Grand County’s fiscal year follows the calendar year, which means the Grand County Council has to approve 2020’s budget in short order—by Dec. 31 at the latest.
“If you don’t pass the budget by the end of the year, basically the government shuts down,” Grand County Clerk / Auditor Chris Baird told the Moab Sun News.
As part of his Auditor duties, Baird is the county’s Chief Budget Officer, responsible for preparing and administering Grand County’s annual budget, which now totals upwards of $25 million.
The county council is considering a property tax increase to deal with a projected budget shortfall of close to $2 million in 2020, according to Baird.
He told the Moab Sun News “the grim reality” is that, without the additional revenue generated by a tax increase, county departments will have to either reduce salaries or reduce existing positions.
If the tentative budget—passed by the council on Nov. 5 — is approved, Grand County could increase its property tax budgeted revenue by up to 54.03% above last year’s property tax budgeted revenue, according to Baird, excluding eligible new growth, which Baird estimated would pull in an additional $75,000 in the coming year, and a 2% contingency budget (money set aside to cover unexpected costs), noting that all these numbers are educated guesses.
Baird said property owners were mailed a copy of the notice simultaneously with yearly tax notices in October.
The notice states that county tax on a $242,000 residence would increase from $311.85 to $480.33, which is $168.48 per year, and the county tax on a $242,000 business would increase from $567.01 to $873.35, which is $306.34 per year.
Grand County residents can weigh in on the budget and the associated proposed property tax increase during a public hearing on Tuesday, Dec. 3, at 6 p.m. in the council chambers at 125 E. Center St. The council plans to vote on the 2020 budget during its regular meeting on Dec. 17.
Property Tax Based On Budget
Property tax is calculated by taking the requested budget and dividing it by the total taxable value of all real estate in the county. Higher assessed property values do not automatically translate into more revenue for the county.
“When the assessed values go up, that doesn’t increase the budget,” Baird said. “If assessed values go up, and you don’t go through (the process of public disclosure called) Truth in Taxation, and your budget stays the same, then it drives the (property tax) rate down.”
Property tax funds the county’s general operation as well as the Grand County School District, the Grand County Public Library, the Moab Mosquito Abatement District, the Cemetery District, the Moab Valley Fire Protection District, Castle Valley town and the Castle Valley Fire Department.
While the county had enough in savings to cover this year’s expenses, Baird told the Moab Sun News that the county could only draw down its fund balances for about two years before “we would be broke” without a tax increase or major cuts.
In a budget workshop with the county council on Nov. 5, Baird said that the tax increase that was originally approved for public noticing for the General Operations Fund was $2,111,000, but he had since gotten it down to $1,893,744.
“I made some progress on reducing the tax increase based on what we’ve got coming into the budget right now,” he said.
He said he decided to start charging departments for their respective expenses for services such as payroll, accounting, and Human Resources.
“That helped out a bit,” to replenish the General Operations fund, he said.
Speaking with the Moab Sun News on Nov. 19, he said he had gotten that number down even further, but noted it was still subject to change. He also emphasized that the official notice mailed by the county establishes the upper limit to which the county council could potentially increase the property tax budget.
Staffing and the Budget Shortfall
On Nov. 18, Baird forwarded an email sent to county council members to the Moab Sun News containing “department budget cut narratives.”
“The predominant reason for the operating deficit is the 2019 County-wide salary adjustment, 2% COLA (Cost of Living Adjustment), and benefits cost increase,” Baird said in the email, noting that new staff positions and funding for capital projects also contributed significantly to the deficit.
“All department heads and elected officials operating within the General and Library fund were asked to provide a narrative describing how they would balance their respective funds without a tax increase or a draw from a fund balance,” Baird said.
Grand County Public Library Director Carrie Valdes said in the library’s narrative that, without a tax rate adjustment or additional county funding, all 10 part-time employee positions would be cut. This would shut down the Castle Valley Library, and the Moab library would have to eliminate Saturday hours and reduce weekday hours. And, the narrative said, further cuts would still be needed.
“Quite frankly, the first step (elimination of part-time staff and the consequences of that elimination) will prove such a disastrous decision that numerous full-time staff will quit,” the narrative stated. “With the current job market in Grand County, it will likely be impossible to hire back a reliable workforce especially if benefits/salaries are also cut. A decrease from current library service levels will also prove immensely unpopular with county residents.”
She added, “I think the majority of the community recognizes it is time for another adjustment.”
In his own narrative, Baird said that in order for his office to cut its $69,000 portion of the deficit, he would need to cut training funds, which would leave new employees untrained and prevent current “inefficiencies and internal control problems” from being resolved.
He said he would also have to cut salaries by 20%, which he said would cause him to lose at least three of his five employees and would lower morale.
“Losing three-fifths of the clerk’s office staff would essentially cripple the Clerk / Auditor’s office, which in turn would cripple the entire county as payroll and accounts payable would be difficult or impossible to keep up with,” Baird said. “The reduced salaries would also make it very difficult to replace those positions with anyone who had any experience or qualifications. And, with no training budget, it would be very difficult to get any newly hired employees up-to-speed with the technical demands of the Clerk’s office duties.”
All the other forwarded narratives similarly described hardships departments would experience, including the one written by Grand County Assessor Debbie Swasey.
“The only way that I could cut my budget by the requested amount would be to lose an employee, which would be devastating for our office, and I cannot afford to do so,” she said, adding, “I try hard to keep my budget balanced and am very cautious not to spend money that is not necessary.”
Her narrative concludes by saying, “Grand County has not had a tax increase in over 12 years, so if that is what is needed to balance the county budget and not leave offices struggling to meet the needs of the public because we are understaffed, then so be it.”
During the county council meeting on Nov. 19, council member Jaylyn Hawks expressed appreciation for the department heads’ narratives and emphasized that there was not a mandate for department heads to cut their budgets.
“It’s really an exercise in helping the county understand what it would look like.”
She also said there were still “moving parts,” such as potential Transient Room Tax (TRT) reform by the Utah State Legislature, which could possibly free up funds in the county budget.
Hawks said that when reading the narratives, “It quickly became apparent that, in most cases, the only way for departments to make the requested adjustments was to cut staff or forego badly needed new staff requests. That’s mostly because a lot of their department operational budgets were less than the cut that was being asked of their individual department.”
Hawks said that if the county reduced positions and cut salaries, “There’d be an overall decrease in county services. The county would have greater liability for failing to meet safety and statutory requirements, and some contract requirements in the case of the sheriff’s office.”
She also said staff would be dissatisfied and at greater risk of burnout.
Hawks noted that the county had previously experienced difficulty in attracting and retaining employees due to the below-market-rate compensation, which led to positions going unfilled. The increase in salaries and positions which led to the current deficit came into being following the recommendation of a 2018 market analysis.