| 9/22/2006 8:46:00 AM | Email this article • Print this article | Audit finds county finances are in good shape
by Paul Goetz
Mail News Editor
County finances are in good shape, auditor Scott C. Wright told Chaffee County Commissioners this week.
In his report on the 2005 audit, Wright, an Avon CPA, noted the county's overall financial status is strong.
He said net assets exceed liabilities by $19,798,182 and total net assets increased by $875,049 in 2005.
Wright also noted a $50,163 increase in ending fund balances.
The total bonded debt decreased by $205,883 due to scheduled payments.
"I would say that the county has a lower amount of debt than what I would typically see in an entity with the same amount of capital assets and revenues," Wright said.
The audit was late this year after a prior auditor died and the county filed for a 60-day extension.
According to commissioner Jerry Mallett, it has taken the county five years to get its financial resources into the shape they are in today.
In presenting a press release to The Mail Wednesday he said, "Five years ago expenses hit, the economy took a dive, we took cuts and unfunded mandates (from state and federal governments), and we've been working our way out since then.
The release points to the auditor's report as encouraging news.
"In 2001 and 2002 there was a 'perfect storm' of events which led to extreme economic difficulties," the release stated.
Sept. 11, 2001 terrorist attacks led to financial turmoil in national and state economies and the drought and fires in 2002 further crippled the local and state economy.
Also during this time interest rates were at an all time low so income generated from reserve accounts was cut in half. Since the county uses interest income to help meet operating expenses, the drop in rates had a serious impact on county revenues, commissioners said.
Mallett said rising operating expenses in various county departments also impacted finances. Energy prices have cut into the budget for chip and seal projects, significantly reducing the extent of work on county roads.
Commissioners and county staff developed a strategy to reduce recurring costs and expend "one-time dollars" on projects that would boost and enhance the county's economy.
"Each department in the county has had to absorb one vacancy each," Mallet said, while implementing a hiring freeze and making no layoffs of county employees.
"If we keep on this course, as long as we don't run into anything unexpected, we should be fine," Mallett said.
While working to reduce ongoing expenses, Mallet said commissioners used other county resources such as the Conservation Trust Fund to boost projects including the Salida Steam Plant, among several others, during the tough economic times.
Aggressive county
strategy finds grants
Because of the difficult economic conditions, commissioners worked to tap new funding sources, primarily grants, which accounted for 38 percent of county operating revenue in 2005.
"We try to fund new projects through grants," Mallett said, an effort which extends into the current year.
In 2006, he said the county received a $186,000 grant to begin operation of the Chaffee County People's Clinic. The grant is for two-and-a-half years and is renewable.
Mallett cited other examples such as Energy Impact grants for $150,000 to the Steam Plant and $500,000 to Head Start, which received another $500,000 from other sources.
"That takes a lot of burden off taxpayers. If we relied on property tax we would be in very poor shape," Mallett said.
Mallett said the county is aggressively looking for grants and, "the word on the street is we are getting more than our share."
Building a river economy
Mallett showed The Mail a list of 18 new businesses that have come into the county since January, including wine stores, recycling companies, lodging and restaurant firms - each adding their part to the strengthening economy.
"Efforts are showing results," commissioner Jim Osborn said in the press release, citing a recent Colorado Department of Labor report. "County wages have increased 12 percent since 2001 and there has been a 13 percent increase in new businesses in the county."
While he said he did not have information on the number of stores and shops which have closed in the past five years, Mallett emphasized the importance of maintaining existing businesses as well as attracting new business.
He cited, in particular, the economic benefit of developing river parks in Buena Vista and Salida.
Mallett said in the release economic studies show river parks similar to those in the county have an economic boost of about $1.4 million per park.
"County legal spending on the RICD (Recreational In Channel Diversion) was $276,000 total," Mallett said.
He compared Chaffee County to other counties in the state - saying legal spending for the RICD in Chaffee was considerably less.
"This is a sound investment for a $2.8 million annual return," Mallett said. "Clearly investing in infrastructure to support commercial and recreational activity on the Arkansas River is very good for the economy."
Osborn, who represents the north end of the county, feels increased lodging tax revenue is a positive sign of growth.
"Our economy is improving. Chaffee County Visitor's Bureau is showing more tourists are staying here," he said, pointing to lodging tax revenues early in 2006 which showed a 22-percent increase over the previous year.
Parts of budget
Commissioner Tim Glenn encouraged the community to take notice of the budget.
"Budgets are not exciting topics to most citizens," Glenn said in the release. "I would encourage everyone to pay attention; it's your money, it's your community."
"The budget consists of several parts: general fund, general fund reserves, special revenue funds and reserves.
Glenn said the general fund is like a personal checking account and the general fund reserve is like a rainy day savings account.
The county uses the general fund for everyday expenses like paying salaries, utilities and supplies while reserves are tapped to meet expenses in economic hard times.
The reserve funds, Glenn said, are an indication of the county's overall financial health. General and special revenue reserve funds, he noted, are in excellent condition, as the audit indicates.
Glenn said these reserve funds climbed from $8,838,985 in 2000 to a projected $10,971,491 at the end of 2006, a 24 percent increase.
Mallett added, "special revenue funds are like a trust fund earmarked to pay your child's college expenses."
One such example is the Conservation Trust Fund generated by Colorado Lottery revenues.
"This fund cannot be used for general expenses and must be used for the specific purpose stipulated by the funding entity," Mallet said.
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