Wellington has to consider cuts and raise utility rates

By JoAn Bjarko
North Forty News

The financial well is going dry in Wellington after several years of dipping into general fund reserves to balance the annual budget.

Wellington town leaders are known for their conservative approach to budgeting, but this could be the year of tough decisions because the practice of spending reserves is no longer sustainable.

"We have to figure out some way to increase revenues or cut expenses," said town administrator Larry Lorentzen.

If the town continues to fund all services at the same level, the reserve fund is forecast to hit $231,000 by the end of 2011. That compares with almost $1.9 million in general fund reserves at the end of 2008.

The general fund is one of many parts of a town budget. This year's total budget to operate town government and make capital improvements is $8.4 million. Historically, the town does not spend everything in its budget.

Lorentzen said he does not have specific recommendations of where to cut, nor how much to leave in reserves next year.

The town board will hold its first budget work session at 6:30 p.m. on Nov. 9. Lorentzen said direction on what services to keep and what to pare should come from the elected board members, not from staff.

"The staff is looking for board direction, and then we can look at where we cut," he said.

For example, Wellington contracts with the Larimer County Sheriff's Office for law enforcement. This year the contract for four deputies, a sergeant and related expenses will cost the town about $632,000. The board could consider reducing the number of deputies, for example, Lorentzen said.

The general fund also pays for most of the recreation program. The board could choose to continue the same level of programs in 2011, but there would be nothing left for 2012 without making more drastic cuts elsewhere. Raising recreation fees is another option.

Wellington's reserves grew during the building boom years in the early half of this decade when use taxes from building permits generated large revenues. Wellington hit its peak year in 2004 when it approved 296 residential building permits. In comparison, the town has issued 22 residential permits through October this year, which is better than last year. In addition, commercial building permits this year include an addition at Advance Tank, a new clinic for Miramont Family Medicine and the foundation for a new poultry processing plant.

Wellington is seeing decreases in several other revenue sources. Sales tax collections for January through June this year were down 8.4 percent ($269,754) compared with 2009 ($294,387). Property taxes on vehicles were down 5.7 percent the first six months of this year ($25,494) compared with 2009 ($27,038). Sales taxes on vehicles were down 6.1 percent for the same period – $101,143 compared with $107,729 last year.

The town's good news on revenue is the highway users tax, up 25.7 percent. The tax on fuel brought in $87,339 the first half of this year compared with $69,484 last year.

Like other government entities, Wellington is waiting for the outcome of the Nov. 2 election to make better revenue forecasts for 2011. The town board will likely hold another work session on Nov. 23, and the board has to adopt the final budget on Dec. 14.

Rates going up

Wellington's engineering consultant told the board in October that it's time to raise water and sewer rates. At press time, the board was scheduled to adopt new rates on Oct. 26. Increases would go into effect Jan. 1.

For water use, the residential monthly base rate would go up 52 cents to $13.41. The commercial base rate for a 1-inch tap would increase $1.34 per month to $34.94. Rates based on gallons used will also go up.

Monthly base rates for sewer would go up $1 for both residential and commercial, and usage rates would increase as well.

Tap fees for new utility connections are also scheduled to increase next year.

The town's engineering firm is recommending ongoing annual increases to water and sewer rates through 2016, which the board will consider later.

The increases will cover current operating costs, with some funds held in reserve for future expansion of the utilities.

Information about the proposed budget and utility rates are available at town hall, 568-3381, or online at www.townofwellington.com.