Wellington budget remains near $22 million as property values drop

The Wellington Town Board has approved a budget of $22.193 million for calendar year 2012, approximately $40,000 less than the 2011 budget, despite a precipitous drop in the value of taxable property in town.

“The proposed budget will continue most services at current levels,” Town Administrator Larry Lorentzen wrote in his budget message to the board. “Some expenditures, such as capital, were budgeted at notably lowered levels due to current and anticipated general economic conditions.”

Estimated town revenues for 2012 are $28.328 million, slightly higher than the $26.575 million anticipated in the 2011 budget. However, when infrastructure dedications — accounting for construction of physical assets by private developers — and previous fund balances are subtracted, actual revenues for 2012 are projected at $4.88 million, according to Lorentzen.

“This condition occurred due to a $5,788,400 decrease in the County Assessor’s assessed valuation for the town,” Lorentzen wrote. “This would be the largest assessed value reduction in recent history, and likely in the history of Wellington.”

The Larimer County Assessor has certified the value of property in Wellington at $48.129 million for 2011, an 11 percent drop from the 2009 reappraisal. The county reassesses all property in every odd numbered year.

Almost all of the drop in values in Wellington — more than $4.8 million — can be attributed to vacant land, explained Ron Kerr, chief deputy assessor for Larimer County.

“County-wide, the value of vacant land dropped 22 percent,” he said. “With the banks still not lending, owners can’t do anything with their land, so it’s pretty much a dead investment right now.”

Other portions of northern Larimer County with lots of vacant lots, such as Crystal Lakes and Red Feather Lakes, also saw large drops in valuation this time around, Kerr said. Overall, property throughout the county saw a decline in valuation of about 2 percent, reflected in the budget approved by the county commissioners in December.

Kerr added that the 2011 reappraisal was based on sales for the 24 months ending with June 2010. The 2009 valuation — which resulted in a $183,950 decrease in Wellington — used figures from 2008, when the foreclosure crisis hit Northern Colorado and the biggest loser was residential real estate.

Any transactions from two large property auctions — one in December 2010 of land in Wellington owned by Delmer Zweygardt and one in March of 32 parcels owned by developer Martin Lind and scattered about the county — won’t show up until the next revaluation in 2013. The results of both were considerably less than the sellers had hoped for, however. The Wellington auction brought in only about $5.4 million after the sale of the Main Street Market failed to close, while Lind realized about $10 million — approximately 10 cents on the dollar of estimated value.

“We do anticipate seeing more of a drop, especially in commercial and vacant land, especially if sales remain lower for the next six months or so,” Kerr said.

While lower assessments mean lower tax bills for individuals, they also mean less money for local governments. Wellington’s 2012 general operating budget is $1.591 million, down from $1.826 million in 2011. For the third year in a row, town employees will not be receiving raises, but the amount the town contributes to employee benefits will increase, to $488 per employee per moth from $415, according to Finance Director Mike Cummins.

The biggest change to the town’s budget is a transfer of sales and use taxes from the street fund to the park fund, a change approved by Wellington voters in the November election. As a result, the park budget increased from $4.223 million in 2011 to $4.316 million for 2012, with no transfers from the general fund. Since 2009, the park fund had received between $193,000 and $285,500 annually from the general fund.

The street fund also increased as the result of a $190,000 grant from the Colorado Department of Transportation to build a pedestrian underpass at Interstate 25 near East County Road 60. That project is expected to be completed by 2013.

The biggest fund in the budget — water — increased by about $30,000, mostly to continue the project on the Third Street water line across Cleveland Avenue. Work, which had originally been budgeted for completion this fall but ran into unanticipated complications, has been shut down for the winter but should be finished sometime in 2012, Cummins said.

The sewer and storm drainage funds both decreased in the 2012 budget.

The total mill levy in Wellington remains unchanged from the 14.24 mills adopted by the board for 2011. However, the amount dedicated to meeting debt obligations has risen for the second year in a row, as a result of the lower assessed valuations.