2018-Adopted-Budget-Book-(Final-01.19.2018)

Garfield County Adopted Budget 2018 Garfield County |108 8th Street | Glenwood Springs | Colorado 970.945.1377 |www.garfield-county.com

Table of Contents 2BUDGET MESSAGE.......................................................................................................................................7SECTION I – INTRODUCTION......................................................................................................................9 ECONOMIC AND DEMOGRAPHIC PROFILE.....................................................................................................9 LOCATION ..........................................................................................................................................9 HISTORY.......................................................................................................................................... 10 DEMOGRAPHICS ............................................................................................................................... 12 ECONOMIC CONDITIONS.................................................................................................................... 14 OPERATING PERFORMANCE INDICATORS .............................................................................................. 23 ECONOMIC SUMMARY AND BUDGET FORECAST......................................................................................... 24SECTION II – STRATEGIC PLAN ................................................................................................................ 25 STRATEGIC PLAN PROCESS...................................................................................................................... 25 BOARD OF COUNTY COMMISSIONERS POLICY DIRECTIVES............................................................................ 26 INFRASTRUCTURE AND INVESTMENT .................................................................................................... 26 HEALTH AND HUMAN SERVICES .......................................................................................................... 26 ORGANIZATIONAL, CORE AND INTERNAL SERVICES ................................................................................. 27 COMMUNITY OUTREACH AND TRANSPARENCY ...................................................................................... 27 ECONOMIC DEVELOPMENT................................................................................................................. 27 FEDERAL AND STATE POLICY AGENDA .................................................................................................. 28 ELECTED OFFICIALS STRATEGIC PLANS ...................................................................................................... 30 ASSESSOR........................................................................................................................................ 30 CLERK AND RECORDER....................................................................................................................... 30 CORONER........................................................................................................................................ 30 SHERIFF .......................................................................................................................................... 31 TREASURER AND PUBLIC TRUSTEE ....................................................................................................... 31 DEPARTMENT WORK PLAN HIGHLIGHTS ................................................................................................... 32 ADMINISTRATION ............................................................................................................................. 32 COMMUNITY DEVELOPMENT .............................................................................................................. 32 COMMUNICATIONS........................................................................................................................... 33 CRIMINAL JUSTICE SERVICES ............................................................................................................... 34 FAIR AND EVENTS ............................................................................................................................. 34 FINANCE ......................................................................................................................................... 34 HUMAN RESOURCES ......................................................................................................................... 35 HUMAN SERVICES............................................................................................................................. 35 INFORMATION TECHNOLOGY .............................................................................................................. 36 PROCUREMENT ................................................................................................................................ 36 PUBLIC HEALTH................................................................................................................................ 37 FACILITIES AND FAIRGROUNDS ............................................................................................................ 37 ROAD AND BRIDGE ........................................................................................................................... 38 VEGETATION MANAGEMENT .............................................................................................................. 38 MOTOR POOL.................................................................................................................................. 39 SOLID WASTE DISPOSAL .................................................................................................................... 39 ORGANIZATIONAL CHART....................................................................................................................... 40SECTION III – BUDGET PREPARATION ..................................................................................................... 41 ANNUAL BUDGET PROCESS .................................................................................................................... 41 GARFIELD COUNTY ADOPTED BUDGET 2018

FINANCIAL POLICIES .............................................................................................................................. 43 3 PURPOSE......................................................................................................................................... 43 AUDITING AND FINANCIAL REPORTING ................................................................................................. 43 FUND ACCOUNTING .......................................................................................................................... 43 BASIS OF ACCOUNTING AND BUDGETING.............................................................................................. 44 BALANCED BUDGET DEFINITION.......................................................................................................... 45 AMENDING THE BUDGET.................................................................................................................... 45 MONITORING THE BUDGET ................................................................................................................ 45 OTHER BUDGETARY/FINANCIAL POLICIES ............................................................................................. 46 FINANCIAL PERFORMANCE MEASURES ..................................................................................................... 49 LONG TERM FINANCIAL PLANNING .......................................................................................................... 50SECTION IV – BUDGET OVERVIEW .......................................................................................................... 51 BUDGET SUMMARY............................................................................................................................... 51 REVENUES ........................................................................................................................................... 53 TAXES............................................................................................................................................. 54 INTERGOVERNMENTAL REVENUES ....................................................................................................... 56 CHARGES FOR SERVICES ..................................................................................................................... 57 INVESTMENT EARNINGS..................................................................................................................... 58 OTHER REVENUES............................................................................................................................. 58 EXPENDITURES ..................................................................................................................................... 59 PERSONNEL COSTS............................................................................................................................ 60 FUND BALANCE .................................................................................................................................... 62 SUMMARY....................................................................................................................................... 62 INTERFUND TRANSFERS ..................................................................................................................... 64 MAJOR FUND SUMMARIES..................................................................................................................... 65 GENERAL FUND................................................................................................................................ 65 CAPITAL EXPENDITURES FUND ............................................................................................................ 65 HUMAN SERVICES FUND .................................................................................................................... 66 ROAD AND BRIDGE FUND................................................................................................................... 67SECTION V – GENERAL GOVERNMENT ................................................................................................... 69 SUMMARY ........................................................................................................................................... 69 GENERAL GOVERNMENT, GENERAL FUND................................................................................................. 71 REVENUES – SUMMARY..................................................................................................................... 71 EXPENDITURES – SUMMARY............................................................................................................... 72 BUDGET DETAIL BY GENERAL FUND OFFICES AND DEPARTMENTS ................................................................. 73 GENERAL......................................................................................................................................... 73 BOARD OF COUNTY COMMISSIONERS .................................................................................................. 73 ASSESSOR........................................................................................................................................ 73 CLERK AND RECORDER....................................................................................................................... 74 SURVEYOR....................................................................................................................................... 75 TREASURER...................................................................................................................................... 75 PUBLIC TRUSTEE............................................................................................................................... 75 COUNTY ATTORNEY .......................................................................................................................... 76 COUNTY MANAGER .......................................................................................................................... 76 COMMUNICATIONS........................................................................................................................... 77 GARFIELD COUNTY ADOPTED BUDGET 2018

COMMUNITY DEVELOPMENT .............................................................................................................. 77 4 FINANCE ......................................................................................................................................... 77 FACILITIES........................................................................................................................................ 78 HUMAN RESOURCES ......................................................................................................................... 78 INFORMATION TECHNOLOGY .............................................................................................................. 79 OIL AND GAS ................................................................................................................................... 79 PROCUREMENT ................................................................................................................................ 80 FUND ADMINISTRATION .................................................................................................................... 80 EMERGENCY RESERVE FUND ................................................................................................................... 81 CLERK & RECORDER EFTF FUND ............................................................................................................. 81 RETIREMENT FUND ............................................................................................................................... 81 OIL AND GAS MITIGATION FUND............................................................................................................. 82 GARFIELD COUNTY GRANT FUND ............................................................................................................ 82SECTION VI – PUBLIC SAFETY .................................................................................................................. 83 SUMMARY ........................................................................................................................................... 83 GENERAL FUND, SHERIFF ....................................................................................................................... 84 GENERAL FUND, CORONER..................................................................................................................... 85 GENERAL FUND, DISTRICT ATTORNEY....................................................................................................... 85 GENERAL FUND, CRIMINAL JUSTICE SERVICES............................................................................................ 85 COMMISSARY FUND .............................................................................................................................. 86SECTION VII – HEALTH AND WELFARE .................................................................................................... 87 SUMMARY ........................................................................................................................................... 87 PUBLIC HEALTH FUND ........................................................................................................................... 88 HUMAN SERVICES FUND ........................................................................................................................ 89SECTION VIII – PUBLIC WORKS................................................................................................................ 91 SUMMARY ........................................................................................................................................... 91 GENERAL FUND, VEGETATION MANAGEMENT ........................................................................................... 92 ROAD AND BRIDGE FUND....................................................................................................................... 93 AIRPORT FUND..................................................................................................................................... 93 CONSERVATION TRUST FUND.................................................................................................................. 94 TRAVELER’S HIGHLAND PID FUND........................................................................................................... 94 TRAFFIC IMPACT FUND .......................................................................................................................... 94SECTION IX – SOLID WASTE DISPOSAL .................................................................................................... 95 SOLID WASTE DISPOSAL FUND................................................................................................................ 95SECTION X – CULTURE AND RECREATION............................................................................................... 97 SUMMARY ........................................................................................................................................... 97 GENERAL FUND, CSU EXTENSION SERVICES .............................................................................................. 98 GENERAL FUND, FAIRGROUNDS .............................................................................................................. 98 COMMUNITY EVENTS FUND.................................................................................................................... 99 LIVESTOCK AUCTION FUND..................................................................................................................... 99SECTION XI – INTERGOVERMENTAL SERVICES...................................................................................... 101 MOTOR POOL FUND ........................................................................................................................... 101SECTION XII – CAPITAL EXPENDITURES................................................................................................. 103 SUMMARY ......................................................................................................................................... 103 CAPITAL EXPENDITURES FUND .............................................................................................................. 106 GARFIELD COUNTY ADOPTED BUDGET 2018

SECTION XIII – STAFFING....................................................................................................................... 107 AUTHORIZED PERSONNEL..................................................................................................................... 107 PERSONNEL CHANGES ......................................................................................................................... 109 POSITION ADDITIONS ...................................................................................................................... 109 POSITION ELIMINATIONS.................................................................................................................. 109 PERSONNEL DISTRIBUTION ................................................................................................................... 110SECTION XIV – DEBT SERVICE................................................................................................................ 113 POLICY.............................................................................................................................................. 113 DEBT ISSUES ...................................................................................................................................... 113 LEGAL DEBT MARGIN .......................................................................................................................... 113GLOSSARY........................................................................................................................................... 115 GARFIELD COUNTY ADOPTED BUDGET 2018 5

