution to the Fatherhood program. TheFatherhood program provides an opportunity for fathers to be involved and engaged withtheir children.

28,000 Income Maintenance includes a federal grant of $28,000 passed through Northwest ColoradoVisiting Nurses Association to fund a health insurance coverage guide who will assist citizensin navigating the health insurance exchange and purchasing health insurance as required bythe Affordable Care Act.

15,000 Adult Protective Service (APS) is a new allocation designed to cover County costs for personnel and operations for APS activities related to the increase in the aging population of "at-risk" adults being abused or neglected requiring County intervention. The allocation isestimated to generate $15,000 in federal revenue.

(266,000)$ Communications was awarded a $1,547,000 Department of Justice Rural Law Enforcementgrant, funded by the American Reinvestment and Recovery Act, to replace the Computer-Aided Dispatch/Records Management System (CAD/RMS) used by several jurisdictions inthe County. The 2013 budget included $266,000 to complete the project. The CAD/RMS

project was completed in 2013 and is budgeted to use the remaining $266,000 of grant funds.

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FEES

107,000$ Fees are anticipated to increase $107,000 to $4,179,000 or 3% above the 2013 budget primarily because of the changes in revenues noted below.

32,000 Clerk fees are anticipated to increase $32,000 or 7% to $505,000 over the 2013 budget. Theincrease in Clerk fees is attributable to an increase in real estate sales based on 2013 actualcollections and similar real estate sales in 2014.

18,000 Fair fees for all programs increased $18,000 or 47% to $55,000. The change is mainly dueto the $16,000 increase for the annual fair program from entertainment fees of $9,000 torecognize the popularity of the Demo Derby event from recent years and approximately$4,000 in advertising and home arts entries anticipated due to the 100th anniversarycelebration.

19,000 Planning fees are anticipated to increase $19,000 or 28% to $87,000 over the 2013 budget.The increase in planning fees is based on past historical planning fee collections andcontinued oil and gas exploration in 2014.

(61,000) Public Trustee fees are anticipated to decrease $61,000 because of a decline in the number of foreclosures in the County. The number of foreclosures budgeted for 2013 was 200, ascompared to 150 foreclosures budgeted for 2014. The number of foreclosures for 2013 is

projected to be at 150.(26,000) Treasurer fees are budgeted to decrease $26,000 due to a 12% decrease in Routt County's

2013 net assessed valuation. Treasurer collection fees are projected to decrease 4% due to thedecrease in assessed valuation.

124,000$ Road and Bridge fees increased $124,000 or 145% to $210,000 primarily from anticipatedoil and gas studies fees charged to oil and gas companies for $75,000, an increase in dustretardant fees charged to various governmental and private land owners for $25,000 and theremainder from various minor fee increases associated with cattle guards, excavating permitsand over size permits.

OTHER

(374,000)$ Other revenues are anticipated to decrease $374,000 to $395,000 or 49% below the 2013budget primarily because of the changes in revenues noted below.

(98,000) Human Services' First Impressions program (FI) decreased $98,000 in local support. Thespecific project being funded by one grant will be completed in 2013. Another grant

budgeted in 2013 was not awarded because the grantor's funding focus changed to be "directhealth" focused. A third grant budgeted in 2013 was not sought in 2013 due to the timing of their grant cycle so it was not rebudgeted in 2014. First Impressions also completed agrantor's 5-year beneficiary cycle which resulted in FI becoming a regular grant recipientinstead of a beneficiary for a lesser amount.

(50,000) Interest income in 2014 has been budgeted using a projected interest rate of .35% ascompared to the .5% interest rate used in the 2013 budget.

(226,000)$ Proceeds From the Sale of Assets are projected to decrease $226,000 from $236,000 in2013 to $21,000 in 2014 due to the scheduled replacement and subsequent sale of twograders, a plow/dump truck and two weed/sand trucks in 2013 versus only one plow truck in2014.

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INTERFUND LOAN RECEIPTS

155,000$ Interfund loan receipts increased $155,000 to $165,000 over the 2013 budget andconsists of $155,000 in payments from Yampa Valley Regional Airport (YVRA) and $10,000from the Milner Sanitation System. In 2013 there was one interfund loan with Milner for financing the cost to lengthen a discharge line. For 2014 there are two budgeted interfundloans with YVRA.

The first interfund loan for YVRA is for $1,500,000 to finance YVRA's contribution to theTown of Hayden for the construction of a Water Tank Storage System. Debt Serviceassociated with this loan is $125,000 per year over a 15 year term with a 3% interest rate.

The second interfund loan for YVRA is for $2,000,000 at 3% for one year. This loan is tocover timing differences between when costs are expended for the runway rehabilitation,vehicle service road and related rehabilitation projects and when Federal AviationAdministration (FAA) grant funds are disbursed to YVRA. The construction project costs are

budgeted in 2014 and the associated FAA funding is in 2014 and 2015.

