Dear Larimer County Commissioners and Residents,

The County Manager is responsible for presenting the annual budget to the Board of County Commissioners and for ensuring that it aligns with the Board's priorities as well as the longstanding history of conservative revenue forecasting and operating within our means. The 2024 Revised and 2025 Proposed Budgets comply with state laws, budgeting principles, funding requirements, and the Board’s guidance.

Larimer County is comprised of departments and divisions overseen by ten elected County officials established by the Colorado Constitution. These entities provide a wide range of services to residents, property owners, and visitors. Most services are delivered irrespective of municipal boundaries, ensuring that residents in both cities and unincorporated areas receive the same level of service. The County’s net operating budget is organized into five service categories: Public Safety; Human and Economic Health; Community Planning, Infrastructure, and Resources; Public Records and Information; and Support Services.

Each year’s budget includes a comprehensive five-year capital improvement plan. Capital projects are defined as one-time expenses that cost more than $50,000 and are expected to benefit the community for years to come. This includes investments in buildings, roads, property acquisitions, vehicles, equipment and maintenance, or rehabilitation of major assets. The first year of each five-year plan is included in the annual budget.

Larimer County continues to bear the cost of natural disasters, including increasingly frequent wildfires and floods. To provide a clear comparison of year-to-year expenses, disaster response costs are separated from the County’s normal operational budgets. The 2025 Proposed Budget includes funding for mitigation, response, and recovery efforts related to emergencies.

Budget Process and Guidelines

The County’s budgeting process is a continuous, year-round effort. Commissioners regularly review performance measures across the five service categories to ensure clear understanding of the services provided and the impact on the community. These reviews highlight trends and outcomes of County services, helping the Commissioners to prioritize budget decisions for the following year.

Planning for the upcoming fiscal year begins in the spring with a work session where Commissioners assess the internal strengths and weaknesses as well the external opportunities and challenges across each service category. The themes identified from this analysis help to shape the budgeting strategies

for the year ahead. During this session, the Budget Office presents revenue and expense forecasts, and the Commissioners provide direction for preliminary base budget targets for each department and elected office.

In early summer, Commissioners and staff gather resident input through community meetings, surveys, and online submissions. During this time, we also review data on compensation trends, the economy, state and federal legislation, and revenue projections that may impact Larimer County. These insights help to refine base budget targets, while program leaders and elected officials prepare budget requests.

Over the course of nearly two months, the County Manager, Assistant County Manager, and the Office of Performance, Budget, and Strategy meet with each department director and elected official to review submitted budget packets. Funding requests are thoroughly evaluated to ensure they are supported by data, conform to best practices, and respond to resident needs. Larimer County has consistently prioritized maintaining existing programs and infrastructure while supporting equitable and accessible service delivery over introducing new services; a philosophy maintained in the 2025 Proposed Budget.

The 2025 Proposed Budget was developed based on the new, lower property tax assessment rates enacted by the state assembly during the most recent special sessions (SB24-233 and HB24B-1001). As a result, the number of service proposals recommended for funding in 2025 is restricted to those supporting only critical services or programs.

Revenue Highlights

Property Tax: Larimer County’s largest General Fund revenue source is property tax. Most of the property tax collected by the County is distributed to other taxing authorities, primarily school districts, with portions also going to municipalities and special districts. Larimer County retains approximately 25% of the total property tax collected. While property taxes are assessed annually, property values are reappraised every two years. New state property tax legislation limits property tax revenue growth to 10.5% per two-year reappraisal cycle, with some exceptions for new construction, property taxes used for disaster recovery, and expiring tax-increment financing districts.

The County’s operating mill levy has remained 21.571 mills since 1992, distributed between the General Fund, Road and Bridge, Human Services, and Health and Environment. Additionally, 0.75 mills are collected and transmitted to Foothills Gateway, which provides services for individuals with developmental disabilities in accordance with a 2001 voter-approved initiative.