GARFIELD COUNTY ADOPTED BUDGET 2018 6

Budget MessageDecember 29, 2017 County Administration 108 8th Street Glenwood Springs, Colorado 81601Dear Commissioners and Citizens of Garfield County,We are pleased to present the 2018 Adopted Budget for Garfield County. This budget is the result of a six-month process that included internal review meetings, workshops, and public hearings, all involving ourElected Officials, Department Heads, and you, the Board. Adopted on November 13, 2017, in conformity withthe Local Government Budget Law of Colorado, the budget complies with generally accepted accountingprinciples and all relevant statutes.The budget is a financial plan allocating resources strategically to reflect your policy directives and those ofthe Elected Officials of Garfield County, within the constraints of available resources. The plan providesadequate funding to continue current levels of operations with a focus on effective and efficientmanagement, enhancement of services, and maintenance and replacement of capital assets, as needed.BackgroundGarfield County’s economy continued to show signs of improvement in 2017 in all sectors except for theenergy industry. This trend is expected to continue in 2018 with growth in the housing and job markets, risingincomes, and increasing retail, tourism, and related sales tax revenues. Property tax revenues have decreasedin 2018 due to both a lower price and production of natural gas in 2016, the year in which assessments aremade for 2018 revenues. In all, revenues for 2018 are expected to be approximately $88.6 million, about$2.6 million less than 2017 revenues. The reduction is due primarily to declining natural gas production andsoft market pricing which is expected to have a major impact on revenues for 2019 as well. We counselprudence and restraint regarding multiyear capital projects because a sustained reduction in natural gasproduction that could put a significant strain on the county’s reserves.The County continues to experience strong demand for many of its services, especially Human Services andRoad and Bridge projects. The direction from the board to our staff, was to provide a balanced operatingbudget; maintain services at their current level; sustain current employee count; and provide a minimalemployee merit increase. The Board’s policy called for the adoption of a balanced operating budget and totalfund balances above $100 million. With careful and prudent management and efficient use of funds, theCounty will continue to provide quality services and maintain operating expenditures in 2018. This budgetmeets both goals.Budget SummaryThe 2018 budget estimates $88,582,419 in revenues and appropriates $104,833,432 in expenditures. Thedifference is taken from fund balances and will be used for discretionary grants and capital projects thatsupport the Airport, Remote Communications, Fairgrounds and various infrastructure improvements, some GARFIELD COUNTY ADOPTED BUDGET 2018 7

of which are carried forward from 2017. These proposed capital and discretionary items will draw down fundbalance by $16.3 million. The 2018 year-end total fund balance projection is $102.7 million.Operating revenues exceed operating expenditures by approximately $175 thousand resulting in a balancedbudget. The County’s operating expenditures are budgeted at $82.9 million, a 4% decrease from 2017.Operating efficiencies and prudent cost reductions produced this result.Capital expenditures are budgeted at $12.8 million and include capital in support of operations andreplacement capital. Significant capital expenditures include the replacement of two communication towers,a grinder for the County’s landfill operations, construction of an Airport snow removal equipment facility,completion of an Airport fog seal runway and taxiway ramp, and the continued development of theFairgrounds as a year round event center. Road and Bridge projects include construction of the Fairgroundsand CR207 Carr Creek arch culverts; the Battlement Mesa drainage project; and various asphalt pavingprojects including CR 214 Peach Valley Rd (6.1 miles), CR 245 Buford Rd (4 miles), CR 335 Colorado River Rd(3.8 miles), CR 111 Prince Creek Rd (1.35 miles), CR 168 Oak Meadows Subdivision, CR 229 Ukele Lane (1.4miles) and CR 326 W. Chipperfield (2 miles).Discretionary expenditures total $9.1 million that includes the back-fill for Road and Bridge property taxdistributions to the municipalities within Garfield County; RFTA bus services; and grants to various non-profitorganizations and other governments.The total personnel budget decreased 0.2% from 2017, reflects a reduction of 3 positions from the prior year,an 8.5% increase in health insurance costs, a performance based pay increase of 2.5% and an equityadjustment for certain positions. Also included in this year’s personnel budget, is the continuation of theCounty’s Health and Wellness Education Program. The total budgeted headcount for 2018 is 513.ConclusionOverall, the 2018 budget and the policy-driven strategic plan enable Garfield County to continue to providehigh levels of service to its citizens; invest in prudent capital improvements; and support municipalities withkey infrastructure projects, while maintaining a strong financial position.We thank the Board of County Commissioners, the Elected Officials, and all employees of Garfield County fortheir efforts and cooperation in adoption of this budget.Sincerely,Kevin Batchelder Theresa WagenmanCounty Manager Finance Director GARFIELD COUNTY ADOPTED BUDGET 2018 8

Section I – INTRODUCTIONEconomic and Demographic ProfileLocationGarfield County is one of the largest counties in Colorado, incorporating nearly 3,000 square miles on thewestern boundary of the state. The County is situated approximately 150 miles west of Denver and 330 milessoutheast of Salt Lake City, Utah. The County is bisected by a 70 mile stretch of interstate 70, which parallelsthe Colorado River.The western portion of the county is a sparsely populated, high desert plateau, while the eastern portionincludes the western foothills of the Colorado Rocky Mountains and most of the county’s 58,000 residents.Garfield County covers 2,958 square miles or 1,893,120 acres. About sixty percent of all Garfield Countylands are federally owned – 1) Bureau of Land Management, 615,973 acres, 2) U.S. Forest Service, 515,865acres and 3) Bureau of Reclamation, 2,335 acres. There are six towns and cities within Garfield County. Theyare, in order of incorporation, Glenwood Springs, Carbondale, New Castle, Rifle, Parachute and Silt. Garfield County and Incorporated MunicipalitiesGarfield County and its neighbors; Rio Blanco County to the north; Mesa County to the south; and PitkinCounty to the southeast, form an integrated economic region. Mesa, Rio Blanco and Garfield counties share acommon reliance on natural resource extraction, tourism and ranching. Rio Blanco County is the leastpopulated county in the region, but has considerable natural resource wealth and future developmentpotential. Mesa County’s Grand Junction, the largest community in the region, is a shopping, health care andservices destination for many residents of western Colorado, as well as for multiple Utah communities to thewest.Pitkin County, and the resort towns of Aspen and Snowmass Village, adjoins Garfield County on itssoutheastern boundary. During the winter, the only automobile access to these resort communities is GARFIELD COUNTY ADOPTED BUDGET 2018 9

through the communities of Glenwood Springs and Carbondale along Highway 82 and through the RoaringFork Valley. As a result, many residents who work in Pitkin County reside in Garfield County.Glenwood Springs, the largest community in Garfield County, serves as a shopping and service center for abroad regional area. Glenwood Springs garners a significant share of its retail and commercial services fromPitkin County generated demand, and also attracts business from Eagle County, which includes the towns ofEagle, Gypsum and Basalt. The City of Rifle, about 25 miles west of Glenwood Springs, has grown rapidly inrecent years, largely in association with the area’s natural gas industry. Rifle is emerging as a second Countyretail center.HistoryGarfield County was founded on February 10, 1883, eight years after Colorado statehood, and named inhonor of President James A. Garfield, who was assassinated two years before County formation.The oldest known human habitation in Garfield County was on Battlement Mesa where an Indian pit housewas discovered that dates back approximately 3,000 years. Along the Colorado River and especially along theRoaring Fork River, was the land of the Tabagauche Utes who enjoyed 7,000 square miles of prime huntingground and the healing waters of the Glenwood Hot Springs. The first white men who visited Garfield Countywere two Spanish Franciscan Friars, Silvestre Escalante and Francisco Dominguez who came to Colorado in1776. The top three nationalities that settled in Garfield County were German, Irish and English.Prospectors from Leadville had reported carbonate deposits in the area as early as 1870. Several partiesentered the territory and built Fort Defiance, 3 ½ miles east of the Vapor Caves. Another camp was made onthe Flat Tops and named Carbonate City, which later became the first county seat of Garfield County.Carbonate City is now an abandoned mining camp. In August of 1883 by resolution of the CountyCommissioners Glenwood Springs was named as the county seat. The first election was held on November 6,1883.Glenwood Springs, originally called Defiance, is at the confluence of the Roaring Fork and Colorado rivers. In1887, the Denver and Rio Grande Railroad extended tracks through Glenwood Canyon and into GlenwoodSprings, serving Aspen and surrounding mining towns and connecting Garfield County with Denver and pointseast. Railroad service remains an important economic support of the local economy.The Glenwood Hot Springs Pool was constructed in 1887 and remains a nationally recognized spa andrecreation facility. The hot springs and pool have been a major visitor attraction for over 120 years. TheWhite River National Forest, which is home to seven of the nation’s largest and most recognized ski resorts,was formally instituted in 1905 and continues to be a major force influencing the local economy and definingurbanization patterns.Garfield County, particularly the area between Rifle and Parachute, has many producing natural gas wells andlarge shale gas deposits. Emerging natural gas production technologies, coupled with rising gas prices,produced a notable energy boom between 2002 and 2009 and natural gas production continues to be amajor contributor of the Garfield County economy. GARFIELD COUNTY ADOPTED BUDGET 2018 10

Tourism has long been a staple of the Garfield County economy, including the hot springs attractions inGlenwood Springs, overnight accommodations associated with interstate 70 and a strong hunting and fishingservices industry. In recent years, the tourism industry in nearby Pitkin and Eagle counties stimulatedsignificant construction, services employment and residential housing development for second homes inGarfield County, particularly in the Carbondale and Glenwood Springs area. Over the past decade, increasingnumbers of retirees have relocated to the area for its relatively mild climate, quality of life, recreationopportunities and expansive open space.Today, the foundations of Garfield County’s economy remain very similar to the economic foundations thatshaped this area well over 100 years ago: natural resource development, agriculture, regional services andtourism. The County is notable for its concentration of population and urban development in the area’s twomajor river valleys and the counter balancing large expanses of public lands and lightly populated aridplateaus in the remainder of the county.Garfield County is a service and residential center for a diverse regional economy. As noted previously, theeastern portions of the County are economically intertwined with tourism and second home industries innearby Eagle and Pitkin counties. Rio Blanco County to the north has large gas and energy reserves but verylittle housing or support infrastructure. As a result, the Rifle area is home to many Rio Blanco County workersand could be subject to significant growth pressures if oil shale or natural gas activity expands in the future. GARFIELD COUNTY ADOPTED BUDGET 2018 11