STATE

1,723,000$ State revenues are anticipated to increase $1,723,000 to $2,595,000 or 198% above the2013 budget because of the change in revenues for Yampa Valley Regional Airport (YVRA)as noted below.

Yampa Valley Regional Airport budgeted state revenue of $2,595,000 for 2014 consists$2,000,000 of funding toward the runway rehabilitation, vehicle service road and other

pavement rehabilitation projects, $126,000 for completion of the master plan update,$356,000 for the fire truck replacement and $113,000 of State Aviation fuel tax. Budgeted2013 state revenue included $400,000 toward the update of the $720,000 master plan,$374,000 toward the $700,000 fire truck replacement and $98,000 of state aviation fuel tax.

FEDERAL

9,105,000$ Federal revenues are anticipated to increase $9,105,000 to $10,632,000 or 596% abovethe 2013 budget because of the changes in YVRA revenues noted below.Yampa Valley Regional Airport federal revenue for 2014 of $10,632,000 consists of $345,000 of Passenger Facility Charges (PFC) revenue and $10,287,000 of federal grants.The federal grants will be utilized for funding the runway rehabilitation, vehicle service roadand the other pavement rehabilitation projects. The 2014 Federal grant revenue consists of Federal Aviation Administration (FAA) Airport Improvement Program (AIP) entitlementfunding of $1,787,000 and AIP discretionary funding of $8,500,000. The Federal grant

revenue for 2013 of $1,527,000 consisted of FAA AIP entitlement funding $1,080,000 tofund 90% of the design costs related to the 2014 construction projects. In addition, $77,000of entitlement funding will be utilized to fund 90% of the cost of a FAA mandated safetymanagement system, originally budgeted in 2012. PFC revenue for 2013 was budgeted at$370,000.

BUSINESS TYPE ACTIVITIES

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FEES

(72,000)$ Fees are anticipated to decrease $72,000 to $5,714,000 or 1% below the 2013 budget. The primary reasons are noted below.

(176,000) Yampa Valley Regional Airport fees decrease $176,000 to $4,667,000 or 4% below the2013 budget. Landside fees for 2014 are $243,000 less than the 2013 budget due to a$181,000 decrease in rental car fees from a new 5 year contract. Parking fees and shuttle feesdecline by $42,000 and $20,000 because no flights are budgeted for April and May 2014 dueto runway closure during the runway rehabilitation construction project. Restaurant feesincrease $67,000 due to price and volume increases budgeted for 2014.

102,000$ Regional Building Department fees increase $102,000 or 13% to $900,000 over the 2013 budget. This increase represents the current projected levels of building activity, resultingfrom an improving local economy.

OTHER

140,000$ Other revenues are anticipated to increase $140,000 to $199,000 or 237% above the2013 budget because of changes in YVRA revenue as noted below.

Other revenue for 2014 consists of $155,000 of YVRA customer facility charges (CFCs)

assessed to the rental car companies, miscellaneous income primarily for YVRA of $17,000,local contributions of $16,000 to YVRA and $5,000 of local contributions to PhippsburgWater and Sanitation System for a water rights study. Interest income for 2014 amounts to$6,000. The CFCs for 2014 will be utilized for debt service payments related to the interfundloan for the contribution to the Town of Hayden. The 2013 budget of $59,000 consisted of $21,000 of local contributions to YVRA, miscellaneous income primarily for YVRA of $28,000 and interest income of $10,000. There was no CFC revenue budgeted for 2013

because the rental car company contracts expired in 2012 and there was not completecertainty that CFC revenue would continue with the new contract and possible new rental car companies.

INTERFUND LOAN PROCEEDS

3,500,000$ Interfund loan proceeds increased $3,500,000 or 100% from the 2013 budget.

Yampa Valley Regional Airpor t (YVRA) anticipates receiving two interfund loans from theRoad and Bridge Fund. The first interfund loan is for $1,500,000 to finance YVRA'scontribution to the Town of Hayden for the construction of a Water Tank Storage System.The interfund loan debt service associated with this loan is $125,000 per year over a 15 year term with a 3% interest rate. The second interfund loan is for $2,000,000 at 3% for one year.This loan is to cover timing differences between when costs are expended for the runwayrehabilitation, vehicle service road and related rehabilitation projects and when FAA grantfunds are disbursed to YVRA. The construction project costs are budgeted in 2014 and theassociated FAA funding is in 2014 and 2015.

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PERSONNEL

609,000$ Governmental Activities personnel expenses increased $609,000 to $17,828,000 or 4% abovethe 2013 budget. The primary changes in personnel costs are noted below in theGovernmental Activities section.

238,000$ Business Activities personnel expenses increased $238,000 to $3,447,000 or 7% above the2013 budget. The primary changes in personnel costs are noted below in the Business TypeActivities section.