Sales Tax: The second-largest revenue source for Larimer County is sales tax. The County collects four dedicated sales taxes that fund specific, voter-approved services. These taxes are restricted in their use and do not directly contribute to the General Fund. Sales tax revenue is projected to remain flat in 2025 due to slower consumer spending, lower inflation, and a shift in preferences from retail goods to services.

• A 0.15% (15¢ on $100) sales tax supports Larimer County jail operations, generating enough revenue to cover about one-third of the jail’s operating expenses.
• A quarter cent (0.25%, 25¢ on $100) sales tax funds open space, with revenue shared between the County (50%) and its eight municipalities (50%).
• A quarter cent (0.25%, 25¢ on $100) sales tax funds behavioral health services, with portions of the revenue distributed to mental and behavioral health community service providers. The County completed construction of a behavioral health facility in 2023, with the first patients receiving services in December 2023.
• Another 0.15% (15¢ on $100) sales tax funds the construction and operation of The Ranch fairgrounds. The County is implementing The Ranch Master Plan, which includes new facilities, improvements to existing structures, and infrastructure upgrades.

External Fees and Charges: External fees, licenses, permits, and other charges for specific services represent a significant revenue source for essential County programs, including The Ranch, Solid Waste, Natural Resources, some programs at the Health Department, and others. The Acute Care Center at the Longview Behavioral Health Campus operates using a combination of sales tax funding and insurance billing for services. Fees and charges are typically used to offset the costs of providing the associated programs. However, many fees are set by state statutes or agencies and often fall short of covering the full cost of the service. In such cases, local tax revenue is used to bridge the gap.

Interest Earnings: The Treasurer's Office invests County reserves in safe, interest-bearing public funds investments. Interest rates are expected to decline in 2025, which may reduce earnings. However, lower rates are likely to increase recording fee revenues as refinancing and home sales increase. Additionally, Community Development permit revenues are projected to rise as lower interest rates stimulate development. We will continue to closely monitor these trends.

Grants from State and Federal Programs: In recent years, state and federal funding for services such as Human Services, Economic and Workforce Development, Health and Environment, and Community Justice Alternatives saw significant increases due to one-time COVID-19 response and recovery grants. Many of these programs expire in 2024, leading to reduced grant revenues for County programs.

Expense Highlights

Budgeted expenses are categorized into four main areas: operating costs relating to providing services, capital projects that occur during the budget year, disaster recovery costs, and non-operational expenses related to internal charges, transfers in between funds, sales tax administration, and internal services. 

Expenses are grouped into departments and elected offices that provide similar services. These are organized into five main service categories:

• Public Safety
• Community Planning, Infrastructure, and Resources
• Human and Economic Health
• Public Records and Information
• Support Services

Public Safety: The Commissioners' Office works closely with the elected Sheriff, District Attorney, and Coroner to ensure that public safety is properly funded. Additional services under this category include Alternative Sentencing, Community Corrections, and Emergency Management. The County provides these services to all residents, regardless of whether they live in rural areas or within municipal boundaries. These services include operating the county jail, funding death investigations, offering alternative sentencing and community corrections programs, providing pre-trial services, supporting competency courts in partnership with the 8th Judicial District, and overseeing emergency management and recovery. Larimer County is also statutorily responsible for providing primary funding for the District Attorney's office for the 8th Judicial District and for maintaining the facilities used by the 8th Judicial District, including courtrooms and Probation Service spaces.

In accordance with the State Constitution and statutes, the County carries significant responsibility for public safety. The Sheriff’s Office provides patrol services in unincorporated rural areas and, under Colorado Revised Statute 30-10-513, is responsible for coordinating fire suppression efforts during prairie, forest, or wildland fires in unincorporated areas, or when such fires exceed the capacity of local fire protection districts. The 2025 Proposed Budget continues to allocate resources toward mitigating future fire damage and assisting homeowners in forested areas in reducing their vulnerability to wildfires and natural disasters.

Community Planning, Infrastructure and Resources: This service category includes the following departments: Community Development, Engineering, Road and Bridge, Solid Waste, Natural Resources, and The Ranch.