Demographics PopulationWith 58,887 people in 2016, Garfield County is the 12th most populated county, of 64, in the state ofColorado. Generally, Garfield County has experienced a steady increase in population over the past fewdecades but with more rapid growth at 2.7% occurring between 2004 and 2009. This was largely the result ofa burgeoning natural gas extraction industry, but also due to an ongoing but slower expansion of tourism,second home development and regional services. During this period, there was a significant in-migration ofnew workers and families, which fueled housing development, retail expansion and rapid wage growth. Attimes during this period, Garfield County experienced shortages of labor and a rapidly appreciating housingmarket.In 2008, an abundance of new natural gas reserves were uncovered elsewhere around the country and thevalue of natural gas began a national decline. The national recession also cut spending on travel, tourism andsecond home development, with predictable declines in all measures of local economic activity.Due to the national and local recession, population declined slightly between 2009 and 2011 and has beenincreasing modestly since 2012 at an average rate of approximately 1%. Forecasts project that thepopulation of Garfield County will resume more rapid growth in 2017 and continue at a pace in excess of2.0% over the next 20 years. Actual and Projected Population of Garfield County 120,000100,000 96,678 80,000 60,000 88,537 49,256 40,000 80,222 71,646 63,734 56,150 58,08220,000- 2010 2015 2020 2025 2030 2035 2040 2005 Source: Colorado Department of Local Affairs State Demography OfficeGarfield County has five municipalities that stretch along the Colorado River and the interstate 70 corridorand one town, Carbondale, situated along the Roaring Fork River, whose economic fortunes are closely tiedto those of Aspen and Snowmass Village. Glenwood Springs remains the largest community in the county. Inthe period 1990 to 2010, the City of Rifle absorbed the majority share of the county’s new growth—largelybecause of Rifle’s proximity to the most active natural gas development areas. Since 2000 the largestpopulation increases have been in Silt at 75% and New Castle at 135% while the County as a whole has grown GARFIELD COUNTY ADOPTED BUDGET 2018 12

by 31%. The more affordable cost of housing and close proximity to major employers has made these twocommunities within the county a desirable place to live. Population of Cities and Towns within Garfield County Municipality Population Estimate 2016 Carbondale 6,777 Glenwood Springs 9,997 New Castle 4,753 Parachute 1,113 Rifle 9,665 Silt 3,087 Unincorp. Area 23,994 Source: Colorado Department of Local Affairs State Demography OfficeLike much of western Colorado, Garfield County has a largely Caucasian population with a significant Hispanicminority population, which grew rapidly during the mid-2000s energy and construction boom. The county’sAnglo population mirrors that of the state as a whole, but has a higher population of Hispanics and a lessthan average non-Hispanic population. Ethnic Diversity, 2016 Ethnicity or Race Percent of Population Caucasian or White 67.1% Hispanic 30.6% Other 2.3% Source: Colorado Department of Local Affairs State Demography Office IncomeSteady growth in per capita personal incomes took place until 2008 peaking at $44,490 when Garfield Countyexceeded the state. In 2009 per capita personal income for Garfield County declined by 8 percent followed bya more significant drop of 11% in 2010. Moderate but steady growth has returned to per capita income since2011. Per Capital Personal Income60,00050,00040,00030,00020,00010,000 0 2006 2008 2010 2012 2014 2016 Colorado* Garfield, CO Source: U.S. Bureau of Economic Analysis 13 GARFIELD COUNTY ADOPTED BUDGET 2018

In 2003, county median household income was slightly below the statewide average; but, by 2010, everycommunity in Garfield County, with the exception of Parachute and Glenwood Springs, reported medianhousehold income in excess of the statewide average. However, by 2013, the median household income haddropped below the state median except in Carbondale and New Castle. The median household income ofGarfield County is $62,520 in 2016 which is 2 percent higher than the state median of $61,300. Median Household Income Comparison of Colorado and Garfield County80,00070,00060,00050,00040,00030,00020,00010,000 - 2006 2008 2010 2012 2014 2016 Garfield *Colorado Source: American Community Survey, U.S. Census BureauEconomic Conditions Labor Force and EmploymentGarfield County has seen strong job growth and historically low unemployment rates over the last decade.However, with gas drilling reductions, in combination with the effects of a national economic recession andreduced area tourism and second home development, the County’s employment outlook began to changedrastically in 2008. There was a significant reduction in both jobs and the available labor force (approximately14 percent over a two year period) and the unemployment rate spiked, reaching a peak of 11.7 percent inMarch 2010. Since then there has been a steady drop in unemployment. Garfield County’s unemploymentrate at the end of 2016 was 3.6 percent, slightly higher than the State at 3.0 percent (not seasonally adjusted)and lower than the nation at 4.7 percent. GARFIELD COUNTY ADOPTED BUDGET 2018 14

Labor, Employment and Unemployment Rate40,000 12.0%35,00030,000 10.0%25,00020,000 8.0%15,00010,000 6.0% 5,000 4.0% - 2.0% 2006 2008 2010 2012 2014 0.0% Employment 2016 Labor Force Unemployment Rate Source: Colorado Department of Labor and Employment (CDLE)At the end of 2016 the average annual wage in Garfield County was $48,495, up from $47,549 in 2015 andremains consistent at 90 percent of the Colorado average. Garfield County wage ranks as the 17th highest inthe state. Industry Sector OverviewBetween 2005 and 2008, Garfield County employment experienced strong growth, increasing by 6,692 jobs,or about 7 percent per year. Since the Great Recession, the County has been steadily adding jobs byapproximately 1.2 percent per year. Total Jobs in Garfield County from 2005-2016 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 - 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Source: Colorado Department of Local AffairsDuring this same period of rapid economic expansion (2005-2008), there was a significant shift inemployment patterns. The largest increase in employment share by category occurred in the mining andnatural resources industry, which includes oil and gas production activities. It should also be noted that many GARFIELD COUNTY ADOPTED BUDGET 2018 15

natural resource extraction-related jobs occur in other employment categories, such as construction andtransportation. The local construction industry lost a significant share of county employment. The downturnin resort-related real estate construction, beginning in about 2009, had a major impact on Garfield County,which was home to a large share of contractors, fabricators and suppliers that support the second homeindustry in both Eagle and Pitkin counties. Since 2010, Garfield County has seen a rise again in theconstruction industry. At the end of 2016 the construction industry and retail trade were the 2nd and 3rdleading employers respectively. Top 10 Employers by Industry Type (NAICS): 20166,000 20155,000 20164,0003,0002,0001,000 0 Source: Colorado Department of Local Affairs Energy and Natural Resource IndustryNatural Resource development, specifically natural gas and prospectively oil shale, has had the most dramaticeconomic influence on Garfield County over the last decade. As of 2008, nearly one-third of all miningindustry employment for the State of Colorado was located in Garfield and the neighboring Mesa and RioBlanco counties. Between 2004 and 2005, Garfield County experienced a rapid increase in its share ofstatewide mining employees, which then leveled off and modestly declined between 2006 and 2009. GarfieldCounty evolved from a new exploratory play to a large gas producing county. This natural gas boom, whichspurred Garfield County’s economy in the 2000s, was driven in part by a rapid escalation in gas prices. Theindustry then slowed dramatically in 2009 as gas prices fell and operators began pulling drilling rigs to pursueemerging gas field prospects elsewhere in the U.S.Since 2009, gas prices continued to decline with a direct impact on the total natural gas and oil production inthe County. Gas prices continued to fall in 2016 hitting the lowest point since 1998 ($1.2 per Million Btu) at$1.73 per Million Btu in March 2016. Since then, prices have seen a modest uptick with the average for 2016at $2.52 and the 2017 YTD average through November at $3.00 Million Btu. GARFIELD COUNTY ADOPTED BUDGET 2018 16

$10.00 Annual Average Henry Hub Natural Gas Spot Price: Dollars per Million Btu $9.00 $8.00 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 $7.00 $6.00 $5.00 $4.00 $3.00 $2.00 $1.00 $- Source: U.S. Energy Information AdministrationBCFAnnual Natural Gas Production for Garfield County: Total Production in Million Cubic Feet (BCF) Top 5 Counties in Colorado 800 700 600 500 400 300 200 100 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 GARFIELD WELD LA PLATA MONTEZUMA LAS ANIMAS Source: Colorado Oil and Gas Conservation Commission GARFIELD COUNTY ADOPTED BUDGET 2018 17

Despite its decline, Garfield County’s energy production continues to represent a significant share of thestatewide totals. In 2016, Garfield County was the second largest natural gas producer in the State and hadthe second greatest number of active wells in the state, behind Weld County. Number of Active Wells by County: 201625,000 22,96920,00015,000 11,160 6,81610,000 3,879 3,326 2,953 2,890 5,000- Weld Garfield Yuma La Plata Las Animas Rio Blanco 36 Other Source: Colorado Oil and Gas Conservation CommissionThe average count in 2016 for active drilling rigs in Garfield County was 3, which was less than the averagenumber of rigs operating in the County in 2015. Average Annual Rig Count in Garfield County8070605040302010- 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 YTD Source: Colorado Oil and Gas Conservation CommissionIn addition to the local economy, the natural resources industry also has a significant impact on GarfieldCounty taxes and revenues. Historically, over 70% of the County’s total property tax assessed values havebeen accounted for by the oil and gas industry. In 2016 this dropped to 54% and again in 2017 to 50%. GARFIELD COUNTY ADOPTED BUDGET 2018 18

Assessed Value Distribution 2017 Vacant Land 4.4% Public Utilities 5.1% Residential 23.8% Oil and Gas Commercial 50.5% 14.8% Industrial 0.5% Natural Resources Agricultural 0.1% 0.8% Source: Garfield County AssessorTotal assessed valuation for Garfield County declined by 2% in 2017 due to additional reductions in theassessed valuation for oil and gas, which saw a 7% reduction from 2016. Residential property values had anincrease of 8 percent, while commercial had a 4 percent increase, both serving as good indicators of agrowing real estate market.For the most part, Garfield County assessed valuations closely follow the rise and the fall of the energyindustry. After a substantial drop in value between 2010 and 2011, assessed values increased in 2011 and2012 and then dropped again in 2013. Both 2014 and 2015 showed modest increases in assessed valuationswith a precipitous drop in 2016. Total Assessed Values (in Millions)$6,000$5,000$4,000$3,000$2,000$1,000$ 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Source: Garfield County Assessor Abstract GARFIELD COUNTY ADOPTED BUDGET 2018 19

The County’s top taxpayers for 2017 are directly related to the oil and gas industry.Owner Name 2017 Assessed ValueTEP ROCKY MOUNTAIN LLC 385,079,660ENCANA OIL & GAS (USA) INC 158,121,370URSA RESOURCES GROUP II LLC 71,680,060LARAMIE ENERGY LLC 48,463,880BARGATH, INC. 47,011,260CAERUS PICEANCE LLC 42,771,000VANGUARD OPERATING LLC 38,631,910PUBLIC SERVICE COMPANY OF COLORADO (XCEL) 36,249,800CHEVRON NORTH AMERICA EXPLO & PROD CO 26,769,370ENTERPRISE GAS PROCESSING LLC 25,700,930HUNTER RIDGE ENERGY SERVICES, LLC 21,862,640RED ROCK GATHERING COMPANY LLC 19,275,030UNION PACIFIC RAILROAD COMPANY RR361 17,614,000GRAND RIVER GATHERING LLC 16,662,110 Source: Garfield County Assessor Retail and TourismIn addition to the natural resources industry, retail and tourism are an important part of the Garfield Countyeconomy. The previously noted “boom” period 2005 to 2008 is evident in retail sales trends (indicated bysales tax collection), as is the sharp economic decline beginning in 2008. Though some retail recovery wasseen in 2011 and 2012 it was followed by another decrease in 2013. A modest improvement was seen in both2014 and 2015 followed by a slight decline in 2016. This decline is presumed to be correlated to thereduction of oil and gas operations within the County as areas west of Glenwood Springs were the only onesto individually experience a decline in sales tax revenues. Garfield County Gross Sales Tax Collections (before refunds)18,000,00016,000,00014,000,00012,000,00010,000,000 8,000,000 6,000,000 4,000,000 2,000,000 - 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Source: Garfield County Treasurer GARFIELD COUNTY ADOPTED BUDGET 2018 20