888,000$ Compensation A 10% pay cut was implemented during 2009. The 10% pay cut was lowered toa 5% pay cut beginning in 2010 and the 5% pay cut was removed in the 2013 budget. In the 2014

budget, a 2% cost of living increase was approved for all employees. Also, a partial reinstatementof the Countys Step Compensation Plan was approved in 2014 where up to three pay steps will

be paid to eligible employees for the steps not awarded during the 2009-2013 time period inwhich the Step Compensation Plan was suspended. The cost of living and step compensation planincreased compensation by $888,000 or 7%. A market compensation survey will be completed in2014. The compensation increase was funded by a decrease in health insurance costs discussed

below, and increases in property taxes and sales tax.

209,000$ Full Time Equivalents (FTEs) Governmental activities increased 2.77 FTEs or 1% to 227FTEs. The primary change in FTEs is as follows. Accounting was approved a 1.00 FTE increasefor a combined Payroll/General Ledger position for $69,970 to allow flexibility in meetingdeadlines and improve the annual financial statement process. An Operations Manager inInformation Systems was approved for a 1.00 FTE increase at a cost of $87,340 to help thedepartment meet current needs and plan for future ones.

Human Services added 1.50 FTEs during 2013 which included a 1.00 FTE Eligibility Tech for

$67,465 and a .50 FTE temporary Health Coverage Guide costing $18,870. The Affordable CareAct (ACA) will increase the Medicaid population and the Eligibility Tech will process newapplications and assist with maintaining the ongoing case management for the increased caseload.Over half of the cost of this position will be funded by federal pass-through reimbursement. TheHealth Coverage Guide will assist citizens in navigating the health insurance marketplace andsecuring health insurance as required by the ACA. The position is funded by a federal grant

passed through Northwest Colorado Visiting Nurses Association.

The Commissioners Office did not replace a .7 FTE part-time minute taker resulting in a savingsof $51,680.

(300,000)$ Health Insurance Since the inception of the self-funded Health Insurance Pool in 2011, actualhealth insurance costs have run less than the health insurance premiums allowing the County to

build a projected reserve of $1.5 million. At this point in time, the reserve is deemed adequate tocover an unusually high claims year. Because of this reserve balance, the County was able todecrease health insurance premiums by $300,000 or 10% to $2,729,000 in 2014. The cost to theemployee will remain the same in 2014.

(41,000)$ Overtime - The Sheriffs budget decreased overtime by $8,710 in Administration andInvestigations related to high compensatory time balances at the end of 2012 which could have

been paid out as overtime during 2013. Communications reduced overtime paid to dispatchers by$32,360 to be more in line with historic amounts.


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OPERATIONS

1,477,000$

1,412,000$

Purchase of DevelopmentRights, DevelopmentalDisabilities and Museums

$ (349,000) Operations for voter approved mill levies decreased a total of $349,000 to$2,943,000 or 11% from the 2013 budget. The decrease is primarily dueto the 12% decline in assessed valuation. Routt Countys 2013 net assessedvaluation decreased $130 million to $983 million or 12%. Operations inPurchase of Development Rights decreased $184,000, DevelopmentalDisabilities decreased $127,000 and Museums decreased $38,000.

Detention Center $ 214,000 Contracted housing for an inmate with special needs that cannot be met atthe Routt County Detention facility is expected to cost $214,000 in 2014.The inmate is awaiting trial which might take up to one year and is typicalfor this kind of case.

Road and Bridge $ 300,000 The small bridge budget (bridges having a span of less than twenty feet)increased $300,000 or 545% to $354,000 as result of an evaluation thatwas completed in 2013. Four small bridges will be replaced in 2014 andthe engineering on five small bridges will start in 2014.

$ 184,000 The dust retardant budget increased $184,000 to $504,000 or 58% to

reflect historical trends and to include the cost of dust retardant applied to private roads and reimbursed by the land owner.

$ 160,000 The chip and seal budget increased $160,000 or 24% to $835,000.Approximately 24 miles of road will be chip and sealed in 2014 as part of the planned maintenance program for hard surfaced roads, as compared toapproximately 18 miles in the 2013 budget.

$ 80,000 The culvert budget increased $80,000 or 160% to $130,000 to restock theinventory and for replacement of culverts in 2014 and future years.

$ 75,000 The administrative budget for oil and gas studies increased $75,000 or 100% compared to the 2014 budget. The costs of the oil and gas studiesare reimbursed by the oil and gas companies.

Human Services 200,000$ Food assistance is expected to increase by $200,000 or 13% to $1,800,000due to the continuing increase in demand for the program related to therecession. In 2012, an average of 459 households were served per monthas compared to an average of 497 households per month for the first ninemonths of 2013, which represents a 8% increase.

Governmental Activities operating costs are budgeted to increase from the 2013budget by $1,477,000 or 10% to $16,051,000. The major changes in operating costsare noted below in the Governmental Activities section.

