Finance Director

Date: Dec 16, 2025

To: The Archuleta County Board of County Commissioners and the Citizens of Archuleta County

We are pleased to deliver herewith the 2026 Operating Budget for Archuleta County, Colorado. The 2026 budget represents the County’s comprehensive financial plan for the upcoming fiscal year beginning January 1, 2026 and serves as a guide for the allocation of available resources.

The forces driving the budget include the following:

• State Statutes and County Policy
• External Influences, beyond the control of the County
• Internal Strategic Considerations

State Statutes and County Policy

This budget has been prepared in accordance with all applicable Colorado State Statutes and Generally Accepted Accounting Principles. It largely follows the best practices recommended by the Government Finance Officers Association (GFOA).

Additionally, this budget adheres to Archuleta County’s budget policies, as outlined in the budget book.

While this budget is specifically for 2026, Archuleta County utilized an internally developed Long Range Financial Modeling system to analyze the impact of current-year decisions on future resources and budgets. This system also estimates the potential drain on County resources from both likely and potential future events. As a result, this 2026 budget was developed with a long-term perspective, avoiding short-term solutions that could create long-term problems.

Every budget relies on a set of assumptions about the future, and this one is no different. The assumptions used in preparing the 2026 budget are summarized within this budget book. It is clear from these assumptions that the County avoids speculation and uses conservative budgeting practices, which often lead to under-budgeted expenses and higher-than-expected revenues. In practice, this results in fund surpluses during prosperous years, allowing for accelerated capital replacements in the following year. Given that the County has several costly, aging capital assets, there is minimal risk of over-investment in capital replacements, at least for the foreseeable future. The County’s conservative budgeting approach also means that in the event of a recession in the coming years, it is likely that the County will be able to operate smoothly and consistently provide services to a community that may be under significant stress.

External Influences beyond the control of the County

The budget is always very much affected by the environment and conditions which surround it and over which the County has no control. This includes things like revenue trends, changes in the cost of goods and services, and population growth. Here are a few of the major external issues affecting the County and a brief explanation of how the County responded in recent years and within the 2026 budget.

Revenue trends:

The County’s operational budgets are built on the foundation of its core tax revenue, in particular, Property Tax and Sales Tax revenues. Between 2025 and 2025, Property Tax revenue is expected to increase by about $684,902 to $9,024,635. Sales Tax revenue in 2026 was budgeted to be 1% higher than the projected year-end total for 2025. For the County, the last economic boom (before the recession) lasted until 2010. Revenue declined in 2011 and did not return to 2010 raw-dollar levels until early 2020. That “recovery” has taken 10 years. If we adjust the raw dollar revenue to reflect its purchasing power, it becomes clear that no actual recovery has occurred. Purchasing power in 2026 is expected to exceed that in 2025. And more than $2.4M more than in 2020. See the graph below.

Changes in the cost of goods and services:

While the County has continual, direct experience with changes in the cost of goods and services, the methods used to aggregate them in the marketplace are complex and extremely time-consuming. Therefore, for planning purposes, the County uses a Consumer Price Index (CPI) produced by the Bureau of Labor Statistics (BLS) for the Denver-Aurora-Lakewood area. While creating the 2026 budget, this BLS data was used to project the 2025 CPI, which was rounded to a 2.1% price increase. Note that rates of cost increase varied each quarter during the year; from about -1.6% to 2.02%.

Population growth:

The Bureau of Census has projected growth in Archuleta County that works out to about 1.55% per year for the period 2010 to 2020. The County population grew an astonishing 14% during just the summer months of 2020. We believe this growth comes largely from “COVID refugees”; persons fleeing their resident cities to find a safer place to live during the pandemic. Certainly, the rise of “remote work”, “Zoom meetings” and “home/internet schooling” have provided many families with the option to change their physical location quickly. Whatever the actual cause of the growth, the additional residents are placing greater strain on existing infrastructure and increasing demand for services. The graph below shows how the number of County staff serving the population has not kept pace with the change in population for over 15 years.

Decisions at the ballot box:

The County Detention Facility became unusable during the second quarter of 2015. The County has twice (during 2017 and 2018) asked the voters for additional funding for a Justice System Capital Fund, to facilitate the construction of a new Detention Facility, as well as Sheriff’s Offices and space for a Combined Dispatch Facility. Despite the state mandate that each county must have a detention center, the voters turned down the tax increase both times, forcing the County to finance construction with no new revenue stream to cover the debt. As a result, the County had to shift resources away from the Road & Bridge fund, further limiting the amount available for badly needed road improvements.