The location of the sales is noteworthy. As to be expected, Glenwood Springs and Rifle account for 67percent of the sales tax income. While the remaining communities and unincorporated areas make up theremaining 33 percent.County wide, Accommodation and Food Services make up nearly 20 percent of the sales tax collection (up 2%since 2015) while retail trade makes up 28 percent of sales tax collection. Wholesale trade collects 5 percentand the new marijuana industry (including liquor) has created a significant increase of revenue from taxcollection at 5.7 percent. ConstructionOne of the best indicators of construction activity is the number of building permits and the value thereof,issued by the Garfield County Community Development Department. The number of new residential homesbeing permitted has been consistently on the rise with a dramatic increase of almost 400 percent in the 5years between 2011 and 2016, however commercial permits have contracted significantly in the last twoyears, seen largely as a reflection of the contraction of the oil and gas industry. Total Building Permits: 2005-2016600 $100,000,000 $90,000,000500 $80,000,000400 $70,000,000 $60,000,000300 $50,000,000 $40,000,000200 $30,000,000100 $20,000,000 $10,000,000 0 $0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016Permits ValueResidential (new + manufacture) Permits Commercial PermitsOther Permits Buiding Permit Valuation Source: Garfield County Community Development DepartmentIn 2012, valuations showed the first increase since the peak of 2007. Valuations declined slightly again in2014 due to contraction in valuation for commercial permits, increased significantly in 2015 and droppedagain in 2016. Real EstateAs noted previously, housing values grew rapidly during the energy expansion from 2002 to 2008, concurrentwith national trends. Both activity and prices have declined from their 2008 highs but have shownimprovement since late 2011 following the Great Recession. In 2016 there was an increase of 10% in thevalue of sales and a 7% increase in the number of transactions over 2015. GARFIELD COUNTY ADOPTED BUDGET 2018 21

Single Family Home Sales and Average Price500,000 1,400450,000 1,200400,000 1,000350,000 800300,000 600250,000 400200,000 200150,000 0100,000 50,000 0 2009 2010 2011 2012 2013 2014 2015 2016 Average Price Total Units Sold Source: Garfield County Community Development Department ForeclosuresA spike in home foreclosures was one consequence of the most recent economic recession. As the housingmarket recovers, the nation and Colorado are experiencing a drop in the number of foreclosures. In 2012 thenumber of foreclosures dropped for the first time since 2007 with a significant decrease of 23 percent from ahigh of 701. Foreclosures have stabilized in 2015 and 2016 with the Public Trustee only opening 88foreclosures, thus bringing the foreclosure rate on par with pre-recession filings. In 2017 a similar level offoreclosures is expected. Foreclosure Filings: 2005-2016 800 700 600 500 400 300 200 100 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Source: Garfield County Public Trustee GARFIELD COUNTY ADOPTED BUDGET 2018 22

Operating Performance Indicators GARFIELD COUNTY ADOPTED BUDGET 2018 23

Economic Summary and Budget ForecastAs discussed above, the Garfield County economy has, for the most part, shown signs of improvement in2016 and into 2017 except for the energy sector. It is expected that this trend will continue in 2018 in mostareas of the economy with the energy sector improving. With upturns in the housing and job markets,incomes are expected to rise and with it an increase in retail and tourism and correspondingly sales taxrevenues. A decrease in 2016 assessed values in the energy sector has provided less in 2018 property taxrevenues, however the outlook for 2019 is not good either and hopefully the energy sector has bottomed outin 2016. The decline in 2015 and 2016 national natural gas prices and a corresponding drop in production inGarfield County has led to a significant decrease in property tax revenues received in 2017 and additionalrevenue reductions reflected in the 2018 budget.Despite this noteworthy drop in revenues, the County continues to experience high demand for many of itsservices, especially Road and Bridge and Human Services. With careful and prudent management andefficient use of funds and resources it is expected that the County will continue to provide quality serviceswhile maintaining operating expenditures at similar levels in 2018 and beyond. GARFIELD COUNTY ADOPTED BUDGET 2018 24

Section II – STRATEGIC PLANStrategic Plan ProcessGarfield County’s 2018 strategic plan is a straightforward, and policy-driven strategic plan. The Board ofCounty Commissioners (“BOCC”) establishes policies and priorities for the current year and beyond, as do theother county-level constitutional Elected Officials, e.g., Sheriff, Treasurer, etc. The plan was developedcontemporaneously with public budget hearings. At that time, the BOCC provided direction on short- andlong-term planning, as described in Section III – Budget Preparation and also detailed below in the BOCCPolicy Directives. Each administrative department then prepared work plans, goals, and objectives for 2018to execute the policy directives of the BOCC. During our budget hearings, all administrative departmentspresented their work plans and related budgets to the BOCC for review and discussion. The cost ofimplementing department work plans, or specific features within them, was determined by funding andassessing the benefit to County citizens and the policy priorities of the BOCC. Departments made revisionswhen directed, and the final results are documented below.The strategic planning process is dynamic and ongoing as the County adapts to changing economicconditions, seeks continual improvement in operations and service, and follows through on multiple long-term capital planning goals. GARFIELD COUNTY ADOPTED BUDGET 2018 25

Board of County Commissioners Policy DirectivesThe following is a compilation of the policy directives, strategies and priorities of the Board of CountyCommissioners (BOCC) for the calendar year 2018. The list reflects key priorities identified by the BOCCthroughout the public hearings in consideration of the 2018 Adopted Budget. These are in addition to theannual processes, initiatives, work plans, and programs currently underway and day-to-day operations andservices provided to the community. These straightforward goals are the core of a dynamic strategicplanning process, which is adaptive and will be ongoing throughout 2018.Infrastructure and Investment • Continue to execute the 10‐year Master Plan for the Garfield County Airport including the completion of a snow removal equipment facility and fog sealed runway and taxiway ramp. • Improve the County’s road and bridge system through construction, asphalt projects and utilization of the department’s maintenance capabilities with seven asphalt and two bridge/arch culvert projects scheduled in 2018. • Realize the vision of maximizing the Garfield County Fairgrounds as a year‐round events center with capital investments including a covered area for fairgrounds equipment, LED lighting for the outdoor arena, and replacement of the Fairground’s sound system. • Improve the County’s regional communications network infrastructure by installing replacement communications towers at Sunlight and Lookout Mountain. • Implement a broadband wireless improvement project for rural areas of Garfield County and consider opportunities for Middle Mile partnerships. • Further develop the County’s Landfill as an enterprise fund by advancing capital projects including the purchase of a grinder and roller; market and further develop the Landfill’s PCS Treatment Facility; and increase additional capacity for septage.Health and Human Services • Air quality monitoring workgroup to continue to collaborate with CDPHE, and monitor air quality during the Battlement Mesa PUD drilling through to its completion. • Support the aging population through Garfield County’s senior services and community health programs, and through decisions on land use, transportation, housing, economic development and health care. • Advance the Human Services regional training center for child welfare, economic security, and other services in Rifle, CO through expansion, in collaboration with CDHS and counties of northwest Colorado, of the number/types of training offerings and counties served. • Promote community health and prevent disease by providing quality services, non-profit grants, fulfilling State grants and through collaboration and partnerships. • Support local non-profits through the Human Service Commission and Garfield County Healthy Communities Coalition. • Implement the pretrial services program through the Community Corrections Department. GARFIELD COUNTY ADOPTED BUDGET 2018 26

Organizational, Core and Internal Services • Promote the County’s mission to deliver quality services to the Citizens of Garfield County through professional development opportunities to cultivate county employees and the administrative management team. • Promote a culture of safety and advance the County’s Risk Management activities. • Ensure the fiscal sustainability of County operations by maintaining a balanced budget and operating within it, and by developing long‐term financial strategies and plans to prepare for anticipated oil and gas property tax fluctuations in 2018 and beyond. • Commitment to making Garfield County the employer of choice in the region through continued engagement of employees on competitive pay and benefits; professional development and targeted training; hosting the Annual Service Awards and the annual Employee Appreciation Picnic; County Pages; intranet upgrades; and continuing to support the Garfield County Wellness Plan. • Continue to upgrade and maintain the motor pool and equipment fleet with the purchase of three tractors/dozers, two plow trucks, seven sheriff vehicles and three fleet vehicles. • Continue to maintain and upgrade IT and computer equipment including replacing network switches and data storage upgrades.Community Outreach and Transparency • Commitment to close partnerships and good communication with the cities, towns, and communities within its borders through intergovernmental agreements, joint meetings, town halls, and quarterly meetings with mayors and managers. • Increase transparency and improve community relations by providing improved Citizen access to meetings, information and services through enhanced communications, and the expansion of website‐based services including broadcasting of meetings on local access TV. • Complete and improve the updated County’s website. • Highlight County activities, decisions, proclamations, awards and events through press releases, public service announcements and other media forms. • Provide increased focus and attention on the Battlement Mesa PUD drilling activity and host the sixth annual Energy and Environment Symposium.Economic Development • Promote economic development around the Garfield County Airport to leverage opportunities such as the Center of Excellence for Advanced Technology Aerial Firefighting (Colorado Division of Fire Prevention and Control), the Upper Colorado River Interagency Fire Management Unit (UCR), the SEAT base, and general aviation activities. • Implement a wireless broadband system and consider partnership opportunities to expand Middle Mile and Last Mile broadband services in Garfield County. • Protect Garfield County and Western Slope water rights through facilitation of a semi‐annual Garfield County Water Forum, and increase Board involvement on statewide and regional water issues including the Colorado River Basin Roundtable and the Colorado River Water Conservation District. GARFIELD COUNTY ADOPTED BUDGET 2018 27

• Collaborate with the Federal, State and other county governments to lower health insurance costs in Garfield County and on the Western Slope of Colorado. • Prioritize economic development through capital projects, policies, programs and collaboration including working with AGNC on the federal Economic Development District and the State of Colorado Small Business Development Center. • Facilitate the Garfield County Economic Development Partners including business outreach and hosting the business and economic development breakfast roundtables. • Showcase the Garfield County Fair and Rodeo as a premiere event for the Western Slope with premier talent, events and carnival. • Participate in community discussions on affordable and attainable housing through policies, programs, collaboration and participation in the Roaring Fork – Colorado River Valley housing assessment. • Maximize natural resource opportunities in the Piceance Basin through active collaboration with industry, Federal, State and local governments with specific support for the development of the Jordan Cove project (LNG export facility) located at Coos Bay, OR. • Support the agriculture industry through policies, decisions and programs on land use, noxious weeds, farm-to-table programs, water policies, educational programs, partnerships and through collaboration, funding and cost sharing programs with NRCS. • Support tourism and improve the quality of life and health through building and improving trails and roads for bikes and pedestrians through capital projects, Conservation Trust Fund grants and the Rocky Mountain Youth Corp program.Federal and State Policy Agenda • Continue to research and record, for the purposes of preserving historic access to public lands, historical right of ways and County roads within Garfield County and through federal legislation bringing RS 2477 to resolution. • Advance the interests of the County through leadership and active representation in the National Association of Counties, the Western Interstate Region, Colorado Counties, Inc., Club 20, and the Associated Governments of Northwest Colorado. • Advocate the sustainability of the Federal PILT, severance tax, Federal mineral lease and SRS funding programs. • Advocate for the Anvil Points trust fund for direct distribution to northwest Colorado. • Continue to actively coordinate with the Department of Interior and BLM regarding the SEIS of the Greater Sage Grouse Resource Management Plans including a specific goal of improving the statewide Greater Sage Grouse habitat map through the efforts of AGNC and Colorado Parks and Wildlife. GARFIELD COUNTY ADOPTED BUDGET 2018 28

