Pueblo County 2013 Budget

To The Citizens of Pueblo County: 

I am pleased to present the budget of Pueblo County Government for fiscal year ending December
31, 2013. This budget is balanced using $1,296,000 of assigned reserves.

Expenditures in the budget total $197,181,679. The budget is funded with revenue estimates of an
equal amount, including $1,249,649 for designated funds grant‐related purpose carried‐over from
2012. Balancing transfers from other funds of $10,219,176 include $8,800,000 of FEMA and CSEPP
federal funds to construct a new Emergency Operations Center. Carryover of new judicial building
construction and other capital projects in the amount of $44,747,700 is also budgeted. Revenue
estimates include property taxes of $44,901,049. 

The proposed budget makes the best possible use of the limited funds available by focusing funded
efforts to improve Economic Value Added (EVA) for county taxpayers. Funding priority is given to
high return projects that improve services without using more resource or to activities that free‐up
resource.

The 2013 Proposed Budget is aligned with three operating principles the county must adhere to for
the next four years to avoid a fiscal cliff created by committed overspending with uncertain
revenues. The county will have to control operations, improve its debt profile and maintain a healthy
level of reserves. To do so, balanced budgets that build unassigned reserves in the General Fund to a
minimum of two‐months or 17% of normal annual spending become the base‐line norm through at
least 2016 to sustain the financial health of the county.

The county is too small for its burdens. To control operations, the Proposed Budget begins in 2013 to
align burdens with county size and limits commitments and spending to projected available
revenues.

Operating costs are held to near‐2008 spending levels to balance the 2013 Proposed Budget.
Increases in fixed cost of debt service (below) dictate flat‐lined personnel costs and lowering of
discretionary spending for traditional aid to other entities by 10% in 2013 and a forecast of
eliminating such support to balance the budget in 2014 and beyond.

The county owns and maintains 27 buildings. Deferred capital improvements surpass levels
requested. At $381K budgeted, only 30% of requested improvements are funded in 2013; and a
$300K reserve is setup for emergency improvements.

Replacing capital machinery and equipment, at $1.6 million for 2013, is funded at 74% of normal but
45% of dollars requested. A $308K reserve is setup for 2013, which offsets $1.4 million in requests,
to replace computer equipment only when failed. This policy aims to mitigate the replacing of
functional units due to age.

Except an $800K paving project, only grant‐provided projects, which can be expected to divert over
$4 million from operating capital through completion of construction, are funded in 2013.
On wages and benefits, the county must use technology and enforce a hiring freeze to mitigate, via
attrition, having 1064 FTE employees to serve a population of 160,545 (or 6.63 FTE per 1000 citizen
population). For Pueblo County, average annual personnel costs (burdened) per FTE is $55,545. For
Pueblo, 5.0 FTE/1000 citizens (4.8 is the top‐ten county average) would yield 802 FTE (or 25% fewer
than current).

The 2013 Proposed Budget improves the county’s debt profile by meeting current commitments and
plan of no new debt. Debt service on current debt increases $1.8 million (or 30%) in 2013 over 2012,
and increases another $2.8 million (or 33% more) in 2014 over 2013, with near flat‐lined revenues
projected for 2014.

The county must maintain minimum reserves to operate and build reserves for long‐term obligations.
Budget office estimates $12.9 million in unassigned fund balance in the General Fund to start 2013.
This amount is what is needed to only fund two months (or 17%) of normal base‐level spending at
$74.7 million proposed for 2013. This will have to increase at least $1 million by 2016 to just meet
U.S. Government Finance Officers Association (GFOA) minimum standard for unassigned reserves.
The county has a net pension obligation (NPO) to current and future retirees of $7.2 million at end of
2011. This results in $54 million of actuarial accrued liability (AAL) being 67% funded at 2011 which
should be 100% funded. Government Accounting Standard Board (GASB) Statement 68 on Pensions
will result in the county recording the AAL on its government‐wide financial statements, which will
drive unrestricted reserves negative, in fiscal year 2015. To help fully‐fund the NPO by 2015, the
county needs to build $2.4 million in reserves each year 2013‐2015 and transfer same annually to
increase plan assets; or align plan provisions with county size.

The county has a net Other Post‐Employment Benefits (OPEB) obligation of $1.5 million at end of
2011, for medical benefits to current and future retirees (that can retire as early as 50 years of age)
until they qualify for Medicare at 66 years of age. The result is $5 million of OPEB AAL is 100%
unfunded.

Adhering to the above three operating principles requires a plan for balanced no‐deficit budgets
through 2016 as attached. Each subsequent year the budget office will true‐up a three year plan
beyond the current plan year.

The following pages provide detail of all the line items by fund and department/elected office in the
budget to enhance the reader’s understanding of the proposed 2013 Pueblo County Budget.

Sincerely,
Calvin A Hamler, BS/MS/MBA/CPA
Director of Budget and Finance

 

Download the attached PDF to read the entire report.