While companies and organizations across the country continue to lay off employees and cut budgets, Archuleta County continues to grow, adding employees and working from a budget geared for a revenue increase of 6.36 percent over 2008.
The good news is that, despite ongoing downturns in the national and local economies, the organization is able to continue providing solid employment opportunities with competitive wages and benefits packages. The bad news is, some in the organization and certain members of the Citizens Financial Advisory Task Force fear the organization has become top heavy with management salaries, and they wonder if the county can maintain the financial burden of carrying those salaries into what many predict are lean years ahead.
The county’s public works department — particularly road and bridge — provides a case in point.
The Archuleta County Public Works Department includes solid waste, road and bridge, weed and pest, and fleet. According to a public works department management salary survey, the department carries an annual burden of $453,511 in department head and management salaries, coupled with another $127,000 worth of benefits packages. Benefits packages across county departments average about 28 percent of the employee’s gross pay.
While those figures account for department head salaries across the whole of public works, a closer look at just road and bridge shows it carries nearly $216,000 annually in management salaries (one superintendent and three foremen) again with a 28-percent benefits package worth about $64,000.
Those four managers supervise 12 equipment operators whose salaries range between $31,262 and $41,288 depending on their skills, years with the agency and experience.
When asked why the county was carrying such a salary load, including the recent, $80,000 addition of Ken Feyen, the county’s new public works director, Archuleta County Commissioner and board chair Bob Moomaw said, “We’re getting ready for our four-year road plan. We have a very aggressive plan for this year. Getting Park Avenue and Cloud Cap all done this summer is pretty ambitious. That was really the reason we got somebody with a P.E. (physical engineering) background and a lot of construction management expertise.”
And Archuleta County Commissioner Clifford Lucero added, “Part of Ken’s task is to keep the four-year road plan on track. People are telling me we don’t need a public works director, but I think we do if we’re going to get this road plan to work. We have to build credibility, people need to be able to trust us.”
To that end, the commissioners have indicated the $2 million Park Avenue paving project will serve as their showcase, “trust-building” project that demonstrates what the county can do given experienced, qualified management and adequate funding. Then, as the strategy goes and with Park Avenue complete, the county will have the chutzpah to approach voters for approval of a bond issue, the funding of which would lubricate the financing of a series of road projects for years to come.
The county will unveil its four-year road plan April 29.
However, although an argument can be made that staffing is necessary to keep the road plan on track, questions remain whether Archuleta County remains on par with other Colorado counties in regards to salaries, number of managers and the sheer numbers of employees. Furthermore, questions persist as to why new hires — particularly managers — can tap into arguably unprecedented high salaries, while the average county employee, many of them survivors of the 2007 financial crisis, haven’t seen a cost of living allowance or raise in more than a year.
Moomaw, also a veteran of the 2007 financial crisis, said staff, his colleagues on the board and task force members are cognizant of the dangers of staffing overloads.
“The task force is in the process of assessing staffing levels in seven counties to determine if Archuleta County is where it needs to be. We’re really sensitive to trying to find that balance between what it takes to get the job done efficiently and effectively and overstaffing the county. It’s very easy for governmental bodies to become overstaffed. That’s what got us in trouble last time,” Moomaw said.
Archuleta County Commissioner John Ranson agreed.
“We need to make sure we don’t get back to those ’07 levels. Am I concerned? The short answer is, ‘Yes,’” Ranson said.
The 2009 budget indicates the county carried 176 employees in 2006. Then, by year’s end 2007 and after a series of draconian staff and program cuts, employment rolls showed 156. By 2008, the county had climbed back to 163, then to 164 employees by the start of 2009. According to Archuleta County Human Resources Generalis Mitzi Bowman, recent payroll records indicate 155 full-time employees, plus five unfilled full-time positions and nine positions at half time or less, and two seasonal staff.
When asked about management salaries in road and bridge and overall county employment levels, Lucero said, “Let the task force do the work. Are we top heavy on wages? Maybe, maybe not, I’m not an expert, but let’s see what they come up with.”
Ranson anticipated the task force should complete its survey by the end of May, and the data should help sculpt discussions during the mid-year budget adjustment.
But what if the task force discovers the county is top heavy on management or other positions, or is allocating too many dollars to managerial salaries?
Ranson said the first line of defense has been to postpone certain capital expenses until the middle of the year in order to better assess the county’s financial picture at a time when the bulk of property taxes should have been paid. In addition, Ranson said he and his colleagues will continue to monitor revenue and expenses, and are prepared to make any number of difficult financial decisions should the need arise.
“The only thing we feel like we can do is to watch it (the budget) as close as we can. With the help of Don Warn, we don’t expect any major surprises and we can take the appropriate steps as necessary,” Ranson said.
Among the items on Ranson’s “watch list”: declining HUTF (Highway Users Tax Fund) revenues — down 14 percent from last year according to Ranson and finance director Warn; sales tax figures — likely down 10-15 percent in February ’09 as compared to February ’08, based on an assessment of a recent report; potential declines in tax lien sales, and other economic indicators visible around the nation and locally.
“The budget and everything we’ve seen looks good,” said Ranson. “But Circle T (see story on A1) closing caught my attention. It (the economic downturn) shows up in real estate sales, sales tax, in jobs, in kids leaving schools. That really tells me the whole community better pay attention because I don’t think it’s the last.”
Ranson estimated Circle T’s closing would result in an $8 million loss in sales, and along with it, valuable sales tax revenue.
While it’s been said the Town of Pagosa Springs lives and dies by sales tax revenue, the county’s lifeblood is property tax revenue — a number Ranson said he will be watching closely.
“We should know by June what our property tax collections are. If they come in at 95 percent, we’ll be doing okay. If they come in at 90 percent, that’s bad,” Ranson said.
According to a February revenue and expenditure report, general fund property tax revenues are at 28.8 percent of budget — 12.13 points above the year-to-date collection benchmark.
Meanwhile building permit revenues remain abysmal — at 2.2 percent of year-to-date projections.
Although all three commissioners acknowledged the financial challenges ahead, Ranson was keen to point out key differences between April 2007 and today.
“The biggest difference that I can see now versus ’06 and ’07 is that we have checks and balances in place and a very competent finance director. If you will recall, the Task Force harped and harped on that being the most critical element to beginning the recovery. Don has done a masterful job of projecting (for budget purposes) and tracking. The county is no longer growing payroll and paying for that growth with other funds — this is the biggest difference. We have successfully set aside 1A and RCI funds and will only use the amount budgeted to pay for our plans.”