• Strengthen local interests and access on public lands by participating in Federal planning and environmental reviews and related processes including BLM planning rules and the BLM Northwest Colo RAC.• Develop the Garfield County Federal Lands-Policy Coordination Plan which contains designation and policies regarding multiple use, access, recreation, agriculture, wildlife and natural resources on public lands. GARFIELD COUNTY ADOPTED BUDGET 2018 29

Elected Officials Strategic PlansAssessorIn 2018, the Garfield County Assessor’s Office will have appraisers out in the field updating our records,adding in new construction, and researching recent property sales. Our administrative staff will be efficientlyprocessing the transferring and updating of property throughout the year. Everyone is working together tokeep our records current and our valuation models accurate, all in preparation for the 2019 revaluation ofevery property in Garfield County. Your assessor’s office staff does an excellent job, as demonstrated by ourhistory of a low volume appeal process that produces very few County Board of Equalization hearings orhigher level appeals. As always, we will continue to reach out to the public, maintain our commitment toeducation, value property correctly, and ensure equity among property owners for the purposes of advalorem taxation. Our workflow processes will continue to be mostly paperless, and we are even closer tocompleting the transformation of all paper documents into digital information formats. The Garfield CountyAssessor’s Office staff of 18 highly efficient FTE’s is relentlessly committed to upholding the integrity of theassessment process, and in doing so, provide the citizens of Garfield County with the most informed andrespectful customer service possible.Clerk and RecorderThe Garfield County Clerk’s Office strives to provide excellent customer service to the citizens of GarfieldCounty in the areas of real estate recording, elections, motor vehicle title registration transactions, vitalrecords, liquor licenses and as the Clerk to the BOCC. Administrative staff is implementing Laserfiche to scanagenda packets from BCCC meetings into searchable files in 2018. Both birth and death records are nowbeing processed through the Colorado Department of Health’s COVIS system providing access to any birth ordeath record filed in the State of Colorado. The DRIVES title and registration system update will roll out onAugust 6, 2018 across the state. One hundred four state and county offices, and over 1600 employees willconvert to the new web-based software on the same day. Following voter approval of a statutory change inNovember of 2016, all unaffiliated voters will be sent ballots for each participating party in the June 26, 2018Primary Election. Voters will be instructed to vote only one ballot and return that voted ballot for processing.Public demonstrations of the Dominion and Clear Ballot voting systems will be scheduled in the spring of2018.CoronerThe Garfield County Coroner’s Office will continue to serve the residents and visitors of Garfield Countythrough medicolegal death investigations. In 2018, the Coroner’s Office will be focusing on certificationthrough the American Board of Medicolegal Death Investigators as well as accreditation with theInternational Association of Coroner’s & Medical Examiners. The Coroner’s Office will continue to providetraining opportunities to staff in the areas of advanced medicolegal death investigation topics such ashomicide, suspicious death protocol, infant/child death investigations, bio hazardous death investigation andother important death investigation topics. The Coroner’s Office will continue to participate in communityevents and community outreach such as the Garfield County Suicide Prevention Coalition and Garfield CountyChild Fatality Review Team. GARFIELD COUNTY ADOPTED BUDGET 2018 30

SheriffThe Garfield County Sheriff's Office remains committed to providing the same level of excellent lawenforcement services to our community in 2018 that we have since 2003. We will diligently work with theBoard of County Commissioners to maintain those statutory services and strive to be part of the overall budgetsolution as the County enters into a more difficult financial environment. The GCSO has been fiscallyconservative during the past 15 years, spending only the funds necessary to provide the expected public safetyservices. We will continue to adhere to that philosophy while meeting the needs of our statutory requirementsas a Sheriff's Office. Our vision statement has always been, \"See the future and prepare for it today\" and wehave maintained that vision as is evidenced by our excellent fiscal track record.In 2018, capital improvements will be limited to maintaining and updating existing infrastructure and assets byfocusing on their longevity and improving the efficiency of the Sheriff's Office to better serve the public. Theimplementation of a more efficient Model Traffic Code (MDT) system is expected to save staff time andincrease efficiency for electronic tickets. Additionally, the Sheriff’s Office will be updating outdated pack setradios, which will also extend the use on hand held radios.Treasurer and Public TrusteeIn 2018, the Treasurer will continue to work as part of a team of Garfield County departments focusing onimplementation of a new Cash Receipting Policy adopted by Garfield County in 2017. Our focus, in addition tocollecting and distributing the $127 million tax roll, will be working to continue to strengthen the County’s cashmanagement practices. In 2017, the County’s income on investments increased to $1.8 million (up from $1.2million in 2016) and we will work with our Investment Advisor as well as our Investment Advisory Board tocontinue maximizing those earnings.Colorado Public Trustees, created by the State Legislature in the late 1800’s, are a separate, self-supportingoffice designed to act as a neutral third party in most real estate transactions in the State. In Garfield County,the Treasurer is also the Public Trustee. The two main responsibilities of the office are foreclosing deeds oftrust, and releasing deeds of trust. In 2017, we initiated 73 new foreclosures, sold 33 properties at foreclosuresale, and processed 3,022 releases of deeds of trust. This is the lowest number of new foreclosures filed inGarfield County since 2003. It is expected that 2018 foreclosure and release of deed of trust numbers willremain close to same as 2017. GARFIELD COUNTY ADOPTED BUDGET 2018 31

Department Work Plan HighlightsAdministrationGarfield County Administration provides quality services to the Citizens of Garfield County by implementingthe policies of the Board of County Commissioners and supporting the other countywide elected officials.Garfield County Administration is committed to:  Excellence, professionalism, and ethical conduct  Teamwork  Leadership  Prudent stewardship of public resources  Innovation  Continual improvement, and  A courteous and positive work environment.Community DevelopmentThe Community Development Department provides development services and implements County policies ina professional manner that promotes the quality of life for the citizens of Garfield County. The CommunityDevelopment Department includes the Building, Planning and Oil and Gas Divisions, along with CodeEnforcement. The Oil & Gas Division serves as an oil and gas issues liaison between Garfield Countygovernment and the citizens, energy industry, and State/Federal regulatory agencies.  Determine the success of the online permitting program launched in 2017 and expand as applicable.  Continue on‐going updates/refinements to the Land Use & Development Code with the goal of reducing ambiguities and inconsistencies, streamline reviews, and address new uses and issues in an efficient and effective manner.  Continue to support economic development efforts in the County, through staff participation in the Garfield County Economic Development Partners, AGNC and the creation of greater efficiencies in the development review process.  Begin a review and update of the Garfield County Comprehensive Plan.  Complete refinement of the FEMA Floodplain Mapping project.  Continue to identify and utilize new technologies that allow the department to serve customers more efficiently.  Continue efforts to provide greater online access to records.  Provide support to the BOCC in their efforts to increase representation and involvement in statewide and regional water issues.  Continue to provide support to the Garfield County Public Health Department on their Healthy Communities Coalition initiative, in particular, active involvement in the Built Environment Working Group.  Working with Management support efforts to promote greater coordination with the Federal Government on public land issues facing Garfield County.Oil and Gas  Continue an increased presence and engagement with the Battlement Mesa community during URSA’s ongoing development of gas reserves in the PUD. GARFIELD COUNTY ADOPTED BUDGET 2018 32

 Continue rapid response and resolution of citizen inquiries, concerns and complaints as around-the- clock as feasible.  Support BOCC and management on oil and gas topics, including Federal and State land and resource management and rulemaking processes.  Continue to foster the Energy Advisory Board success to proactively address issues and provide educational programs.  Collaborate and coordinate with other County departments and western Colorado governments on energy issues.  Lead planning and event management for the 6th annual Energy & Environment Symposium.CommunicationsThe Communications Department promotes governmental transparency through public trust and awareness,and provides support to elected officials and County staff through clear and timely communication.Community engagement is promoted through various web-based services; outreach using creative digital,video and print communications; media relations; and public information.  Implementation of a new County website, including responsive site principles and ADA accessibility standards, consistent with Web Content Accessibility Guidelines (WCAG) 2.0.  Complete an intranet upgrade for the County’s internal website.  Collaborate with elected officials and the management team to prioritize and integrate web features.  Focus on and research cost savings for County web-based portals, evaluating services and automating data delivery for improved online capabilities.  Continue secure encryption for online services and web solutions  Implement United States Computer Emergency Readiness Team best practices and integrate new security measures.  Provide audio/visual services in support of Granicus and Comcast streaming video and provide an ongoing portal for governmental transparency.  Communicate BOCC policy directives and countywide information through the delivery of press releases for public information, and digital video and print communications using plain language standards for online and media distribution.  Develop policies for County communications, social media, website standards, privacy, ad design and content standards, brand standards, logo and photograph usage, and the communications plan.  Formulate media response and manage reporter requests.  Finalize the development of a FEMA-based Joint Information Systems plan for use with the Emergency Operations Center in emergency applications and work with the Garfield County PIO Group to support other agency communications.  Take photos and videos for informational and promotional purposes, and negotiate contracts with photographers for additional County use as needed.  Continue management of and enhancement of internal communications including the County Pages newsletter development and delivery.  Support the Garfield County Fair for marketing and sponsorships.  Design annual reports, ads, brochures, booklets, newsletters, posters and print projects. GARFIELD COUNTY ADOPTED BUDGET 2018 33