Business-Type Activities operating costs are anticipated to increase over the 2013budget by $1,412,000 or 55% to $3,974,000. The major changes in operating costs arenoted below in the Business-Type Activities section.


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87,000$ Child Care benefits will increase by $87,000 to $312,000 or 39% to potentially eliminate the current waitlist for clients at or below 130% of the federal poverty guidelines. The increased benefits will be funded bythe purchase of additional child care allocation from other counties in thestate that don't completely use their allocation.

Yampa Valley RegionalAirport (YVRA)

1,396,000$ Operating costs are $3,640,000 in 2014 which is an increase of $1,396,000or 62% over the 2013 budget of $2,244,000. The increase in 2014 is dueto YVRA contributing $1,340,000 to the Town of Hayden for the designand construction of a Water Tank Storage System that will be owned bythe Town of Hayden. The Water Tank Storage System is needed to

provide an adequate supply of water to hydrants and the second floor of the terminal. The contribution from YVRA is contingent upon the Townof Hayden obtaining additional funding for the project. YVRA will utilize

an interfund loan from the Road and Bridge Fund of $1,500,000 over 15years at 3% to finance the contribution.

BUSINESS TYPE ACTIVITIES

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CAPITAL/INFRASTRUCTURE

$ (459,000)

$ 1,993,000

$ 13,402,000

Major Capital/Infrastructure Items Outside Greater than or equal to $100,000 Department Cost Funding Net

Governmental Activities Capital and InfrastructureReplace Detention Center Roof Building & Plant 280,000$ -$ 280,000$

Replace Dispatch Radio Consoles Communications 500,000 - 500,000

Replace Plow Truck Heavy Equipment 206,000 - 206,000

Upgrade Regional Building

Department's Software Information Systems 350,000 - 350,000

Replace Green Pipe Bridge CR67 Road and Bridge 1,280,000 867,000 413,000 Replace Butler Creek Bridge CR67 Road and Bridge 661,000 523,000 138,000

(Governmental Activities - Continued next page)

Governmental Activities capital costs are anticipated to decrease $459,000 to $2,560,000or 15% below the 2013 budget. The change in capital expense is primarily due to a $914,000decrease in the Heavy Equipment Pool offset by a $443,500 increase in the CommunicationsPool. Capital budgeted in the Heavy Equipment Pool in 2014 totals $266,000 for one plowtruck replacement at $206,000 and two district shop remodels totaling $60,000. HeavyEquipment capital budgeted in 2013 was significantly higher and included two graders for$624,000, a plow/dump truck for $148,000, $298,000 for two sand trucks and otherequipment and $100,000 for energy efficiency upgrades at three district shops. The increase inthe Communications Pool is primarily from budgeting $500,000 in 2014 to replace thecommunications dispatch radio consoles. The existing dispatch radio consoles will not besupported by the current vendor after 2015. The $1.5 million Computer Aided Dispatch andRecords Management System funded by the American Reinvestment and Recovery Act has

been a multi-year project budgeted in the Information Systems Pool since 2010 and will becompleted after spending the final $266,000 budgeted in 2013. In 2014, the Regional BuildingDepartment's permitting and plan review software is scheduled for replacement at a cost of$350,000.

Infrastructure costs are anticipated to increase $1,993,000 to $5,969,000 or 50% over the2013 budget. The increase is primarily comprised of $2,239,000 in overlay applications,$609,000 in bridge replacements and $265,000 in slide repairs offset by a $1,120,000 decreasein double chip applications. In 2014, budgeted infrastructure projects include six overlayapplications totaling $3,244,000, two major bridge replacements costing $1,941,000 which are

partially funded by federal grants totaling $1,390,000, two slide repairs for $450,000 and paving a portion of a county road for $207,000 partially funded by a federal grant of $166,000.In 2013, double chip applications were budgeted for four roads. There are no double chipapplications budgeted in 2014.

Business-Type Activities capital costs are anticipated to increase $13,402,000 to$16,345,000 or 455% over the 2013 budget.

Capital costs for 2014 consist of $16,325,000 for the Yampa Valley Regional Airport (YVRA)and $20,000 for the Phippsburg Water and Sanitation System. Capital costs for 2013 consisted

of $2,893,000 for YVRA and $50,000 for the Milner Sanitation System.

The $13,402,000 increase is primarily attributed to YVRA's $15,087,000 runway rehabilitation,vehicle service road and related pavement rehabilitation construction projects budgeted for2014. The design work for these projects was budgeted in 2013 at $1,200,000 and will becompleted in 2013.

Listed below are the 2014 Major Capital and Infrastructure items greater than or equal to$100,000 for both Governmental and Business-Type Activities projects.

