The purpose of this section is to present Boulder County policies and procedures that are used to manage its financial and budgetary affairs. Most policies listed are not new but represent long standing principles that have continually guided the county and sustained its financial stability, even during downturns in the economy. The policies are reviewed annually and are amended as needed.

In compliance with the State of Colorado (C.R.S. 29-1-103(2)), Boulder County will adopt a balanced budget annually. No budget adopted shall provide for countywide expenditures in excess of available revenues and beginning fund balance.

To comply with the state statute, the Board of County Commissioners (BOCC) enacts three resolutions relative to the budget: 1) approving the budget by fund, 2) appropriating the budget, and 3) setting the county mill levy on or before December 22 (CRS 39-1-111). Any increase to the adopted budget requires that a supplemental budget request be approved by the BOCC at a public meeting or approved by the Chief Financial Officer, depending on function or materiality. A change resolution, with prior published notice of the proposed changes, is approved by the BOCC at a public meeting. The appropriations are established by function and activity. Fiscal control is maintained at the appropriation level through the county's accounting system. Elected Officials or Department Directors may reallocate budgets within an appropriation without approval from the BOCC.

The Annual Comprehensive Financial Report shows the status of the county’s finances based on “generally accepted accounting principles” (GAAP). Included in the Annual Comprehensive Financial Report are Schedules of Budgetary Compliance, which compare actual fund expenditures and revenues to budgeted amounts.

• An independent audit will be performed annually in accordance with state law.
• The county's accounting system shall be maintained in conformance with GAAP as established by the Governmental Accounting Standards Board (GASB), and with the goal of obtaining an unqualified opinion from the independent auditor. The modified accrual basis of accounting is used for all governmental fund types, while full accrual accounting is used for proprietary funds with the following exceptions: compensated absences, depreciation, and amortization.
• The county will produce annual financial reports and an Annual Comprehensive Financial Report in accordance with GAAP and the provisions contained in the GASB Statements, along with any other authoritative standards for state and local government, and as outlined in the Governmental Accounting, Auditing, and Financial Reporting (GAAFR).
• Each Department/Office will conduct a physical inventory of its capital assets annually.
• The Office of Financial Management (OFM) is responsible for enforcing the county’s fiscal accounting, auditing, and financial reporting policies.

• In compliance with Colorado state statutes (CRS 29-1-103(2)), Boulder County will adopt a balanced budget annually. This means that budgeted expenditures cannot exceed available resources in the budget year. Available resources include projected revenues available, plus the use of fund balance. The use of fund balance is allowed as a resource only if the ending fund balance target is met, and then only for use in supporting one-time expenditures.
• The county will avoid budgetary procedures that balance current expenditures at the expense of meeting future year expenses (e.g. postponing expenditures).
• The county will maintain a budgetary control system to ensure adherence to the budget and will make reports available in a timely manner for management use which compare actual revenues and expenditures to budgeted amounts.
• The county will encourage the use of technology and capital investment programs that are cost effective and will control the growth of operating costs.
• Supplemental requests for funding will be heard by the BOCC on an as needed basis.

• The county will confine long-term borrowing to capital purchases and improvements. The payback period will not exceed the useful life of the project.
• There will be no lease purchase without BOCC approval.
• Debt will not be used to fund current operating expenses.
• New bond issues must be approved by a majority of votes as required by the TABOR Amendment of the Colorado Constitution.
• Total general obligation debt may not exceed three percent of the actual value of the taxable property in the county (CRS 30-26-301).

