County discusses budget for upcoming fiscal year
San Juan County will have to deal with an estimated 13 percent decrease in revenue from gross receipts taxes as it prepares its budget for the upcoming fiscal year
- While drafting the budget, the county will look at the fire department and its animal control contract.
- Commissioners will look at shrinking hold harmless payments and proposed BLM rules.
- The county will likely approve a preliminary budget at its meeting next week.
AZTEC — San Juan County commissioners will have to consider several vulnerabilities while drafting a budget for fiscal year 2017, County Executive Officer Kim Carpenter said during a work session Tuesday afternoon.
Carpenter highlighted four main vulnerabilities: shrinking hold harmless payments from the state, proposed Bureau of Land Management onshore oil and gas orders that industry executives say could lead to wells being capped, the future of the San Juan County Fire Department and the county's animal control contract with the Farmington Regional Animal Shelter.
The county will likely approve a preliminary budget at its meeting next week.
In addition to those four uncertainties, the county will also face a decrease in revenue from gross receipts taxes. Jim Cox, the county's finance director, told commissioners the finance department drafted the preliminary budget based on an estimated 13 percent decrease in revenue from gross receipts taxes.
The preliminary budget calls for $94 million in revenue, compared to $104 million for fiscal year 2016.
Carpenter told commissioners the budget does not take into account a potential annexation of county land by the town of Kirtland. He said the annexation was not calculated into the budget because not enough information was available about how much revenue that area generates in gross receipts tax.
"It was kind of a shot in the dark when you guys annexed," Carpenter said to commission chairman Scott Eckstein.
Eckstein also serves as mayor of Bloomfield. The city of Bloomfield annexed 6,775 acres in 2014 with the hopes that it would bring in $1 million in gross receipts tax revenue. But the actual revenue the annexation has generated has been short of that amount, officials have said.
In addition to possibly losing money because of Kirtland's annexation, the county will also deal with losing a gross receipts tax that has helped fund the Health Care Assistance Program. The 1-16th of 1 percent gross receipts tax is scheduled to sunset at the end of the year.
"We have a reserve that's going to buy us some time," Carpenter said.
However, the county does not have a revenue source to expand that reserve, and Carpenter estimated it will have to spend more than $2 million to subsidize the program in fiscal year 2020.
The county will also have to look at hiring full-time firefighters in the future. The San Juan County Fire Department is currently staffed primarily by volunteer firefighters but is having a difficult time retaining them. Last month, the county approved combining two fire stations because of a lack of volunteers.
The county could potentially save money by contracting with the city of Aztec's animal shelter, rather than the Farmington Regional Animal Shelter. Farmington has offered a reduced rate if the county agreed to enter a contract. That rate would increase each year until 2020, when the county would pay the full amount.
"I disagree with locking in a future commission on this," Eckstein said.
Hannah Grover covers Aztec and Bloomfield, as well as general news, for The Daily Times. She can be reached at 505-564-4652.