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Council plans for revenue fluctuations

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By Katy Korkos

Tuesday’s work session for the county council was planned to provide councilors with a crucial piece of the puzzle in determining how to plan projects in relation to fluctuating county revenues. The fact that there is only one major producer of revenue for the county, with Los Alamos National Laboratory responsible for 70 percent of the county’s income through gross receipts taxes, is “not typical,” said Chief Financial Officer Steven Lynne.In the agenda documentation for Tuesday’s meeting, Lynne said, “GRT makes up approximately two-thirds of all governmental revenues and it is expected to be the most variable revenue source representing the greatest risk. In FY 2007, it was estimated that approximately 70 percent of GRT revenues were directly attributable to one taxpayer. Today, those political processes are in a higher-than usual state of flux, so staff’s ability to project GRT revenues with the same level of historical precisions is now diminished.”Lynne also explained that the county has reserve funds designated with each of the scenarios. The county has the required reserve fund equaling one-twelfth of county expenditures, as well as two additional reserves, totaling $17 to $18 million.The county’s office of management and budget has developed three scenarios with varying revenue projections for council to consider. The baseline scenario uses the laboratory’s 2008 budget, while the conservative scenario shows a 10-percent reduction in LANL revenues, and the worse-than-expected scenario shows a 15-percent reduction in LANL activity.“I had anticipated something more detailed, perhaps with numbers in it,” Lynne said, but due to the vagaries of the federal budget process, with no budget until just before Christmas, we haven’t completed the process.”Councilor Robert Gibson said he thinks the approach of estimating a range is “exactly what we need to look at.” Councilor Nona Bowman, who had requested the revenue projections be a part of council decisions on capital improvement projects, agreed.“I like this approach,” Bowman said. “I feel that the council can make some better decisions on what projects we can do.”Staff plans to continue the long-range financial plan discussion with council at both the Jan. 29 and the Feb. 5 council meetings.In other business, council approved the county’s comprehensive annual financial report with auditor’s opinions. Auditors from the independent accounting firm Moss Adams LLP told council that the audit resulted in an “unqualified opinion.” Auditor in charge Jim Thompson called it the “highest, cleanest opinion you can get. I think it’s top-notch here, with the number of CPAs you have. We questioned them to death, and they were very professional. You have some excellent people here.”“This assures the public that we watch over the taxpayers’ dollars very carefully,” Council Chair Jim Hall said.Council also approved a master plan for the county’s parks to serve as a guidance document for the Parks Division. The plan was completed in 2005, and has been used since that time by Parks Division manager Dick McIntyre, but was never formally approved by council. Adoption of the plan was approved in a 6-to-0 vote, with Councilor Jim West absent.Council’s next meeting is scheduled for Jan. 29 in the Council Chambers in the Community Building.