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CAPITAL/INFRASTRUCTURE

Major Capital/Infrastructure Items Outside Greater than or equal to $100,000 Department Cost Funding NetOverlay CR 7 Yampa City Limits to end of pavement Road and Bridge 762,000$ -$ 762,000$Overlay CR 14 Yellow Jacket Pass north to Colorado Hwy 131 Road and Bridge 750,000 - 750,000

Overlay CR 129 Willow Creek Pass to State Park Road and Bridge 688,000 - 688,000 Overlay Steamboat II Road and Bridge 674,000 - 674,000 Overlay CR 129 CR 54 to Moon Hill Road and Bridge 203,000 - 203,000 Overlay District #3 Shop Road

driveway and parking lot Road and Bridge 167,000 - 167,000 Pave a portion of CR 44 Road and Bridge 207,000 166,000 41,000 Slide Repair CR 33 Appel Dam Road and Bridge 250,000 - 250,000 Slide Repair CR 25 Oak Creek Road and Bridge 200,000 - 200,000

Total Governmental Activities 7,178,000 1,556,000 5,622,000

Major Capital Items Outside Greater than or equal to $100,000 Department Cost Funding Net

Business-Type ActivitiesRunway Rehabilitation / VehicleService Road and other rehabilitation YVRA 15,087,000 15,087,000 - Complete Update Master Plan YVRA 235,000 235,000 - Replace 2nd Fire truck YVRA 721,000 721,000 -

Total Business-Type Activities 16,043,000 16,043,000 -

Total Major Capital Items 23,221,000$ 17,599,000$ 5,622,000$

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DEBT SERVICE

$4,000 Governmental Activities debt service expense increased $4,000 to $1,240,000 or 0%above the 2013 budget.

On April 5, 2012, the County issued $13,290,000 of 2012 Series Refunding Certificatesof Participation (COPs) for the Justice Center Project with interest rates ranging from2.0% to 3.25%. The debt service for the COPs is $1,240,000 in 2014 compared to

$1,236,000 budgeted in 2013. The outstanding balance of the COPs at the end of 2014 is$11,485,000.

$(24,000) Business Type Activities debt service expense decreased $24,000 or 50% from the$48,000 budgeted in 2013.

Yampa Valley Regional Airport - The $24,000 decrease in debt service from 2014 to2013 results from paying off a 5 year, $104,209 capital lease in 2013 used to purchase afire truck at the Yampa Valley Regional Airport.

Phippsburg Water and Sanitation System - Debt service for 2014 of $24,000represents a full year of interest and principal payments on three loans issued to fund a

portion of the upgrades to the wastewater treatment lagoons, a portion of a waterfiltration facility and an upgrade to the facility. Loans were issued in 2003, 2006 and2009 for $131,000, $116,000 and $25,000, respectively with interest rates of 5% andterms ranging from 13 to 20 years. The outstanding balance of the Phippsburg Waterand Sanitation System debt at the end of 2014 is $187,000.

INTERFUND LOANS ISSUED/DEBT SERVICE

$3,500,000 Governmental Activities interfund loans issued increased $3,500,000 in 2014 from$0 budgeted in 2013.

Road and Bridge is anticipated to fund two interfund loans in 2014 to the Yampa Valley

Regional Airport (YVRA) for $1.5 million and $2 million. The $1.5 million interfundloan will finance YVRAs contribut ion to the Town of Hayden for the construction of aWater Tank Storage System. This loan has a 15 year term with 3% interest and annualdebt service payments of $125,000. The $2 million loan will cover the timing difference

between when costs are expende d for YVRAs $15.1 million runway rehabilitation,vehicle service road and related rehabilitation projects and when FAA (Federal AviationAdministration) grant funds will be disbursed to YVRA. This loan has a one year termwith a 3% interest rate and a 2014 debt service payment of $30,000. The $2 million loanis anticipated to be paid off in 2015.

$155,000 Business Type Activities interfund loans debt service increased $155,000 in 2014from $10,000 budgeted in 2013.

Yampa Valley Regional Airport s interfund loan debt service for the two interfundloans from the Road and Bridge Fund totals $155,000 compared to zero budgeted in2013. The debt service payments on the $1.5 million and $2.0 million interfund loansreferenced in the previous governmental activities interfund loans section are $125,000and $30,000, respectively. The outstanding balance of the YVRA interfund loans at theend of 2014 is $3,419,000.

Milner Sanitation System s $10,000 interfund loan debt service remained unchanged in2014 on the $120,000 interfund loan, issued in 2012 from the Road and Bridge Fund tofinance sewer line discharge modifications, which has a 20 year term and a 5% interestrate. The outstanding balance of the Milner Sanitation System interfund loan at the end

of 2014 is $109,000.14


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Reserves

Reserves are composed of the following. Restricted reserves are externally imposed by creditors,grantors, laws and regulations of other governments, constitutional provisions, etc. Committed reservesare constrained by limitations the Board of County Commissioners has imposed on various funds. Forexample, substantial reserves have been committed for the replacement of equipment and Road andBridge infrastructure. The following is a summary of the Countys reserves.

