Ouray County budget presenters warn of roughly $1 million shortfall; commissioners set follow-up work sessions

Kara, the county budget lead, told the Ouray County Board of County Commissioners on Sept. 16 that preliminary 2026 requests exceed expected revenues and that the county is facing a material shortfall.

Kara said, “So we're short about a million,” and walked commissioners through assumptions used in the draft — including a 3.94% increase in property tax revenue, a 7% sales-tax projection carried forward from year-to-date receipts and a proposed 2.5% cost-of-living adjustment for employees. She noted several major revenue lines remain uncertain, including PILT, HUTF and multiple grant programs. The presentation includes a fund-by-fund summary that shows the general fund balance declining from roughly $3.1 million at the start of 2025 to about $2.1 million at the start of 2026 in the draft projections.

The shortfall reflects higher personnel and operating requests carried forward from recent years and a decline or uncertainty in grant and external revenues. Kara told the board that across all funds the draft shows about a 2.89% growth in expenditures versus a modest change in revenues and that “we usually have more requests than revenues every year.”

Commissioners pressed staff for clarity on transfers and cost allocation. One commissioner asked that any presentation of transfers clearly state the source and destination fund; Kara responded that fund-balance transfers are from one fund’s balance straight into the receiving operating fund and agreed to add clearer graphics. Commissioners also discussed whether to apply a full cost-allocation charge to operating funds and the practical options: calculate-and-transfer the full amount, do a partial transfer, or not apply the allocation. Kara explained the county’s current practice is to calculate two versions of the allocation (one excluding board time and one with it) and that historically the county has not applied the “full” allocation that would include board time.

Commissioners set a schedule to continue work on the budget. Kara proposed additional budget work sessions and the board agreed to hold another pre-notice session to refine the numbers; commissioners asked department heads and elected officials to submit any refinements by 8 a.m. Monday, Sept. 22 so Kara can package an updated packet for the Sept. 29 work session.

The presentation did not include any formal votes. The board and staff emphasized this meeting was in presentation mode, intended to narrow issues for later decision-making and public notice. Next steps are additional work sessions through October and November followed by the regular December meeting where the board typically adopts the final budget and resolutions.

Kara and commissioners also flagged several contingencies that will influence the final budget: state-level reductions to public-health allocations and uncertain federal grant flows, the timing and extent of vehicle lease and upfit payments, and department-level position requests that have not yet been finalized.