Criminal Justice ServicesCriminal Justice Services, through its various programs, provides opportunities for change throughcollaborative effort, motivation, facilitation, support, assistance, and active communication while maintainingpublic safety.  Implement evidence-based practices to promote positive changes in behavior to reduce new crimes and improve public safety.  Provide an in-lieu of jail sentence for offenders through the Workender program that will allow them to continue to maintain their financial obligations.  Maintain a pre-trial program that will assess and determine risk for those offenders arrested in the 9th Judicial District.  Provide services to Colorado Department of Corrections and State Probation.  Strive to maintain successful termination rate of 80%, which is 12% higher than the State average.  Maintain an occupancy rate of 90%.Fair and EventsThe Garfield County Fair and Events Department ensures the successful promotion, production and executionof Garfield County events. The Garfield County Fair is the largest event the County has every year. Fair andRodeo exists to provide a family event reflecting the past, showcasing current accomplishments, and lookingto the future of the County’s best resources – its youth, agriculture, citizens, and communities. The Fair andEvents Department ensures the annual County Fair programming is of high quality and that programmingimproves annually.  Promote Western agricultural heritage and history of Garfield County.  Embrace all ages, persons, cultures and entities within Garfield County.  Collaborate with Fairgrounds and Facilities to purchase equipment that can be used at all events located at the Fairgrounds to reduce rental costs to the County.  Strengthen negotiations with concert talent to minimize unexpected expenditures.FinanceThe Finance Department ensures the prudent stewardship of public funds and provides quality financialmanagement and services to the citizens, elected officials and employees of Garfield County. The FinanceDepartment is committed to excellence, professionalism and ethical conduct; fiscal integrity and accuracy;continual improvement and; working together as a team in a courteous and supportive environment  Update current policies and procedures to ensure members of the department and organization have a clear direction about how to execute the County’s business.  Streamline processes that address all necessary actions but eliminate redundancies and extraneous steps, saves time, and reduces the potential for error.  Research and implement new modules in New World Systems (NWS) that create efficiencies across the entire organization.  Pursue continual improvement as a team and as individual members through training and education. Develop and implement ‘user’ trainings that will create efficiencies as users gain a better understanding of the finance processes.  Leverage the background, talents, and interests of each team member in an effort to enhance our ability to produce outstanding results that benefit our organization and those we serve. GARFIELD COUNTY ADOPTED BUDGET 2018 34

Human ResourcesThe Human Resources Department works to ensure a diverse, qualified, and highly motivated workforcefocused on effectively and efficiently delivering quality services to the citizens of Garfield County. TheGarfield County Human Resources team partners with all departments and offices of Garfield County toprovide employees with competitive compensation and benefits, as well as professional training anddevelopment opportunities, while maintaining the highest commitment to the ethical, professional, andcultural wellbeing of our workplace.  Continue to work towards Employer of Choice status.  Ongoing delivery of robust training programs focused on leadership, customer service, interpersonal, and technical skills including continuation of the GarCo Leadership Academy.  Implementation of new benefits/benefits changes including supplemental insurance offerings.  Continued review and management of total rewards package to ensure competitiveness, equity, and fiscal responsibility.  Enhancement of the County’s Wellness Program, including the implementation of a new wellness platform.  Roll out of updated Personnel Policies and Procedures Manual.Human ServicesThe Department of Human Services staff is committed to developing and providing collaborative services toassist and promote the safety, well-being and self-sufficiency of individuals and families.  Implement Federal, State, and County Human Services Programs by providing services that meet or exceed CSTAT Performance Measures and best meet the needs of Garfield County residents.  Use the most cost effective means, within the parameters of approved allocations and funding sources, to achieve defined outcomes.  Continue WIOA and Employment First Collaborations to support economic recovery for public assistance recipients.  Anticipate a continued increase in Garfield County CCCAP needs and begin to see a decline in the number of TANF caseloads.  Senior Programs CSBG expansion to paired County continues into its second year.  Senior Law Day, a new success in 2017, will be offered again this year.  Child Care Quality and Licensing to maintain a greater percentage of licensing activities funded by CDHS. Add an additional 20 hr/wk Child Care Quality position to allow for managers to spend more time engaged in system wide strategic planning efforts.  Child Welfare block grant allocation is insufficient for need due, primarily, to the increase in numbers of young children in need of foster/kinship placements and adoption. Plan for increased funding from the restricted SB 91-94 fund to ease the transition from reductions in Federal IVE funding that supports family engagement and kinship supports.  Current Child Welfare allocation will change January 1, 2018 depending on model approved by Child Welfare Allocation Committee.  Department in process of converting to Laser Fiche with plans to interface with other County departments. GARFIELD COUNTY ADOPTED BUDGET 2018 35

Information TechnologyThe Information Technology Department, which includes the County’s Geographic Information Systems,leverages the power of technology to assist County employees and provide quality services to the citizens ofGarfield County.Information Technology (IT)  Research, develop and evaluate scalable storage solutions.  Research, develop and test improved backup and recovery procedures.  Replace network switches countywide.  Develop and publish cybersecurity policies and procedures.  Complete and publish IT incident response procedures.  Prepare and implement phase two of countywide broadband plan.Geographic Information Systems (GIS)  Provide continued internal support of County mapping and application requests.  Deployment of mobile applications for County and department-specific use.  Partnering with departments on custom geospatial solutions.  In-house GIS support for the CCPD grant (Public Health - Live Well).  Application of LiDAR elevation data collected in 2016.  Partner with northwest Colorado counties on emergency operations preparedness utilizing UAV (aka drone) technology.ProcurementThe Procurement Department serves the citizens of Garfield County by advising departments and electedofficials in the efficient procurement of quality goods and services in a fair, transparent, and ethical mannerthrough a competitive and professional process.  Continual improvement and implementation of the procurement code and procurement best practices to build and maintain an open, fair, timely, and transparent procurement process and development of strategic procurement plans with departments as well as development of new internal procedures and efficiencies.  Update of Procurement Code and development of procedures.  Continue to improve the contract management function by posting all contracts to the procurement web page for easy public access.  Continue to enhance the surplus disposal process by working with departments and offices to build and maintain a system to better track County assets and theft sensitive equipment.  Development of new County contracts for construction services.  Continual community outreach to assist vendors in having the opportunity to do business with Garfield County and to make Garfield County “Business Friendly” resulting in increased competition, more responsive bids, and overall cost savings.  Further enhance the ability for County departments and offices to solicit simplified purchases online, and provide better reporting capabilities.  Continue to focus on spend analytics to better assist departments and offices in planning by offering industry trends, forecasts and historical data, as well as the purchase of a take-off software program to assist in the development of capital budgets. GARFIELD COUNTY ADOPTED BUDGET 2018 36

 Construction Contracting and Management will continue to be developed to include processes and best practices in coordination with the project management team, as well as further development of a capital plan with a more strategic approach to capital projects.Public HealthThe Public Health Department continues to promote health and prevent disease through a variety of avenuesincluding immunizations, disease investigation, consumer protection, air quality efforts, and as educators forthe Women, Infants, and Children program. While those are the most visible to the public, the departmentalso works on suicide prevention for the County, the promotion of healthy eating and active living, andcommunity engagement.  Update and present the Public Health Improvement Plan for 2017 as per statute.  Enhance local capacity for operations relative to the licensing and regulation of Retail Food Establishments, Schools, and Child Care Facilities.  Waste Tire regulation program under the Solid and Hazardous Waste Division or the CDPHE.  Maintain ambient air quality monitoring program under the advisement of the Air Quality Technical Workgroup.  Continue to monitor air quality during the remainder of Phase I of Battlement Mesa PUD drilling and completion, and participate in planning for Phase II of Battlement Mesa PUD permitting with a request for another $50,000 from the applicant to assist in air quality monitoring.  Continue to grow the Radon program throughout the County with funding from CDPHE.  Continue the Q/I process of assessment and completion to align department with Public Health Standards set forth by the Public Health Accreditation Board.  Continue funding of the mini-grants up to $40,000 annually.  Implementation of the GOCO Inspire project for 2018-2020.  Continue work with the Dental Health Alliance to provide preventative services to school age children.  Collaborate with Mountain Family Health to integrate Virtual Dentistry into the current model, and to expand over the next several years.  Continue to be the lead for the Valley Well Workplace Partnership for workplace wellness in Garfield County.  Work throughout County with stakeholders to provide trainings in “Health and the Built Environment.”  Continue to retro-fit schools with water bottle filling stations.  Grow the Cooking Matters program.Facilities and FairgroundsThe Facilities Department ensures the safety, functionality and security of all County facilities; supports allconstruction and operations at the Fairgrounds; and completes appropriate remodels in house. The GarfieldCounty Fairgrounds hosts a wide variety of events throughout the year and consists of an indoor arena,outdoor arena, 140 stalls, commercial kitchen and 3 meeting rooms/banquet halls.Facilities and Remote Communications  Continue to use Facility Dude to address all County facilities’ needs and continue to improve our ability to utilize it to its fullest. GARFIELD COUNTY ADOPTED BUDGET 2018 37

 Continue to work with CLEER to lower our energy usage in all our County buildings by examining all ways to conserve energy and retrofit buildings to meet energy conservation county-wide.  Continue to work with the BOCC to improve all facilities by implementing a program to examine all mechanical systems and develop a useful life inventory of all fixed assets and equipment.  Assist the BOCC with their planned capital improvement needs as Garfield County continues to grow into the future.  Continue to work with the BOCC and BLM to improve all our remote communication towers and shelters to meet new and changing uses in the 21st century.Fairgrounds  Revise/simplify fee structure to present to BOCC.  Update fairgrounds community input report.  Revise commercial kitchen manual.  Institute monthly safety trainings.  Revise existing policies and procedures to present to the BOCC.  Develop advertising plan to increase usage of the Fairgrounds and bring new diverse events to the community.Road and BridgeThe Road and Bridge Department provides the public with a safe and well maintained County road systemthrough use of best management practices, continual improvement and efficient operations. The departmentcontinues to improve several miles of gravel roads and prolong the life of the County asphalt roads throughtheir on-going chip seal program. Project management by project and not by district, along with biggerprojects being done in-house allows the department to do more projects for the same amount of moneywhich in turn provides a better service to the citizens of Garfield County.  CR 214 Peach Valley Road 6.1 Miles Paving  CR 229 Ukele Lane 1.4 Miles Paving  CR 245 Buford Road 4 Miles Paving  CR 326 W. Chipperfield 2 Miles Paving  CR 335 Colorado Rifle Road 3.8 Miles Paving  Oak Meadow Subdivision Paving  CR 107 Red Hill Road Chipseal  CR 150 Sweetwater Chipseal  CR 243 Main Elk Chipseal  CR 245 Buford Road Chipseal  CR 311 Divide Creek ChipsealVegetation ManagementImprove land stewardship throughout the County by developing partnerships with residents, public landmanagers, and the private sector.  Continue to minimize the impacts of noxious weeds on our agricultural lands and native habitat through cost-share programs to private land owners, cooperative partnerships with public land management agencies, and awareness/information/education programs.  Effectively manage noxious weeds on County property. GARFIELD COUNTY ADOPTED BUDGET 2018 38

 Continue to provide leadership to cooperative mosquito program that includes all six municipalities and will begin its 15th year.  Improve awareness of Youth Conservation Corps opportunities to increase local resident participation in program.  Continue to work with Federal land management agencies and municipal partners in developing 2018 project list.  Increase landowner participation in noxious weed cost-share program and tamarisk/Russian-olive program.Motor PoolThe Motor Pool Department ensures the safety and reliability of all County vehicles and is responsible fortheir repair and maintenance.  Maintenance shop 2-post lift.  Vehicle replacements based on Faster point system.Solid Waste DisposalThe West Garfield County Landfill is an important public asset and public service operated by the Board ofCounty Commissioners as a self- sustaining enterprise. The Landfill operates with best management practicesand sound business judgment, using the Solid Waste Disposal Fund prudently for its capital needs.  Review and update the Strategic Solid Waste Management Plan with focus on waste division, capital projects and future programs and operations for the next ten years.  Heating and lighting upgrades for the maintenance shop.  Relocate the scale house.  Replacement of two aerators for the septic ponds and purchase one new aerator.  Extend the life of the County’s landfill by purchasing a grinder to be used to grind up trash and reduce the amount of space it occupies. GARFIELD COUNTY ADOPTED BUDGET 2018 39