Significant Items Affecting Reserves

Governmental Activities

Reserves from 2014 governmental activities are anticipated to decrease $8.9 million as the result ofseveral planned Road and Bridge infrastructure projects, the interfund loan to Yampa Valley RegionalAirport for the runway rehabilitation and the contribution to the Town of Hayden for the water storagetank system and the planned replacement of other County equipment.

The 2014 increase in property tax and sales tax and the decrease in health insurance costs funded theincrease in the compensation plan. Items that could have a significant impact on future County resourcesinclude the following. A market survey for the compensation system will be conducted in 2014 todetermine the competiveness of the compensation system for implementation in 2015. The stepcompensation plan has three remaining steps to potentially be funded in the future to make the systemwhole. A new approach to funding the improvements to County Road (CR) 14 has been implemented toreconstruct CR 14 Phase IV. In 2014 and 2015, $750,000 has been budgeted each year for a total of $1.5

Re se rves Summary(in millions)

Gove rnmentalActivities

BusinessType

Activitie s Total

Restricted Reserves

TABOR reserve 0.9$ 0.3$ 1.2$Public Trustee 0.2 - 0.2 Lottery Funds 0.2 - 0.2 Purchase of Development Rights 0.5 - 0.5 Affordable housing down payment

assistance program 0.1 - 0.1 Inmate commissary funds 0.1 - 0.1 Other 0.1 - 0.1

Total restricted reserves 2.1 0.3 2.4

Committed Reserves

Road and Bridge operations &infrastructure replacement 7.5 - 7.5

Equipment replacement 10.2 - 10.2 General Fund 1.7 - 1.7 E911 Communications 0.7 - 0.7 Human Services 0.3 - 0.3 Self-Funded health insurance 1.5 - 1.5 Yampa Valley Regional Airport

operations and capital replacement - 1.0 1.0 Regional Building Department - 1.1 1.1 Water and sanitation - 0.1 0.1

Total committed reserves 21.9 2.2 24.1

Total reserves 24.0$ 2.5$ 26.5$

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million for improvements to CR 14 Phase IV with the hope that additional funds will become available tomake even more improvements in the future.

The long term forecast projects a balanced budget as presented in the following graph GovernmentalActivities Committed Reserves .

Significant revenue growth is not anticipated in major revenue sources such as property tax, sales tax andstate and federal sources. Property tax revenue is predicted to have limited growth over the next fewyears given limited opportunity for new construction. Sales tax revenue is also predicted to have limitedgrowth over the next several years given high unemployment, weak consumer confidence and thesignificant amount of uncertainty in the economy. State and Federal revenues are not predicted toincrease appreciably given the significant annual, negative Federal deficit and how the elimination of thisdeficit will impact the County.

The County mitigated the negative impacts of the great recession by implementing a reduction in force,a 10% to 5% reduction in the compensation program, postponing the step compensation program and thecompensation market survey program, has lowered operating costs and extended the useful lives ofcapital and infrastructure to partially balance expenses with current revenues in order to potentially

provide an acceptable level of service to the public.

Business Activities

Reserves for business type activities are anticipated to decrease over the next few years and are primarilyattributable to Yampa Valley Regional Airport (YVRA). The reserves in the Regional BuildingDepartment and the Water and Sanitation Systems are anticipated to remain constant over the next fewyears.

YVRA has experienced significant decreases in enplanements due to the recession which has negativelyimpacted landing, car rental and parking fees and has resulted in an annual operating loss of $326,000 in

$(5,000,000)

$-

$5,000,000

$10,000,000

$15,000,000

$20,000,000

$25,000,000

14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33

D o l l a r s

Year

Governmental Activities Committed Reserves

Combined

Road and Bridge

Equipment Pool

General

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2014. The plan to reduce the operating loss is to increase enplanements from new markets, increase feeswhere competitively possible and continue to look for ways to decrease expenses. In addition, YVRAreserves are being decreased $1 million due to the rehabilitation of the runway and the construction of thevehicle services road and the future receipt of federal revenues sources such as passenger facility charges.

Conclusion

The 2014 budget is a snapshot in time based on both known factors and certain assumptions. Thisfinancial plan will need to be revised by the County to respond to changing economic conditions. Thereis still significant uncertainty with the Countys revenue sources, increasing petroleum costs, highunemployment and increasing health insurance costs.

As new financial information becomes available, management will respond in an appropriate manner tomaintain the Countys overall financial well being.

