Section 1: Budget Process

1. Balanced Budget: The County’s budget shall be balanced. For each fund, fiscal year expenses shall not be budgeted higher than fiscal year revenue, plus available fund balances, used in accordance with reserve policies.
2. Budget Process: The annual budget process is intended to weigh all competing requests for County resources within expected fiscal constraints. Levels of service will increase or decrease based on the availability of resources. Requests for new programs made outside of the annual budget process are discouraged. Generally speaking, new initiatives will be financed by reallocating existing County resources to the services with the highest priorities.
3. Budget Officer: The Board of County Commissioners must appoint or designate a Budget Officer to prepare and submit the annual budget.
4. Public Participation: The Proposed Budget must be submitted by the Budget Officer to the County Commissioners by October 15^th of each year. A copy of that proposed budget must be available for inspection by the public, until such time as the annual budget is approved and appropriated by the Commissioners.
5. Adopt Budget in Noticed Hearing: The budget must be adopted at a legally noticed budget hearing before December 15, by the Board of County Commissioners.

Section 2: Required Elements of Budget

1. Classified by Fund and Spending Agency: All revenue and expenditure information must be classified by fund, and within each fund, by “spending agency”. Spending agency means any office, unit, department, board, commission and/or institution which is responsible for some sub-set of particular revenues and/or expenditures.
2. Expenditure Data Information: All expenditure data must show the object of each expenditure.
3. Revenue Data Information: All revenue data must show its source.
4. Must include Appropriate Narrative information: At a minimum, the budget should include written narratives that provide the following:
   1. Budget Message: Information about factors that influenced preparation of the budget,
   2. Basis of Budget: information about the basis of the presentation of the budget, as it relates to the County’s accounting and financial statement presentation,
   3. Revenue Assumptions and Analysis: information about revenue assumptions and trends,
   4. Department Descriptions: information about the services to be delivered in the coming year, recent accomplishments and future plans; to the extent known, and
   5. Lease Purchase Agreements: information about lease-purchase agreements, if any exist.
5. Must show the corresponding figures for four years: The budget should show the above information for a minimum of four years, being; the proposed budget year, the current fiscal year (estimated through the end of the year) and the two most recent prior completed fiscal years.
6. Must show Fund Balance information: The budget must show estimated beginning and ending fund balances from prior years.
7. Must include a Table of Contents: A table of contents, with page numbers must be included.
8. Must include a Glossary: A glossary of terms used shall be included.

Section 3: Fund Reserves and Contingencies

1. TABOR Reserve: The TABOR amendment to the State Constitution requires the County to establish and maintain an emergency reserve fund of 3% of all covered funds. The reserve cannot be used for economic conditions, revenue shortfalls or salary and benefit increases. Any use of the TABOR reserve must be replaced within one year. Because of the constitutional restrictions and the requirement to repay this reserve by the end of the next fiscal year, use of the TABOR reserve is limited to extreme situations.
2. General Fund “Working Capital Reserve”: County policy permits the use of “available fund balances” in balancing the budget. However, an amount of General Fund balance, equal to three (3) months of budgeted General Fund operating expenditures, shall not be utilized to balance the budget, but shall instead be treated as a “working capital reserve”. This reserve is intended to insure the availability of cash to cover monthly expenses in excess of monthly revenues, as occur seasonally within a calendar year.
3. General Fund “Strategic Reserve”: County policy permits the use of “available fund balances” in balancing the budget. However, an amount of General Fund balance, equal to four (4) months of budgeted General Fund operating expenditures, shall be committed as a “strategic reserve”. This reserve shall only be utilized under special conditions and with special approval, as follows: During the budget process, if revenues are projected to decline, and/or inflation or other factors drive expenses up in such a way that meeting the Committed Fund Balance Reserve target is not possible without disruption of services or creating significant hardship, then the County Manager may propose the appropriation of some part of the Strategic Reserve, to mitigate the anticipated disruption and hardship. Final commitment of strategic reserves to meet operational, capital or debt expenditures shall require authorization from the Board of County Commissioners. This may continue for any number of budget cycles, as long as the conditions causing the hardship continue. However, only the Strategic Reserve may be appropriated for this form of budget relief. During periods when it is proposed that the Strategic Reserves be appropriated, the County Budget Officer shall provide a plan which includes the steps necessary to ensure meeting on-going expenditures with reliable anticipated revenues. When the Strategic Reserve has been fully consumed, future budgets must be balanced without consuming any part of the Working Capital Reserve, or by misapplication of any non-spendable, restricted or assigned parts of the General Fund balance. When conditions permit, the Strategic Reserve shall be restored by budgeting expenses lower than anticipated revenue, until it is again fully funded.
4. General Fund “Unassigned Fund Balances”: Unassigned fund balances are the net portion of the total fund balance which has not been classified as “Nonspendable”, “Restricted”, “Committed”, or “Assigned”; and they are available for appropriation at the discretion of the Board of County Commissioners, during the annual budget process. The Board recognizes that unassigned fund balances are created by prior year surpluses that may or may not materialize in future years. Therefore, they will make every effort to focus the appropriation of these undesignated funds toward non-recurring, non-operational expenditures (such as Capital Improvements) and not toward expansion of the General Fund operating budget.
5. Contingency Line Items: To provide budget flexibility for unanticipated expenditure during the year, one or more contingency line items may be added to the budget of each fund, in accordance with state law and County policy.

