The Fremont County Commissioners are getting mixed signals in 2010 sales and use tax collections as the board continues preparations for the 2011 county budget. County Manager George Sugars reported to the Commissioners last week that the total sales and use tax collections for the first three quarters of 2010 amounted to $3.33 million. That was $72,000 or 2.2 percent above the same period from 2009. Sugars notes however that it is only 1.8 percent above the revenues budgeted for 2010.
The mixed signals in the report show that while use taxes on construction and auto sales increased, revenues collected in consumer sales tax continue to decline. Sugars said that $477,000 was collected in the first three quarters in auto use tax which was up by $8,300 or 1.8 percent from the same period in 2009. The biggest jump came in spring and summer construction use tax collections which totaled $252,000 for the first nine months. That was $116,000 or 86 percent higher than one year ago.
Sugars cautions not to read too much into the construction use tax collections since those numbers are distorted by a pair of large construction projects which included collections on the construction of Colorado State Penitentiary-2 and the new Van Diest Supply warehouse north of Florence. Those collections will not reoccur in 2011. Those one time construction dollars distort the bottom line because retail sales tax collections so far in 2010 have been worse than predicted.
Sugars says county retail sales tax collections through the third quarter of 2010 totaled $2.61 million or two percent under 2009 levels. Sugars said what’s disappointing is that the county budgeted for 2010 sales taxes to drop by only one percent. Sugars says retail sales tax collections for the 2011 budget have been projected at the same level of 2010.
The biggest problem facing Fremont County’s General Fund budget for 2011 is maintaining adequate reserves. The Commissioners have consistently tried to reach a minimum of $1 million in General Fund reserves but that target continues to fall short as revenues have declined. Finance Director Dana Angel estimates that the county will close out 2010 with $609,000 in General Fund reserves. When budget planning began in August it was estimated the county would close out 2011 with just over $200,000 in reserves. That was not acceptable, so the Board of Commissioners went to work examining numerous line items in the budget. As work was completed on a preliminary budget last week the General Fund reserves are now estimated to be $547,000 at the end of 2011. After various line item budget cuts and transfers by the Commissioners, 2011 General Fund spending is budgeted at $10.51 million. With revenues estimated at $10.45 million that means the extra $62,000 in spending will have to come out of reserves.
Commission Chairman Ed Norden said the biggest fear when operating on such low reserves is having another catastrophic event like a wildfire that could wipe out all of the county’s reserves. Norden said interestingly enough Fremont County’s Department of Transportation (Road & Bridge) reserves are in better shape than the General Fund. It’s estimated the Department of Transportation will close out 2010 with reserves of $849,000. Norden says that is due to more revenues from the Highway Users Tax Fund, successful grant applications secured by D.O.T. management, and the reorganization of the Department of Transportation this past year.
Sugars said county staff and the Board of Commissioners will discuss more specifics about preparations on the 2011 county budget at two budget hearings next month. Public hearings on the proposed budget are set for the regular November 9th and November 23rd meetings of the Board of Commissioners.