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$0

$2,000,000

$4,000,000

$6,000,000

$8,000,000

$10,000,000

$12,000,000

$14,000,000

$16,000,000

$18,000,000

$20,000,000

PropertyTax

Federal Fees Sales Tax State Other InterfundLoans

WHERE THE MONEY COMES FROM

Government and Business Activities

2014 2013

Property Tax29%

Federal28%

Fees16%

Sales Tax9%

State11%

Other1%

Interfund Loans6%

ALLOCATION OF WHERE THE MONEY COMES FROM


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$0

$5,000,000

$10,000,000

$15,000,000

$20,000,000

$25,000,000

Personnel Operations Capital Infrastructure Debt Service InterfundLoans

WHERE THE MONEY GOES


2014 2013

Personnel30%

Operations28%

Capital27%

Infrastructure8%

Debt Service2%

InterfundLoans5%

ALLOCATION OF WHERE THE MONEY GOES


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$0

$2,000,000

$4,000,000

$6,000,000

$8,000,000

$10,000,000

$12,000,000

$14,000,000

$16,000,000

$18,000,000

$20,000,000

PropertyTax

Federal Fees Sales Tax State Other InterfundLoans

WHERE THE MONEY COMES FROM


2014 2013

Property Tax46%

Federal17.5%

Fees11%

Sales Tax14%

State10%

Other1%

InterfundLoans0.5%

ALLOCATION OF WHERE THE MONEY COMES FROM


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$0

$2,000,000

$4,000,000

$6,000,000

$8,000,000

$10,000,000

$12,000,000

$14,000,000

$16,000,000

$18,000,000

$20,000,000

Personnel Operations Capital Infrastructure Debt Service Interfund Loans

WHERE THE MONEY GOES


2014 2013

Personnel38%

Operations34%

Capital5%

Infrastructure13%

Debt Service3%

Interfund Loans7%

ALLOCATION OF WHERE THE MONEY GOES


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$0

$2,000,000

$4,000,000

$6,000,000

$8,000,000

$10,000,000

$12,000,000

Fees Federal State Other InterfundLoans

WHERE THE MONEY COMES FROMBusiness -Type Activities

2014 2013

Fees25%

Federal47%

State11%

Other1%

Interfund Loans16%

ALLOCATION OF WHERE THE MONEY COMES FROMBusiness-Type Activities

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$0

$2,000,000

$4,000,000

$6,000,000

$8,000,000

$10,000,000

$12,000,000

$14,000,000

$16,000,000

$18,000,000

Personnel Operations Capital Debt Service &Interfund Loans

WHERE THE MONEY GOESBusiness-Type Activities

2014 2013

Personnel14%

Operations17%

Capital68%

Debt Service &Interfund Loans

1%

ALLOCATION OF WHERE THE MONEY GOESBusiness-Type Activities

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2013/2014 2013/2014

2013 2013 2014 $ Budget % BudgetRevenue/Interfund Loans Budget Projected Budget Change ChangeProperty Tax 17,440,000$ 17,546,000$ 17,682,000$ 242,000$ 1%Fees 9,858,000 10,104,000 9,893,000 35,000 0%Sales Tax 4,921,000 5,308,000 5,232,000 311,000 6%State 4,728,000 4,686,000 6,465,000 1,737,000 37%Federal 7,599,000 6,266,000 17,324,000 9,725,000 128%Other 828,000 976,000 595,000 (233,000) -28%Interfund Loans 10,000 10,000 3,665,000 3,655,000 36550%

Total 45,384,000 44,896,000 60,856,000 15,472,000 34%

Expense/Interfund Loans

Personnel 20,428,000 19,958,000 21,275,000 847,000 4%

Operations 17,136,000 18,390,000 20,026,000 2,890,000 17%Capital 5,962,000 5,278,000 18,905,000 12,943,000 217%Infrastructure 3,976,000 2,239,000 5,969,000 1,993,000 50%Debt Service 1,284,000 1,280,000 1,264,000 (20,000) -2%Interfund Loans 10,000 10,000 3,665,000 3,655,000 36550%

Total 48,796,000 47,155,000 71,104,000 22,308,000 46%

Revenues/Interfund Loans Under Expense/Interfund Loans (3,412,000) (2,259,000) (10,248,000) (6,836,000) 200%

Reserves Beginning 37,943,000 37,943,000 36,206,000 (1,737,000) -5%

Depreciation/Other Non-CashItems 510,000 522,000 518,000 8,000 2%

Reserves Ending 35,041,000$ 36,206,000$ 26,476,000$ (8,565,000)$ -24%

Reserve Summary

Restricted Reserves 2,772,000$ 2,516,000$ 2,382,000$ (390,000)$ -14%

Committed ReservesGeneral Fund 1,699,000 1,686,000 1,713,000 14,000 1%Road and Bridge 14,397,000 15,575,000 7,504,000 (6,893,000) -48%Human Services 229,000 262,000 252,000 23,000 10%E 911 Communications 726,000 805,000 788,000 62,000 9%Equipment Replacement 10,531,000 10,703,000 10,171,000 (360,000) -3%Self-Funded Health Insurance 1,133,000 1,577,000 1,463,000 330,000 29%Yampa Valley Regional Airport 2,513,000 1,946,000 1,025,000 (1,488,000) -59%Regional Building Department 931,000 1,018,000 1,069,000 138,000 15%Water and Sanitation 110,000 118,000 109,000 (1,000) -1%