Section 4: Revenue

1. Revenue Diversification: The County values a diversified mix of revenue sources to mitigate the effects of unanticipated changes that may occur in a single revenue source.
2. Property Tax Revenue: Property tax revenue assumptions shall be based on the total new assessed and actual values (for real and personal property) certified by the County Assessor. The initial certification must be provided by the County Assessor by August 25^th of each year. Changes in assessed valuation shall be made by the Assessor by December 10^th of each year. Property tax shall be distributed to the General fund, and other Governmental funds, by adjustment of the Mill Levy, as certified by the County Commissioners no later than December 22^nd of each year. Property tax shall be limited to the lessor of the TABOR limitation and the 5.5 percent limitation, as calculated on the Property Tax Revenue Limitation Calculation Worksheet Form DLG 53A.
3. Property Tax Revenue Distribution: For this budget year (2024), Property Tax (net of Abatements) shall be distributed as follows:
   1. General Fund: 90%
   2. Road & Bridge Fund: 5%
   3. Human Services Fund: 5%
4. Unpredictable Revenue: Many sources of revenue are difficult to forecast. For example, Sales tax revenue is highly variable, being directly affected by national business cycles. For revenue sources judged to be unpredictable, amounts may be budgeted low, to insure that the revenue budget is not higher than what is actually received as the year unfolds.

Section 5: Debt Expense

1. Debt Service Expense: Payment of principal and interest on an obligation resulting from the issuance of bonds or notes.
2. Debt Use: Debt will not be used to finance current operating expenses.
3. Debt Period: The debt period for bonds used to finance capital projects shall not exceed the useful life of the project(s) being financed.
4. Lease Agreements: The Board of County Commissioners is authorized to execute lease agreements on behalf of the County.
5. General Obligation Debt: Per State law, the outstanding amounts of General Obligation bonds are not to exceed 3% of the actual value of property within the County, as determined by the County Assessor.

Section 6: Capital Improvement Expense

1. Capital Improvement Definition: A Capital Improvement is a permanent major addition to the County’s real property assets, including the design, construction or purchase of land, buildings, facilities or major renovations of the same, or the procurement or major overhaul of capital equipment. Capital improvements and capital equipment have an initial value of $5,000 or more and are budgeted as Capital Outlay.
2. Long Term Capital Improvement Planning: The annual operating budget process is separate from the long term capital improvement planning process. Long term capital improvement planning will be performed separately for each fund and the process and tools used for each fund vary according to the unique properties and circumstances of that fund. For example, for the Road & Bridge fund, the primary planning document will generally be the periodically updated “5 Year Road Plan”. For the Airport fund, the primary planning document will be the annually updated “Airport Improvement Plan”. Reference to other planning related documents may also be made. During each year’s annual operating budget process, Department Directors make reference to their long range plans and propose Capital Outlay expense for the coming year, justified against their long range planning documents. Long term capital improvement plans are incorporated into Long Range Financial Modeling, used by the County to test the reasonableness of proposed annual budgets.
3. Avoidance of Capital Improvement Related Debt: The County may finance capital outlays by assuming debt, when necessary. However, when possible, the Budget Officer and Finance Department will devise processes, systems and procedures which help the County generate and/or reserve unassigned and/or unrestricted fund balances sufficient to facilitate execution of long term capital improvement plans.