Significant capital improvement spending continues within this category as outlined in the 2025 Proposed Budget. The Solid Waste Department is continuing to focus on the reduction, reuse, or recycling of materials and increasing the diversion of materials from the landfill. Construction of a new north landfill and, potentially, a modified central transfer station will begin this year as the existing landfill nears capacity. Ongoing discussions with regional partners are focused on ensuring long-standing partnerships remain in place and the financial viability of landfill facilities outlined in the Master Plan is sound. This work expected to continue into 2025.

The budget for The Ranch Events Complex includes continuing to implement a Master Plan for a new phase of development funded by the extension of the dedicated sales tax. Activities completed to date including the construction and opening of the 4-H Youth and Community Arena, expansion of the MAC Equipment Inc. Indoor Arena, RV Hookups to support events at The Ranch, and roadway improvements including construction of Arena Circle. The County intends to use available funds to continue major community capital improvement projects while evaluating opportunities for public-private partnerships that benefit the community in the long term. Emphasis continues to be on streamlining operations and efficiencies, nurturing community partnerships, and evaluating revenue opportunities to ensure long term financial sustainability.

Natural Resources remains committed to emphasizing partnerships and grant opportunities to fund acquisitions and enhancements to the portfolio of properties in their care. In 2025 the department will continue to focus on acquisition and conservation as well as the preservation and maintenance of existing open spaces, while making incremental improvements to both facilities and practices to address growing demands for service by our community. Revenues related to visitor fees have been reduced by the State’s vehicle registration Keep Colorado Wild Park Pass initiative. The department will focus on methods to increase visitorship in this new environment including adopting a more inclusive outreach approach to reach members of our community who may not have had access or exposure to our open spaces in the past.

A significant gap remains between the need for increased capacity on County roads and available funding. To address this, the County Commissioners have authorized a ballot measure that would levy a 0.15% sales tax (15¢ on every $100 of retail sales) to fund capital capacity projects for County roads if approved by voters in November.

Staffing levels within Road and Bridge, Engineering, and Community Development have remained unchanged from the 2023 Adopted Budget. However, Road and Bridge continues to face challenges in recruiting qualified seasonal maintenance workers. The department is actively working with Human Resources to address these hiring difficulties.

Human and Economic Health: This service category encompasses the County’s efforts in Human Services, Health and Environment, Economic and Workforce Development, Extension, and Behavioral Health. Programs in these areas rely heavily on federal and state grants, supplemented by matching local property or sales tax dollars. An ongoing challenge in budgeting for these services is the misalignment between federal, state, and county fiscal years, making it difficult to confirm program funding levels until after the County’s budget is adopted.

The 2025 Proposed Budget provides for the second year of operational costs for the new behavioral health facility through a contract with SummitStone Health Partners to provide services inside the Acute Care Center at the County’s Longview Behavioral Health Campus. This service is supported by a 2018 voter-approved dedicated behavioral health sales tax. The Department of Health and Environment continues their commitment to engage with community partners as they implement the Community Health Improvement Plan and develop strategies to address overall and inclusive community health issues. Their ongoing work as an arm of the Colorado Department of Health and Environment includes addressing environmental issues including inspecting and permitting septic systems, measuring air quality, and conducting restaurant inspections.

The County continues to deliver high-quality services, including food assistance, adult and child protection, childcare assistance, child support enforcement, and Medicaid administration. The Economic and Workforce Development Department remains actively engaged with regional partners, supporting economic development, business initiatives, job seekers, and programs that assist community members with disabilities and veterans.

Larimer County also continues to support community affordable housing in the 2025 Proposed Budget through an eviction prevention program, landlord engagement, and working closely with mobile home park owners and residents. In 2025 the County will utilize American Rescue Plan dollars for a one-time gap financing initiative aimed at retaining critical existing affordable housing stock.

Public Records and Information: This service category consists of elected offices, including the Assessor, Clerk and Recorder, and Treasurer and Public Trustee, as well as the County’s Public Affairs Office. The 2025 Proposed Budget includes funding to conduct these important services including the 2025 property reappraisal, tax administration, motor vehicle licensing, recording, and elections.

