Summit County fire districts, schools among local entities fearing budget cuts due to pandemic shutdown
FRISCO — The shutdown caused by the pandemic will have far-reaching collateral downstream impacts on the economies on rural and resort towns across America. That includes Summit County, where the shutdown could present a future drought on funds for some of the most critical services the community receives, including fire and emergency services, schools, sanitation and water conservation.
In April, alongside the usual town and county taxes, property owners in Summit County also pay taxes that go toward funding things like the Lake Dillon Fire Protection District, Summit School District, Colorado Mountain College, town sanitation districts, the Colorado River District and other mill levies that may have been passed to fund other projects.
County Treasurer Ryne Scholl said that based on authority granted to him by the state, he was able to allow property tax owners facing financial difficulties to pay half their property tax bill now and the other half on June 15.
However, if property tax collection in the county and towns needs to be further delayed, staggered, cut or paused in the future to help with recovery, Scholl said there was a possibility of dire financial problems for the taxing districts down the line.
“If the governor says to pause collection or delay due dates in the future, and there is a massive decrease to cash flow between now and October, it could have a significant impact on services in Summit County,” Scholl said. “We continue to advocate for the opportunity to be more flexible to work with taxpayers on payments while keeping funds coming in.”
While the county and towns may have enough in reserve to get through the next few months, Scholl worried about the impact the shutdown would have on local taxing districts long-term, especially if the virus continues to be a problem in the fall and winter, threatening the health of the upcoming ski season.
With another shutdown comes the possibility of plummeting property values, which after assessment would see property tax revenues significantly decline in the years ahead. Because of Colorado laws like the Taxpayer Bill of Rights and the Gallagher Amendment, long drops in assessment would take years to recover from, as there are statutory limits to how much taxes can be raised year over year.
Summit’s bravest to feel the pinch
One of the districts that see a lion’s share of their funding from property taxes is the Lake Dillon Fire Protection District, which Scholl said relies on commercial and residential property tax revenue for over 90% of its budget.
Summit Fire & EMS communications director Steve Lipsher said that the fire district has some healthy reserves to get through the year without significantly cutting service, something he attributes to good governance.
“As any government entity, we have built up reserves over the years specifically for this kind of situation,” Lipsher said. “This is the type of good governance that was required of government agencies to weather storms like this.”
However, Lipsher confirmed that revenue drops in the months and years to come will come with cashflow concerns. Lipsher said that the fire district is preparing for a potential long-term revenue shortfall, and is already looking at ways to save money.
“We are very cognizant of the cash flow concern, and so we are cutting costs where we can without impacting our service levels,” Lipsher said.
Lipsher said the district is looking at cutting things like uniform allowances and delays on routine equipment replacement to save money. He assured the public that doesn’t mean that firefighters will have to go without uniforms or required gear; just that any expenses for those things will be subjected to “greater scrutiny” than before.
“We will be asking, ‘Well, do you really need a new pair of boots this month, or can we wait a few months before having to replace them?’” Lipsher explained. “It’s nothing that’s going to shock anybody, it’s just being realistic about the budget, and there are certainly things we can delay or extend.”
The district is also looking at putting off capital expenditures, such as the building of new fire stations and buying new vehicles. That includes putting off replacing fire engines and utilizing them past their recommended replacement time frame of 10 years, as the trucks are among the most expensive line items for the district to purchase. Lipsher said the fiscal conservatism is justified, given what the district faced financially during the recession after 2008.
“It’s a huge concern if we see an extended downturn with property values dropping, like how they significantly dropped in the 2007-2008 fiscal year,” Lipsher said. “Those would be significant long-term hits that you can’t just recover from in 6 months, a year or even a couple of years.”
Lipsher said that the potentially most painful fiscal decisions would be for the ones that affect jobs. He admitted that the district may have to look at reduced staffing in the future to make its ends meet.
That could mean even having to ask the state’s division of labor to reduce staffing requirements for fire engines from a minimum of four in an engine crew to three to be able to get fire engines out the door on service calls. Lipsher said that the lower staffing would still be safe, just not ideal and a reflection of the strange times we live in.
School district budget in limbo
The Summit School District is also looking at the potential for a long-term impact to its budget, on top of all of the difficulties it and all other Colorado schools are facing with the pandemic.
Given how the district relies on the state for budgeting as well as local property taxes, and how uncertain things are right now, it is hard for the district to determine what and where any cost cutting measures will have to take place.
“At this point, there is much uncertainty in the financial world and it is hard to say how the state budget will be affected,” school district Communications Director Mikki Grebetz said. “We are eagerly awaiting future forecasts and budget adoptions by the state in May.”
A timeline provided by the district has a critical meeting on May 12, when the state’s Joint Budget Committee meets to discuss what will need to be done to balance the state’s budget, as is required by Colorado’s constitution. On May 25, those budget decisions will be put into effect.
“After receiving the forecast, we will have a better understanding of what our budget will be for next school year and following years,” Grebetz said. “At SSD, we are currently working through different scenarios based upon the projected state budget, and we will be prepared for the final adopted budget in June. These are uncertain times, but Summit School District is committed to continuing to provide a world-class education for all Summit students.”
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