Archuleta County’s Financial Troubles

Photo Sharing and Video Hosting at PhotobucketTrouble with a capital T that rhymes with B that stands for Broke

County employee layoffs, salary cuts, slashed programs-even a bank loan can’t resolve Archuleta County’s shortfall of $2.4 million in its $15 million 2007 budget. For the past eight years, the county has been spending like “drunken sailors,” as a former employee described the situation. Whatever the cause, the consequences are going to affect Archuleta residents for several years to come.Some of the problems certainly stem from Archuleta’s rapid growth, over 17% since 2000 making it one of the fastest growing counties in the state with its population hovering around 12,500. Second home owners, who own over 59% of the available property, have been flooding into the area while major tax revenue commerce has been trickling in. Three national forests cover over 50% of the county, which also includes the Southern Ute Indian Reservation. Therefore, Archuleta has few resources for revenue, but a lot of demand for services.

Photo Sharing and Video Hosting at PhotobucketThe county administrator Bob Campbell explained to the Durango Herald how the county got into financial problems.

The Archuleta County government has spent more money than it has received every year since 1999, Campbell said. County officials have been dipping into reserves every year without making adjustments in expenditures or staffing levels, he said.

“Doing that for eight years has certainly put us in a precarious position,” he said.

He blamed the financial crisis on frequent turnover among administrators, an inflated payroll, lower-than-expected sales-tax revenue, spending exceeding revenue and expenses being carried over from last year.

Adding to Archuleta’s financial woes, county officials have discovered that a $3.2 million fund dedicated to road and bridge projects was emptied, probably illegally used for general operating expenses. In a county press release, county staff noted that “several negative or zero fund balances, including restricted-use funds, and a certain amount of cash cannot be accounted for.”

The county plans to engage a financial-management firm to conduct a forensic audit, implying that there are concerns of possible fraud.

The plot thickens more: Archuleta’s assessor is suing the county commissioners for failing to follow proper procedures when they cut the assessor’s budget by 41% and eliminated seven positions in the office, according to the Durango Herald. The other county staffing and budgets were reduced about 20% in comparison. The assessor was also upset that the county had spent over $8,000 for a retreat in April.

Archuleta commissioners are forming a citizen task force to help resolve the financial crisis and review the county’s revenues and expenditures. There were so many applications, the commissioners will be holding interviews for the five to seven member panel.