County considers $4-per-employee administrative fee, staff to model $6 cap and phased rollout
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Summary
Grand County commissioners instructed staff to model an administrative fee on restricted funds calculated per employee-hour, starting at $4 per hour (estimated to yield roughly $312,000) with a possible $6 cap and multi-year phase‑in; staff said a rigorous formula and auditor documentation are required.
Grand County commissioners on Dec. 8 directed staff to produce line‑item scenarios for an administrative fee charged against restricted funds, starting at $4 per employee per hour and capped at $6 during rollout, to help close a roughly $1.4 million general‑fund shortfall.
The proposal — explained by county finance staff and administrators during the budget workshop — would assess departments that draw on restricted (non‑general) funds for central administrative services. Staff presented two calculation methods: a full‑time‑equivalent hours approach (divide total hours countywide by 2,080) and a budget‑percentage approach; the two methods yielded totals within about $34,000 of each other in the staff’s examples.
Why it matters: commissioners are weighing a way to recapture a portion of expenses (attorney, HR, IT, procurement and similar central services) currently subsidized by property‑tax‑funded general fund accounts. Administration noted a rigorous, auditable formula is required: “The state auditor’s office has weighed in, and they have said that it is totally fine for general fund to offset those expenses,” a staff member said, while also saying the auditor requested a documented formula.
Staff estimates: at $4 per hour applied to the departments initially listed (sheriff, airport, library, weeds, Sand Flats and others), staff estimated gross revenue roughly $312,000 and a net improvement on the $1.4M deficit of about $167,000 after prior fees are accounted for. Staff also presented a 5‑year rollout option (50%, 65%, 80%, 95%, 100%) and said they can cap amounts for small entities.
Debate and equity concerns: commissioners pushed back on applying the fee only to a subset of departments, warning it could merely shift costs inside the general fund for departments that already receive general‑fund subsidies. One commissioner summarized the trade‑off plainly: “Either we reduce services or we increase the top line or both.” Several commissioners favored a per‑employee per‑hour approach for transparency; others asked for full mapping of restricted funds and potential unintended effects (for example, forcing general‑fund subsidies back to departments that also receive restricted revenue).
Next steps: staff (Quinn and finance team) will calculate updated totals for the $4/hour scenario with the departments shown on the screen and return with precise figures (including whether the current $1.55 existing fee was removed in prior iterations). Commissioners asked for alternate scenarios (e.g., $3, $3.50, $4, cap at $6, 5‑year phase in) to be presented at the next meeting.
The commission did not take a formal vote during the workshop; the $4/hour scenario was adopted as the working assumption to be modeled and returned for consideration.