The Office of the Treasurer and Public Trustee is continuing to implement a unified credit card processing project in addition to statutory responsibilities and the Assessor’s Office is working to review and address a backlog of building permits so they can be appropriately incorporated into property value models. The Public Affairs office continues to focus on community outreach with an emphasis on increased engagement as well as assessing the legislative impacts on County services.

Support Services: This service category includes departments that support public-facing County programs and elected offices, including Human Resources, Information Technology, County Attorney, Facilities, Fleet Services, and Finance. The 2025 Proposed Budget allocates funding to ensure these programs operate efficiently and effectively and efficiently meet the needs of their internal customers.

Looking to the Future

The following are a few key issues facing Larimer County in the coming years. Many of these trends are being addressed in various ways in the 2024-2028 Five-Year Strategic Plan and incorporated by departments and elected offices in their service delivery plans.

Population Growth: Population growth is one of the primary drivers of increased demand on County services, including personnel, transportation, and facilities. These pressures are compounded by shifting and aging demographics in Northern Colorado and across the country. Future budgets will need to continue to address facility and equipment obsolescence, data storage and security pressures, and the growing demand for County services including public safety, alternative sentencing, behavioral health, and recovery and community resilience related to natural disasters as residents occupy more remote housing alternatives. Transportation needs may be met if voters approve a ballot measure that would levy a 0.15% sales tax (15¢ on every $100 of retail sales) to fund capital capacity projects for County roads and support leveraging state, federal, and local partner project funds.

Inflation: Although inflation is down from historic highs of the past few years, the rising cost of housing, childcare, goods and services is an enormous burden on County residents. Affordability challenges increase the need for public services and, since the County administers many government programs for vulnerable populations and criminal justice offenders, demand for these services is expected to grow. Rising costs of technology, insurance, personnel, and capital construction are also directly impacting the budget.

Climate Smart and Future Ready: Larimer County continues to prioritize sustainability through public programs, purchasing policies, equipment, and facilities. The County has also been directly impacted by the increasing frequency of natural disasters. To prepare for future disasters, the County has established and maintained a Disaster Contingency Fund, which reserves funds for disaster preparedness, response, recovery, and mitigation. In the event of a major FEMA-qualifying disaster, the County relies on these reserves for temporary and permanent repairs before receiving federal reimbursement, which can take many years. Maintaining sufficient reserves for disaster response and recovery is critical for the community.

Continued Financial Health: Larimer County currently holds a AAA credit rating, a distinction shared by less than 2% of counties nationwide. This rating is based on several factors, including the County’s relatively low debt burden, healthy reserve fund balances, and restrained approach to spending on new or increased programming. The 2025 Proposed Budget aims to maintain these favorable conditions. Future projects, including The Ranch improvements, the Solid Waste Master Plan, and addressing facility needs, must be carefully managed to maintain the County’s credit rating.

Revenue Source Stability: The primary source of discretionary revenue for the County is property tax. In 2022 and 2023 the state legislature passed legislation impacting property assessment rates in response to rapidly rising values – resulting in Proposition HH being placed on the 2023 ballot. After HH was voted down, legislators made additional adjustments to assessment rates. The cumulative impact of legislation passed in 2024 will reduce the County’s annual property tax revenue by $5.4 million. The latest law also subjects local governments to a revenue growth cap of 10.5% per reappraisal cycle.

Funded Budget Requests: Departments and elected offices thoughtfully prepared requests for additional funding. While almost $12 million in new requests for property tax funding, largely to increase or maintain existing services, were submitted, revenue constraints allowed for the funding of less than half of these requests. The funding requests in the table below have been included in the 2025 Proposed Budget.

Service Proposals

I would like to extend my appreciation to the departments and elected offices that contributed to the development of the 2024 Revised and 2025 Proposed Budgets. While the future remains somewhat uncertain, I commend our Larimer County leadership team for helping us live within our means. Continued responsible use of taxpayer dollars ensures that public services continue to benefit the community into the future and is a critical element of maintaining resident trust.

Sincerely,

Lorenda Volker

County Manager