Water board lowers mil levy

“I think this mil levy is going to come back and bite us”

The Upper Gunnison River Water Conservancy District (UGRWCD) approved its annual budget for 2009, and in doing so reduced the district-wide mil levy from 2.0 to 1.772.  Technicalities aside, that comes out to a reduction in property taxes of $1.75 for every $100,000 of assessed valuation.   

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UGRWCD board member Gary Hausler was the initial proponent of reducing the mil levy and has gained support from other members during previous budget meetings. The board had lengthy discussions on changing the mil levy while planning for the 2008 budget, last December.  
Arguments to reduce the mil levy include having on-hand an already large general reserve of more than $2 million and a jump in property valuations in 2008 that resulted in an influx of  $500,000 in tax revenue last year for the UGRWCD.  
When Hausler brought up the discussion this year, he also noted the struggling national economy and chance to provide the UGRWCD’s constituents some financial relief.  The UGRWCD’s boundaries encompass all of Gunnison County and large portions of Saguache and Hinsdale counties, including Lake City.  
Those who wanted to keep a higher mil levy claimed the UGRWCD’s ultimate mission was to protect the Upper Gunnison Basin’s water, and a large cash surplus was necessary to defend against potential outside interests seeking to acquire part of the local water supply.  
Some board members also questioned the ability of the UGRWCD to raise the mil levy in the future if property valuations were to decrease.  
On November 20 the UGRWCD board voted seven to four to let staff prepare a budget with a reduced mil levy.
Opponents to reducing the mil levy at that time were board members Bill Nesbitt, Dennis Steckel, Steve Schechter and Ralph Grover.  
Only Schechter voted against reducing the mil levy during the UGRWCD’s most recent meeting on December 10.  
Grover, Hausler and Ken Spann were absent.  
“I’m going to vote no,” Schechter said.  “I think this mil levy is going to come back and bite us when property levels go down and we collect a whole lot less money.”
Board member Jim Pike explained that he had a harder time deciding.  “I have a tendency to agree with Steve, but I supported it before and I’m going to continue to support it.”
Board members Steve Glazer, Rebie Hazard, Nesbitt, Pike, Brett Redden, George Sibley and Steckel voted to use the reduced mil rate, and approved the budget for 2009.
Pike noted that the rate they approved was slightly less than the figure they anticipated in November—1.78 mils.  
Glazer said that mil rate would have resulted in a year-end reserve of $2,675,000.  
District manager Frank Kugel said the goal was to get the year-end reserve to $2.5 million.
Revenues will decrease by about $35,000 in 2009, but will still provide a $370,000 surplus over expenses.  
The UGRWCD’s expenses next year are budgeted to hold even with 2008, after nearly doubling between 2007 and 2008.  
Factors that contributed to the increase last year, which the UGRWCD is now mostly relieved of, include legal fees and engineering studies to resolve the Black Canyon of the Gunnison decree and Aspinall Unit management disputes.
Other increases this year include office rent, staff salaries and benefits, and computer and Internet services.  
The board is also putting $185,000 toward a Gunnison Basin agricultural water supply study; $5,000 toward a matching grant to conduct a feasibility study of hydropower generation at the Taylor Dam; and additional funds for water quality monitoring and environmental studies.  
Following the approval of the budget, Glazer asked about a fiscal review of the 2008 budget.  “There are a couple items that are slightly over budget… Are we required to amend the budget so we are not in excess of our expenditures?”
UGRWCD attorney John McClow answered, “No, because you did approve those expenditures in your monthly operational report approval.  The budget doesn’t compel you to match the numbers exactly. It’s just a projection of your anticipated expenditures.”
“I think it’s a worthwhile discussion to have,” Glazer said.  “Underages don’t matter; it’s overages.  To be responsible we should recognize that through formal action in the future.”
McClow repeated, “The time to do that is in the monthly expenditures report. Your general statement is completely accurate.  It’s a good policy.”
“A point well taken,” Redden said.