Organizational Chart GARFIELD COUNTY ADOPTED BUDGET 2018 40

Section III – BUDGET PREPARATIONAnnual Budget ProcessGarfield County prepares a budget for the forthcoming fiscal year as required by Local Government BudgetLaw of Colorado. The Finance Department Director is designated as the responsible party for preparing thebudget and submitting to the Board of County Commissioners. Preparing the budget is a lengthy process thatbegins in the second quarter and culminates in the final presentation of the budget in November of thecurrent year. The County’s budget development process provides a comprehensive and participatorymethodology for creation of a budget plan that addresses the needs of residents through effectivemanagement of County resources. The budget process provides ample opportunity for public review andcomment.First a discussion takes place with the Board of County Commissioners to review preliminary projections andestablish the approach in preparing the budget. The purpose of this discussion is for the BOCC to providedirection on short-term and long-term planning, provide guidelines for developing the budget and to definepriorities to aid in final decision-making. Budget Framework Policy DirectivesFinancial Budget Approach Goals ProcessGuidance provided during this discussion includes defining policy directives in terms of broad goals, specificprojects and staffing levels for 2018, long range objectives for 2018 and beyond. Financial strategies,contingency planning and desired reserve levels, debt issuance and management are also considered.Guidance on the preferred budget approach defines the relationship between revenues and expenditures,i.e. policy on balancing the budget, and the budget methodology used as the basis for initializing the budgetwithin the accounting system. GARFIELD COUNTY ADOPTED BUDGET 2018 41

The direction received from the BOCC is then presented to Elected Officials and Department Heads at theannual budget kick‐off meeting. At this meeting, budget managers for all County offices and departments areprovided with the forms, schedules and instructions they need to prepare their budget for the upcomingyear. The calendar for the preparation of the 2018 budget was as follows:Event/purpose Date/Deadline Responsibility2018 Budget Strategy & Direction June 13, 2017 BOCC2018 Budget Kick-Off Meeting July 19, 2017 Budget Officer2018 Base Budget Information Due August 18, 2017 Department and Office BudgetDepartment/Office Budget Reviews Sept 11-22, 2017 Managers2018 Proposed Budget Presentation October 2, 20172018 Proposed Budget Public Hearings Budget Officer, BOCC2018 Final Budget Adoption Representative, Budget Managers Budget Officer, BOCC October and early Budget Officer, BOCC, Department November 2017 and Office Budget Managers November 13, 2017 Budget OfficerDuring the County’s strategic planning process, departments and offices define their goals and objectives forthe upcoming year. These goals and objectives assist the budget managers in preparing their department oroffice budgets and are detailed in Section II – STRATEGIC PLAN. All revenue, operating and capitalexpenditure and staffing budgets are submitted to the Finance Department Head by the deadline establishedin the budget calendar (C.R.S. 29‐1‐105).This expenditure and revenue data is then compiled by fund, reviewed and modified as needed and aconsolidated preliminary countywide budget model is prepared. Various budget scenarios are thendeveloped using different revenue, expenditure and fund balance assumptions in conjunction with thebudget goals and objectives of the Board of County Commissioners.In addition to operational and personnel‐related expenses, non‐recurring expenditures must also besubmitted. Non‐recurring expenditures include specific expenses that are not recurring operatingexpenditures, but are generally one‐time purchases such as capital equipment, infrastructure or facilityprojects, or other special projects. Requests for these one‐time expenditures are submitted using a capitalexpense request worksheet. If a non‐recurring expenditure was budgeted for the current year, but the fullexpenditure has not occurred (e.g. a project was not completed this year and must be completed the nextyear), this expenditure will not automatically carry forward. It must be re‐budgeted.Once the preliminary budget numbers have been received a series of reviews takes place with each of thedepartments, County Administration and a representative from the BOCC. GARFIELD COUNTY ADOPTED BUDGET 2018 42

Financial PoliciesPurposeThe purpose of Garfield County’s financial policies are to serve as a foundation for long and shortrange planning, facilitate decision making, and provide direction to staff for handling the County’sday-to-day financial business. These policies also serve as a blueprint to achieving the fiscal stabilitynecessary to carry out the County’s mission, vision and values. Because of the broad and diversenature of the County’s offices and departments it is critical to have written, clearly defined, financialpolicies which minimize the risk of developing conflicting or inconsistent goals and objectives causingnegative impacts on the overall financial position of Garfield County. Garfield County’s financialpolicies are as follows:Auditing and Financial Reporting  An independent audit will be performed annually in accordance with State law (C.R.S. 29-1-603).  The County’s accounting system shall be maintained in conformance with Generally Accepted Accounting Principles (GAAP) established by the Governmental Accounting Standards Board (GASB) and with the goal of obtaining an unqualified opinion from the independent auditor.  The County will produce its Comprehensive Annual Financial Report (CAFR) in conformance with GAAP.Fund AccountingPursuant to GASB 34 the principal role of funds in the new financial reporting model is to demonstrate fiscalaccountability. While there are no limits to the number of individual funds a government elects to use, abasic principle of governmental accounting recommends that the entity use the smallest number ofindividual funds possible, consistent with its particular circumstances. Garfield County has 29 funds, whichare broken out into three classifications: Governmental, Proprietary and Fiduciary Funds.The general ledger is organized on the basis of these funds and the fund’s classification, and maintained inconformance with GAAP. Each fund is considered a separate accounting entity. The operations of each fundare accounted for with a separate set of self-balancing accounts that consist of assets, liabilities, fund equity,revenues and expenditures. The fund structure in the audited financial statements is different from thebudgetary fund structure since the County does not budget for Agency Funds or Asset and Liability Funds.Therefore, these funds are not included in the budget document. For the purposes of the budget there are 19funds.In accordance with GAAP, the County’s General Fund is considered a major fund. Other major funds includethe Road and Bridge Fund, Human Services Fund and Capital Expenditures Fund. If a fund is not consideredto be a major fund it is categorized as a non-major fund. Funds must be reported as major funds if they meetboth of the following criteria:  An individual governmental fund reports at least ten percent of any of the following: a) total governmental fund assets, b) total governmental fund liabilities, c) total governmental fund revenues, or d) total governmental fund expenditures.  An individual governmental fund reports at least five percent of the aggregated total for both governmental funds and enterprise funds of any one of the items for which it met the ten percent criterion.Special revenue funds are used to account for the proceeds of specific revenue sources that are legallyrestricted to expenditures for specified purposes. The County’s enterprise fund, Solid Waste Disposal Fund, is GARFIELD COUNTY ADOPTED BUDGET 2018 43

used to report the activity for which a fee is charged to external users for goods and services. The County’sinternal service fund, Motor Pool Fund, is used to report the activity that provides good and services to otherfunds and departments (functional units).Agency funds are used to report resources held by the reporting government in a purely custodial capacity,which is why they are not included in the budget process. Agency funds typically involve only the receipt,temporary investment, and remittance of fiduciary resources to individuals, private organizations, or othergovernments. Garfield County funds are listed as follows:GOVERNMENTAL FUNDS General Fund  100 – General Fund Special Revenue Funds  119 – Public Health Fund  120 – Road and Bridge Fund  121 – Human Services Fund  123 – Community Events Fund  124 – Conservation Trust Fund  125 – Emergency Reserve Fund  126 – Airport Fund  127 – Clerk & Recorder EFTF Fund  128 – Traffic Impact Fund  129 – Livestock Auction Fund  130 – Commissary Fund  133 – Retirement Fund  135 – Oil and Gas Mitigation Fund  136 – Garfield County Grant Fund  150 – Capital Expenditures Fund  187 – Traveler’s Highland PID FundPROPRIETARY FUNDS Enterprise Fund  200 – Solid Waste Disposal Fund Internal Services Fund  210 – Motor Pool FundBasis of Accounting and BudgetingThe basis for accounting for governmental funds is modified accrual. The basis for accounting for proprietaryfunds is full accrual with the exceptions of depreciation and amortization. Revenues are recognized in theaccounting period in which they become “available and measurable.”The basis for budgeting is full accrual. All operating and capital expenditures and revenue are identified in thebudgeting process because of the need for appropriation authority. GARFIELD COUNTY ADOPTED BUDGET 2018 44

Balanced Budget DefinitionAccording to C.R.S. 29-1-103 no budget adopted shall provide for expenditures in excess of availablerevenues and beginning fund balances.Amending the BudgetPer Colorado State Statute C.R.S. 29-1-110 expenditures must not exceed appropriations approved by theCommissioners. The appropriations are established by classification and function. If any increase to theadopted budget is needed, a supplemental budget and appropriation must be approved by the Board ofCounty Commissioners at a public hearing, with prior published notice of the proposed change (C.R.S. 29-1-109). Elected officials and department heads may reallocate budgets within an appropriation without theapproval of the Board of County Commissioners.A budget amendment will increase or decrease budget appropriations adopted by the Board of CountyCommissioners. Budget appropriations may be adjusted due to the following:  Appropriation Transfers – the transfer of appropriated budget from one or more spending agencies in a fund to one or more spending agencies in another fund or between spending agencies within a fund (C.R.S. 29-1-109). o Used when a unit is identified as having insufficient budget dollars while at the same time another appropriation unit is identified as having an excess budget.  Supplemental Appropriations – if, during the fiscal year, unanticipated revenues that were not assured at the time of the adoption of the budget from any source other than the local government property tax mill levy are received or if the beginning fund balance is in excess of the budgeted fund balance, the result is additional available revenues (C.R.S. 29-1-109, C.R.S. 29-1-110). o Used when a policy, law, statute, or court ruling becomes effective which mandates expenditures that were not anticipated or budgeted. o Used when an expenditure item is essential to the operation of a County office or department that was neither anticipated nor budgeted. o Used when revenue is received and designated for a particular purpose that was neither anticipated nor budgeted.  Budgetary Decreases – if revenues or expenditures are lower than anticipated in the adopted budget (C.R.S. 29-1-109). o Used when the projected revenue shortfall is large enough that it would cause a shortfall for a fund or for a program dependent upon it. o Used if a non‐recurring expenditure budgeted for the current year has been cancelled or deferred to a subsequent fiscal year and must be re-budgeted (e.g. a project was not completed this year and must be completed the next year).According to Colorado State Statute (C.R.S. 30-25-202), moneys credited to the Capital Fund shall not revertor be transferred to any other fund. Likewise, no transfers are allowed from the General Fund into the Road& Bridge Fund per State Law (C.R.S. 30-25-106), and no transfers are allowed from the Road & Bridge Fundinto the Capital Fund (C.R.S. 30-25-202 (1)).Monitoring the BudgetPerformance against budget is monitored on a regular basis. Each month the Finance department providesfinancial reports to the BOCC including review of each fund and department’s performance against budget GARFIELD COUNTY ADOPTED BUDGET 2018 45

