Granby in better financial position to weather COVID-19 crisis than many others
As most towns across Grand County make cuts due to the COVID-19 pandemic, Granby’s finances sit in a unique position.
While the town has pulled back spending, it’s not having to make the dramatic cuts other municipalities are facing. The reasons have to do with Granby’s debt — or lack thereof — and its reserves.
Last month, Fraser’s town board went through its capital expenditures and put some major projects on hold. In April, Grand Lake’s trustees worked to create a $350,000 cushion as coronavirus began cutting into its finances.
Granby’s staff held off hiring for a few new positions that had been previously budgeted and cut back on expenses, but the town has not had to take any dramatic action in response to the economic downfall.
When Granby’s finances were audited, Paul Backes of McMahan and Associates pointed out that Granby’s general fund for 2019 ended in the green. He outlined some math that he does with all municipalities to calculate their overall financial health.
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By dividing the ending amount of the general fund of $3.6 million into overall expenditures of $4.2 million, Granby ends up with a fund balance reserve of roughly 86%. He said this puts Granby in a solid position.
“I have a lot of municipalities that are in full on panic mode right now,” Backes told the town board in May. “Your financial position is, quite honestly, to be envied by a lot of municipalities.”
Granby’s sizable reserves are complemented by the fact the town is essentially debt free with some old long-term loans outside the general fund as the exception. The strong fiscal position is due in large part by deals brokered by the town in the past couple years.
In 2016, Granby bought the former Shorefox property for $4.38 million. The town then sold a portion of the property to Sun Communities for $5.25 million. The sale paid off the debt from the property purchase, and the remaining debt from when the Granby Town Hall building was destroyed in 2004.
With some of the remaining acreage, the town is in talks with the Colorado Headwaters Land Trust to create an easement. This would prevent the land from being developed and could make Granby another $3 million.
These favorable deals are complemented by Granby’s economy. The largest municipality in Grand County, the town isn’t quite as reliant on tourism as others in the county.
Beyond that, Granby has seen growth year after year in sales tax revenue. Sales tax through March for Granby was 28% more than the same period last year, and March’s sales tax numbers are boding well for the town. With the COVID-19 crisis hitting about halfway through the month, sales tax was still almost $40,000 more than March 2019.
The town’s sales tax revenue remains on track at 34% of budget with a third of the year elapsed. However, April sales tax will be more indicative of the impact of the shutdowns, and those numbers won’t be available until later this month.
Even with the rosy picture painted by Granby’s finances, many folks in town are feeling the hardships of the economic downturn. The town gave $50,000 to the Small Business Emergency Grant fund as a way to assist.
Just like with most things since the pandemic hit, Granby’s finances still face uncertainty. April’s sales tax will be telling once the town has a chance to go through it, but the constantly changing landscape will also play a factor on the town’s money for the rest of the year.
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