County’s response to these conditions:

Taken together, the conditions continue to threaten the County’s financial health. During the last decade or so the County has employed several “survival tactics” in an effort to cope as follows:

• Keep operating costs lower than projected revenue, regardless of the “need” for increases.
• Limited (or no) addition of new personnel.
• Limited (or no) addition to operating costs, beyond adjustments to the CPI.
• Aggressively control spending, to come in under budget each year as much as possible.
• Defer Capital Replacements and Capital Maintenance when necessary.
• Use “unanticipated revenue” to catch up with deferred Capital Replacements and Capital Maintenance.
• Never use “unanticipated revenue” to expand operating costs.

In recent years, the County has focused the majority of its energy on capital replacement and maintenance projects that had been deferred for far too long.

When the County lost the use of the majority of the old Courthouse building, it lost its Detention Facility, Sheriff’s Offices, Probation Offices, Judge’s Chambers, and Court Clerk Offices. All Archuleta inmates had to be transported to our neighboring La Plata County Detention Facility. Court cases likewise had to be held in La Plata County. Sheriff’s personnel, Probation Officers, Judges and Court Clerk staff were all forced into wildly dispersed, temporary offices.

The County is investing in expanding local public transportation due to a shortage of buses, inadequate storage for them, and the absence of a transportation hub. To address these transportation needs, staff secured over $2 million in grant funding for a new facility, two new buses, bus shelters, and kiosks. The design of the complex was completed in the fall of 2022, and the project is expected to be finished by the summer of 2025.

During 2020, the County completed construction of a new $17.8M Detention Facility. This was our largest and most urgent capital need. We also procured additional land, and remodeled an existing building on the site to provide a $1.27M facility for our Sheriff’s Office and for Combined Dispatch. In addition, the Design was completed, and construction begun, on a new $5.86M Court Facility. Our new Justice System Complex was completed during the spring of 2022.

The Department of Human Services officially moved into a new building during the summer of 2022. The Archuleta County Housing Authority constructed the building for the new home of the Department of Human Services thru the County contribution of $1.2M in 2020. These funds were disbursed in 2020 and the project was completed in summer of 2022.

With the shortage of office space and with the 449 San Juan Street building being sold in 2023, the County has a true need for a new Administration building to include County Treasurer, Assessor, and Clerk offices. The County Treasurer, Assessor, and Clerk’s offices have been relocated to a temporary facility until the new Administration Building is approved.

In 2024, Road & Bridge maintenance and major Road Capital Improvement projects were completed and an additional project started in the fall of 2025 with an expected completion during the summer of 2025. In the next year the main focus will be on Road & Bridge maintenance, until additional funds are available for additional Road Capital Improvement projects.

There are still looming capital projects that have not been addressed. Also, the County has suppressed increases in operational costs quite severely for many years. Eventually, service to citizens will seriously erode, unless one or more of the following occurs:

1. The core revenue streams of the County grow faster than the rate of inflation for a prolonged period of time… something that has not occurred for over a decade.
2. Very significant grant funding is procured, or
3. The voters approve increased rates of taxation.

Summary Information

A number of County-Wide summaries are included in this 2024 budget book to aid the reader, including the following:

• Revenue and Expenditure Charts
• Governmental Funds Summary
• Proprietary Funds Summary
• Governmental Fund Trends
• Proprietary Fund Trends
• Debt Service Requirements
• Capital Outlay Summary
• Staffing Trends

Conclusion and Acknowledgments

Archuleta County continues to face several very serious challenges.

Among the most serious are finding ways to fund additional facilities for the County Treasurer, County Clerk and County Assessor’s offices, while also improving the overall County Road system without crippling other County services.

Finally, the development of the annual budget is always the sum of the efforts of many employees, working on complicated and often tedious budget tasks. Without their cooperation, a well-constructed budget would not be possible. The single largest burden of the development of the annual budget falls to the Finance Department staff, who have once again delivered at the highest level of expertise and professionalism. Lastly, we would like to acknowledge the Board of County Commissioners and the Elected Officials for their efforts and cooperation in the development of this budget.

Chad Eaton, Finance Director