Total Reserves 35,041,000$ 36,206,000$ 26,476,000$ (8,565,000)$ -24%

Routt CountyGovernmental and Business Type Activities

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2013/2014 2013/20142013 2013 2014 $ Budget % Budget

Revenue/Interfund Loans Budget Projected Budget Change ChangeProperty Tax 17,440,000$ 17,546,000$ 17,682,000$ 242,000$ 1%Fees 4,072,000 4,720,000 4,179,000 107,000 3%Sales Tax 4,921,000 5,308,000 5,232,000 311,000 6%State 3,856,000 4,303,000 3,870,000 14,000 0%Federal 6,072,000 5,007,000 6,692,000 620,000 10%Transfers 11,000 3,000 6,000 (5,000) -45%Other 769,000 639,000 395,000 (374,000) -49%Interfund Loans 10,000 10,000 165,000 155,000 1550%

Total 37,151,000 37,536,000 38,221,000 1,070,000 3%


Personnel 17,219,000 16,762,000 17,828,000 609,000 4%Operations 14,574,000 15,660,000 16,051,000 1,477,000 10%Capital 3,019,000 2,857,000 2,560,000 (459,000) -15%Infrastructure 3,976,000 2,239,000 5,969,000 1,993,000 50%Debt Service 1,236,000 1,232,000 1,240,000 4,000 0%Interfund Loans - - 3,500,000 3,500,000 0%

Total 40,024,000 38,750,000 47,148,000 7,124,000 18%

Revenues/Interfund Loans Under Expense/Interfund Loans (2,873,000) (1,214,000) (8,927,000) (6,054,000) 211%

Reserves Beginning 34,163,000 34,163,000 32,949,000 (1,214,000) -4%

Reserves Ending 31,290,000$ 32,949,000$ 24,022,000$ (7,268,000)$ -23%

Reserve Summary

Restricted Reserves 2,575,000$ 2,341,000$ 2,131,000$ (444,000)$ -17%

Committed ReservesGeneral Fund 1,699,000 1,686,000 1,713,000 14,000 1%Road and Bridge 14,397,000 15,575,000 7,504,000 (6,893,000) -48%Human Services 229,000 262,000 252,000 23,000 10%E 911 Communications 726,000 805,000 788,000 62,000 9%Equipment Replacement 10,531,000 10,703,000 10,171,000 (360,000) -3%

Self-Funded Health Insurance 1,133,000 1,577,000 1,463,000 330,000 29%

Total Reserves 31,290,000$ 32,949,000$ 24,022,000$ (7,268,000)$ -23%

Routt County


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2013/2014 2013/20142013 2013 2014 $ Budget % Budget

Revenue/Interfund Loans Budget Projected Budget Change ChangeFees 5,786,000$ 5,384,000$ 5,714,000$ (72,000)$ -1%State 872,000 383,000 2,595,000 1,723,000 198%Federal 1,527,000 1,259,000 10,632,000 9,105,000 596%Other 59,000 337,000 199,000 140,000 237%Interfund Loans - - 3,500,000 3,500,000 0%

Total 8,244,000 7,363,000 22,640,000 14,396,000 175%


Personnel 3,209,000 3,195,000 3,447,000 238,000 7%Operations 2,562,000 2,732,000 3,974,000 1,412,000 55%Capital 2,943,000 2,420,000 16,345,000 13,402,000 455%Debt Service 48,000 48,000 24,000 (24,000) -50%

Transfers 11,000 3,000 6,000 (5,000) -45%Interfund Loans 10,000 10,000 165,000 155,000 1550%

Total 8,783,000 8,408,000 23,961,000 15,178,000 173%

Revenues/Interfund Loans Under Expense/Interfund Loans (539,000) (1,045,000) (1,321,000) (782,000) 145%

Reserves Beginning 3,780,000 3,780,000 3,257,000 (523,000) -14%

Depreciation/Other Non-Cash Items 510,000 522,000 518,000 8,000 2%

Reserves Ending 3,751,000$ 3,257,000$ 2,454,000$ (1,297,000)$ -35%

Reserve Summary

Restricted Reserves 197,000$ 175,000$ 251,000$ 54,000$ 27%

Committed ReservesYampa Valley Regional Airport 2,513,000 1,946,000 1,025,000 (1,488,000) -59%Regional Building Department 931,000 1,018,000 1,069,000 138,000 15%Water and Sanitation 110,000 118,000 109,000 (1,000) -1%

Total Reserves 3,751,000$ 3,257,000$ 2,454,000$ (1,297,000)$ -35%

Routt CountyBusiness Type Activities

Documents

Routt County 2014 Proposed Budget Document