Library faces big questions in mine revaluation | SkyHiNews.com

Library faces big questions in mine revaluation

Hank Shell
hshell@skyhidailynews.com

Tuesday evening’s Grand County Library District meeting was a lot of things – somber, tense and, at times, painful to watch.

Fettered by a revenue stream crippled by depressed property values, the bitter taste of a failed 2013 attempt at a mill levy still lingering on its tongue, the district is once again contending with another massive financial setback that’s out of its control – the revaluation and eventual closure of the Henderson Mine and Mill.

The Grand County Board of Commissioners voted last month to accept a property tax revaluation of Henderson, the county’s largest tax contributor, from a five-year to a three-year average of the operation’s total production – the base metric for assessing property taxes for producing mines in Colorado.

Owner Freeport-McMoRan, the world’s largest publicly traded copper and molybdenum producer, has curtailed production at the mine by about 37 percent and says it intends to close Henderson in three to five years.

“I think we will be working with estimates for some time. If the mine does close, who knows what that will mean, so I think we will just have to work with a lot of gray area here.”Stephanie Ralph, GCLD Executive Director

Shifting the valuation to a shorter period will take a chunk out of the approximately $4.5 million in property taxes the mine disburses in Grand County.

Just how much remains to be seen, but with special districts taking the lion’s share of Henderson’s tax revenue, the greatest dramas will almost certainly play out in the county’s little-attended venues, far from the rancorous halls of government where such things are set into motion.

In the meeting room at Granby Library, Finance and Human Resources Director Tara Ingle gave a presentation on the district’s financial future assuming a 50 percent reduction in revenue from Henderson – a loss of around $106,000.

Being premised on a hypothetical, the presentation was full of conjecture and uncertainty, but its underlying message was unambiguous – money is drying up, and the board must move toward a balanced budget.

Surprisingly, things could be much worse for the district if not for a prescient move by the board in 2011 to establish an “economic stabilization fund,” a sort of short-term nest egg to usher it through hard economic times.

“It was knowing that the economy was going to be suffering, and rather than having to completely cut at that point, we pulled back a little bit, saved money and continued to put funds in there as we got them,” said President Kim Jensen.

Ingle said her models suggest the fund will have around $80,000 in 2018 and dry up completely by 2019.

“The way I’m looking at this is we are required to balance our budget by 2019 because we have no more economic stabilization money to fund our deficit,” Ingle said.

Assuming a 50 percent reduction in mine revenue, that would require cutting $450,000 from the district’s budget in 2019.

“To put that into perspective, that’s 53 percent of all the staff salaries,” Ingle said. “That’s 23 percent of our operating budget.”

Is the district too large?

Among the biggest questions facing the district going into the future, perhaps the most daunting is whether it’s too big for the population it serves.

“Can we, with the physical structure that we have currently have, provide for those facilities in this economic reality?” was how Jensen framed the dilemma.

District staff compared GCLD with other Colorado districts in terms of space and operating costs per district resident and found that, relative to other districts, GCLD is both large and expensive.

GCLD has 1.99 square-feet of space and spends $103.48 per district resident, according to figures from Executive Director Stephanie Ralph.

Among all the districts examined, Grand County is at the higher end of both metrics.

“What became very clear to us when we started pulling these figures in was that, for our population size, we were attempting the impossible, really,” Ralph said of the district’s efforts to maintain five branches.

The Delta County Library District, the most comparable district examined, has 1.25 square-feet and spends $55.17 per resident among its five branches.

“I think our statistics and the buy-in that we have from our community is exceptional,” Ralph said. “I think we are at that point now where we have to find a way to take that forward into the future in a way that’s realistic.”

options include closing branches, restructuring

Looking to the future, Ralph presented two models to illustrate, in general terms, how large of an impact certain cost cutting measures may have on the district.

The first, which involves cutting one of the district’s three smallest branches, could possibly save the district around $111,000.

The smaller branches are Hot Sulphur Springs, Grand Lake and Kremmling,

The second model assesses the effect of converting those three branches into “service outlets” – small, single-librarian operations that would offer book check-outs but little else.

That option ostensibly could save the district $100,000.

Combining both options could save the district around $200,000, Ralph said.

In addition to such expenditure-based strategies, Jensen said the board had to consider revenue-centric strategies as well, including pursuing another mill levy.

“I do feel like we should go for a mill levy, even though I don’t feel like we’re going to pass a mill levy,” said Board Secretary Roxane White, acknowledging that the mill levy process was “painful.”

White said that, if the district was unsuccessful in two successive mill levy attempts, she would suggest cutting one of the smaller branches.

Vice President Ann Douden suggested the board find out how much a mill levy campaign would cost the district. Doing so would give the district time to examine the effect of different strategies, she said.

Trustee Sally LeClair pointed to the closing of Grand Lake Elementary School as an example of how difficult closing a cherished community resource can be.

“It is gut-wrenching work,” LeClair said. “It is emotional; it is personal.”

LeClair added that she was torn about asking for a mill levy, observing that revenue from one still may not be enough to fulfill the expectations of the citizens that pass it.

Trustee Leslie Crosby, who was unable to attend the meeting, suggested in an email to the board that it could once again cut service hours.

Special districts that rely heavily on revenue from Henderson will have a more clear picture of the revaluation’s impact in May, when the Grand County Assessor’s Office releases its revaluation figures.

Still, the future is all but uncertain.

“I think we will be working with estimates for some time,” Ralph said. “If the mine does close, who knows what that will mean, so I think we will just have to work with a lot of gray area here.”

Hank Shell can be reached at 970-557-6010.


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