and in-depth analysis of any significant variances. Finance works closely with department personnel to fullytrack actuals against budget throughout the year.Other Budgetary/Financial PoliciesGarfield County adheres to the following policies for the purposes of financial planning and budgetpreparation: Fund BalancesFund balance is defined as the difference between assets and liabilities. Uncommitted or unrestricted fundbalance exists only in the General Fund. A number of Garfield County fund balances and the spending fromthe funds are restricted or committed in their use as follows:Fund RestrictionPublic Health LegislativeRoad and Bridge LegislativeHuman Services LegislativeConservation Trust LegislativeEmergency Reserve LegislativeGarfield County Grants BOCC ResolutionCapital Expenditures LegislativeAirport BOCC ResolutionCommunity Events BOCC ResolutionClerk and Recorder EFTF BOCC ResolutionTraffic Impact BOCC ResolutionLivestock Auction BOCC ResolutionCommissary BOCC ResolutionRetirement BOCC ResolutionOil and Gas Mitigation BOCC ResolutionTravelers Highland PID BOCC ResolutionEach fund should maintain a fund balance at a level that will provide for a positive cash balance throughoutthe fiscal year, which will reduce the likelihood of having to enter into short-term debt to pay for currentoperating expenditures or so major unplanned occurrences will not jeopardize the financial position of theCounty.In order to meet emergency obligations, avoid interruptions in cash flow, generate interest income, andmaintain a sound bond rating, the County shall maintain an unassigned fund balance in its General Fund plusOil & Gas Mitigation Fund of one third of the County’s total General Fund expenditures. GFOA recommendedpractice is at a minimum no less than five to fifteen percent of regular General Fund operating revenues, orno less than one to two months of regular General Fund operating expenditures. Due to the volatileeconomy driven by the Oil & Gas Industry, Garfield County requires an unassigned fund balance in theGeneral Fund in excess of these recommended minimums. GARFIELD COUNTY ADOPTED BUDGET 2018 46

Fund balance may be used as appropriate (and approved by the Board of County Commissioners) undersound management practices when current revenues are not adequate to cover current expenditures.Garfield County will maintain an emergency reserve in an amount equal to at least three percent of fiscalyear spending in accordance with the provisions of Article X, Section 20 of the State Constitution (TABORAmendment). RevenuesThe County strives to maintain a diversified and stable revenue base; to the extent it has the legal authorityto do so and will pursue revenue-raising strategies which will help to reduce dependence on property andsales tax revenues. All revenue projections are realistically calculated and budgeted. Funding through grantsis encouraged as a means of financing a project or one-time expenditures. The County, however, discouragesthe use of intergovernmental grant assistance for routine, ongoing operational costs. Fees and User ChargesThe County will set its fees and user charges to recover, at a minimum, the variable costs of services in orderto reduce reliance on property and other taxes. The County charges fees and user charges when it isallowable, when a limited and specific group of beneficiaries can be identified or when it is feasible to chargebeneficiaries for services rendered. To the extent possible, fee levels are set to recover the full costs of theservices provided, unless it is deemed necessary or desirable to subsidize the service. As part of the budgetprocess, the County shall annually review the fees and user charges. All changes to the schedule of fees andcharges must be approved by the Board of County Commissioners.The capital and operating budgets of enterprise funds (i.e., Solid Waste Disposal Fund), shall not besubsidized by the General Fund and shall be supported wholly by fees and charges generated by theenterprise. Operating ExpendituresThe County will pay all current expenditures with current revenue. The County will maintain a budgetarycontrol system to ensure adherence to the budget and will make timely reports available to management,which compare actual revenues and expenditures to budgeted amounts. The County will encourage the useof technology and capital investment programs that are cost effective and will manage the growth ofoperating costs.Staffing shall not exceed the authorized level. An increase in headcount must be authorized by the BOCCeither through the budgetary process or by separate consideration and approval during the year. All wageline items are budgeted and utilized by each department and office subject to the following terms andconditions: a. No transfer shall be allowed to the extent such transfer would occur between wage line item and the operating line item of the individual departments or offices. b. All expenditures authorized by individual department heads or elected officials shall be accomplished in a manner consistent with Section III of the Personnel Policies and Procedures Manual, as set forth in resolution 2010-77; the Pay Administration Philosophy Strategy and Guidelines ; and the compensation plan approved by the BOCC and individual elected officials for the year 2018. c. All expenditures from individual department and office wage line items shall occur only if such expenditures are consistent with Section III of the Personnel Policies and as reflected in the Pay Structure and the Pay Administration Philosophy, Strategy and Guidelines. Capital ImprovementsThe County will plan for its capital needs into the future in order to address needs and to earmark revenues.Elected official offices and departments shall request items meeting the definition of capital assets throughthe annual strategic planning process. The County will strive to fund capital improvements on a pay-as-you-go basis in order to enhance its financial condition and bond rating. GARFIELD COUNTY ADOPTED BUDGET 2018 47

An asset is classified as a capital asset if it is used in operations, the cost is greater than $5,000, has a usefullife greater than one year, is new construction or an addition, or is an asset repair that will effectively changethe capacity or life of that asset by more than 25 percent. This includes both tangible (land, buildings,vehicles, machinery) and intangible assets (software, water rights, easements). Capital asset classificationapplies to individual items in a group of items, rather than to the group as a whole, unless the effect of doingso would be to eliminate a significant portion of total capital assets. These assets are tracked using theCounty’s finance and accounting software program. DebtThe registered, qualified voters of the County must approve issuance of debt. Debt will not be used to financecurrent operating expenses. Debt should only be used for the construction of capital facilities or thepurchase of capital assets. In general, the assets should not be recurring capital replacements, such asvehicles. When debt is approved by the voters, the County will make every effort to obtain the best possiblerating and to maintain a favorable rating through prudent financial management.The County will confine long-term borrowing to major capital purchases or projects that cannot be financedfrom current revenues. The County should exhaust all possible resources, such as grants and pay-as-you-gofunding, before borrowing funds. The Board of County Commissioners is authorized to execute leaseagreements on behalf of the County. Cash and InvestmentsThe BOCC authorizes the Garfield County Treasurer to invest any or all of the funds coming into thepossession of the Garfield County Treasurer’s Office in a manner which complies with applicable state lawand the Garfield County investment policy. The Garfield County investment policy establishes the delegationof authority for investment, the conflict of interest policy for investment, and designated specific eligibleinvestments, transactions and institutions for investment. These policies are identified and adopted throughthe use of various resolutions including that which adopts the budget. GARFIELD COUNTY ADOPTED BUDGET 2018 48

Financial Performance MeasuresAs part of its long-term financial planning policies the budget is prepared and analyzed using several financialperformance measures.Fund Balance to Total Expenditures RatioThis ratio measures the County’s ability to meet annual expenditures with end-of-year (EOY) fund balance. Apreferred trend of 25 percent to 45 percent will help insulate the County from unforeseen economicdownturns and provide funds for large scale purchases without the need for borrowing. The formula used isEOY Fund Balance/Total Expenditures (net of interfund transfers). As can be seen by the chart below, theCounty experiences great volatility in this ratio but stays well above the targets.160% 135% 137% 135% 131% 133% 116%140%120% 82% 74% 88% 100% 98%100% 70% 80% 60% 40% 20% 0% Actuals Target 1 (25%) Target 2 (45%)Fund Balance to General Fund Expenditures RatioAs outlined in the Long-term Financial Planning section of this document, the County maintains anunassigned fund balance in its General Fund plus its Oil and Gas Mitigation Fund of at least one third of theCounty’s total general fund expenditures. At the end of 2016 the unassigned fund balance in the GeneralFund was $41,937,097 and at the end of 2017 projected at $33,206,917. At the end of 2017 the projectedgeneral fund balance will be 62 percent of the General Fund expenditures. The fund balance in the Oil andGas Mitigation Fund is projected to be $13,187,852. These two funds are 87% of the County’s total generalfund projected expenditures for 2018.Fund Balance to General Fund Revenues RatioThe County’s financial policy guidelines also require it to maintain an unassigned fund balance in the generalfund in excess of between 5 and 15 percent of total General Fund revenues. At the beginning of 2018 theCounty’s unassigned fund balance in the General Fund is projected at approximately 73 percent of regulargeneral fund operating revenues. The General Fund has more than sufficient working capital to meet the2018 goals and objectives and provide a stable and quality level of service. GARFIELD COUNTY ADOPTED BUDGET 2018 49

Current RatioThe current ratio measures the County’s ability to pay back its short-term liabilities (debts and payables) withits short term assets (cash and receivables). Although the target for this ratio is commonly 2:1, in anenvironment where industries are cyclical as is the case in Garfield County, the goal is to maintain a highercurrent ratio. Garfield County’s current ratio at the end of 2016 was 4:1 indicating a strong position. Theprojected ratio for 2017 and 2018 will remain above 2.0.5.0 Current Ratio4.0 4.0 4.0 4.03.0 3.0 3.1 3.0 2.1 2.1 3.02.0 2.11.0- 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016Long Term Financial PlanningAs mentioned previously, the financial health of Garfield County is significantly dependent upon oil and gasactivity. Nearly 33 percent of the County’s total revenue is related to property tax, and 50 percent ofproperty tax revenue is associated with the oil and gas industry. Historically, approximately 50 percent oftotal revenue was related to property tax, and almost two thirds of property tax revenue was associated withthe oil and gas industry. Because of this, Garfield County has built up a healthy fund balance to assure stablelevels of service to Garfield County citizens, stable employment and benefits for its employees, and a strongassurance it will not need to ask the tax payers for tax increases to pay for the growing needs of the Countyduring the expected downturn in our local economy.In order to meet emergency obligations, avoid interruptions in cash flow, generate interest income, andmaintain a sound bond rating, the County has determined it will maintain an unassigned fund balance in itsGeneral Fund plus its Oil and Gas Mitigation Fund of one third of the County’s total General Fundexpenditures. Due to the volatile economy driven by the oil and gas industry, Garfield County also strives tomaintain an unassigned fund balance in the general fund in excess of between 5 and 15 percent of totalGeneral Fund revenues.The forecast beyond 2018 anticipates property tax revenues to remain flat. While natural gas prices haveincreased the production levels in Garfield County have not. This reduction in property tax revenues willlikely take place from 2018 through 2019 with a projected modest climb up in 2020 and beyond. The 2018budget was developed with this in mind by balancing operating costs. Projects and programs were revisited,re-evaluated and prioritized during the annual strategic planning process and in preparation for the budget.The County emphasizes continuous improvement of work processes to ensure that the County is providingthe best service possible at the lowest possible cost. GARFIELD COUNTY ADOPTED BUDGET 2018 50