General fund reserves increased $800K according to county audit

JOANN KALENAK, DCCR, Oct. 7, 2020 — Two months later than last year’s report, contract auditor Pete Blair presented Delta County Commissioners and the public his 2019 audit of county finances. Blair summed up his 93-page examination in just a few words, “As of the end of 2019, the combined ending fund balances of County governmental funds were $20.3 million. Approximately 83% of this consists of unreserved fund balance, which is available as working capital and for current spending in accordance with the purposes of the specific funds.” Or, in layman’s terms, those funds that can be spent at the discretion of the Delta County Commissioners.

Blair attributed the county’s 2019 financial success to two primary occurrences —expenditures in the General Fund — the county’s main operating account — were below anticipated budget by more than $1 million and sales tax revenue increased a whopping 37% — $6.8 million from a budgeted $5 million (as reported by County Treasurer Lisa Tafoya in an earlier DCCR article).

The details of Blair’s report focused on three categories of county funds — unrestricted, invested and restricted funds. He reported total assets ending on Dec. 31, 2019 of $168.2 million — a $1.7 million increase over 2018. Of this amount, he said, $18.8 million remained in unrestricted funds; $146 million comprised capital assets including land, construction in progress, buildings, machinery, equipment, and the County’s road and bridge systems. Restricted funds were $3.4 million at the end of 2019 — a TABOR reserve of $525,000, special road projects and gravel inventory reserves of $2,379,271, and Conservation Trust Fund recreation project reserves of $473,842.

County policy is to keep unrestricted fund balances in the General Fund at no less than 25% of operating expenditures. Ending year 2019, the unrestricted fund balance in this primary operating fund was $5.7 million, a $774,392 increase over 2018. This amount represents 42% of operating expenses — 17% over the reserve policy minimum.

Overall, unrestricted fund reserves ending in 2019 totaled $18.8 million, or 51% of the $36,707,863 in total allocations spread over seventeen individual funds and two “proprietary” funds — the County’s landfill business and its 9-1-1 emergency call business. “Eleven out of 19 funds increased their year-end balances,” reported Blair.

Blair also reported “the County is involved in various lawsuits. Management does not believe the potential loss to the County from any of these lawsuits would have a material impact on the financial statements.”

Next on the fiscal timeline is the development of the proposed 2021 budget, which by state statute should be submitted to County Commissioners prior to October 15 and legally adopted by Dec. 31, 2020.

SALES TAX HISTORY: The County levied a one percent sales tax in 1969. The County receives sixty percent of the sales tax, with the remaining forty percent going to City of Delta and the towns of Paonia, Cedaredge, Crawford, Hotchkiss, and Orchard City based on population data from the most current census.

 

In 1982, an additional sales tax of one (1) percent was levied. Seventy-five percent of the amount is deposited in the Capital Improvement Fund to be used for capital improvements or debt service to finance the construction of capital improvements. The remaining 25 percent may be used to operate County services and facilities or any other lawful County purposes.

In 2018, a countywide ballot initiative to increase sales tax from 2% to 3% on all consumables except farm equipment and pesticides failed to pass. The additional earning was earmarked for local law enforcement.

In 2020, a countywide ballot initiative to increase sales tax from 2% to 2.8% on all consumables except farm equipment will appear on the Nov. 3, 2020 ballot. The additional earning is earmarked for local law enforcement.

READ THE 2019 COUNTY AUDIT REPORT

 

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