• Minimum fund balances will provide stability and fiscal health for the county. Adequate fund balances reflect well to credit agencies to attain desirable bond ratings that will keep the cost of government borrowing low. Unassigned fund balances help to mitigate the following factors:
  • Volatility of revenues and fluctuations of expenditures
  • Significant one-time outlays and extreme events
  • Commitments and assignments for a specific purpose
• If the available fund balances fall below the minimum levels, then fund balance replenishment will become a financial management priority. It is important to replenish unrestricted fund balances in a timely manner. Sources for replenishment could include non-recurring revenues and year-end surpluses. Ongoing operating expenses shall be controlled to match the ongoing revenues and will not depend on fund balance usage for the long term. To budget a structural deficit is not consistent with a sustainable fiscal policy.
• The Office of Financial Management staff meet as required, as well as during the year end closing period, to discuss fund balance restrictions. Restrictions are used as a “tool” to separate “spendable” fund balance from equity that must be preserved for legal purposes (i.e., TABOR reserve in the General Fund), for accounting requirements such as prepayments, or for restricted revenues that need to be isolated and preserved for their intended use.
• Boulder County will maintain an emergency reserve (in the General Fund) in an amount equal to at least three percent of fiscal year spending in accordance with the provisions of Article X, Section 20 of the State Constitution (TABOR Amendment).
• Boulder County will also budget a year-end General Fund reserve of no less than twenty percent of total revenues.
• Other county funds with fund balance requirements:
  • Enterprise Funds (Internal Service and Proprietary funds), and the Disaster Recovery Fund should be budgeted at a level of 15% of regular operating revenues.
  • Capital Projects Funds should be budgeted at a level of 10% of regular operating revenues.
  • Special Revenue Funds should be budgeted at a level of 5% of regular operating revenues.
• The BOCC can adjust the minimum level of fund balances at its discretion to allow the county flexibility during a time of economic downturn, or emergency. If General Fund Reserves are depleted below the levels established by policy, the Chief Financial Officer with the Board of County Commissioners will develop a plan to restore the balances over a period of no more than 3 years with Board approval. The restoration plan should include such recommendations for rate/fee adjustments and/or expenditure reductions as may be appropriate. The plan for restoration should be reviewed and updated on an annual basis until the policy level guidelines are achieved.

• Disbursement, collection and deposit of all funds will be managed to ensure maximum cash availability for investment purposes, while meeting the county's cash flow requirements.
• The county will obtain the best possible return on all cash investments within the limits of state law, local policies and prudent investment practices.
• These investments include but are not limited to: U.S. Treasury securities; U.S. agency securities; deposits in banks, and savings and loans; repurchase agreements collateralized by authorized investments; money market mutual funds; and pooled investment trusts (CRS 24-75-601.1).

• Capital outlay items, not dollars, are approved by the Board of Commissioners during the budget process. Major changes in specifications cannot be made unless an office/department chooses to pay the added cost. All unbudgeted capital outlay items costing in excess of $10,000 must have prior approval from the BOCC, either during the budget process or during the year.
• Approved items for the General Fund are budgeted in a central budget called Capital Outlay, and not in the requesting office/department's operating budget. Cost savings revert to the fund balance at year-end.
• The capitalization threshold for financial statement reporting purposes is set at $10,000 for equipment, and increases to $50,000 for buildings, land improvements, infrastructure, and software either purchased or developed internally and with an estimated useful life of one year or more.
• Vehicle replacement:
  • It is the policy of the BOCC that the county shall operate the most reliable, sustainable, efficient, safe, and cost-effective fleet possible.
  • It is the policy of the BOCC to contain the size and cost of maintaining vehicles belonging to Boulder County and to ensure the availability of good quality county-owned on and off-road vehicles/equipment and trailers.
  • Vehicle replacement requests (with a value of $10,000 or greater, with a few internally noted exceptions) must be reviewed and approved by the Fleet Manager prior to obtaining purchasing approvals.
  • Depending on the type and age of the vehicle to be replaced, the criteria for replacement are: 1) 85,000-250,000 miles; 2) 10-16 years old; or 3) excessive maintenance costs.
  • Road Maintenance vehicles are budgeted in the Road and Bridge Fund.

• The county will maintain a diversified and stable revenue base, to the extent it has legal authority to do so, to protect it from short-term revenue shortfalls.
• The county will follow an aggressive policy of collecting revenues.
• The county will generally establish all user charges and fees, over which it has discretion, at a level related to the full cost (operating, direct, indirect, and capital) of providing the service. The county will review the charges/fees annually.
• The county will consider all revenues to be general purpose in order to provide maximum fiscal flexibility. The two exceptions are when revenue targeting is legally required, or when a revenue source has been established for the sole purpose of providing a specific program or project, as in the case of a federal or state grant, or the employee Health and Dental Benefit Plan.
• The county will aggressively pursue revenue-raising strategies, apart from the property tax.
• The county will discourage the use of intergovernmental grant assistance for ongoing operational programs. Such grant assistance may be used for special projects, provided such special project has a specified starting and ending date, and does not expand a service in such a way that additional local funds will be required to continue part or all of the service once the grant assistance is no longer available.

• The Office of Financial Management (OFM) will budget salaries at 96% of personnel costs at the departmental level and budget the remaining 4% in a pool to fund related countywide expenses.
• If personnel appropriations are forecasted to be over budget, OFM staff will work together to determine the amount eligible to be paid from the 4% pool and will use that amount from the pool to cover the cost. Examples of pool usage would include funding salaries for those departments that incur no vacancies during the current budget year as well as medical and vacation payouts for departing staff.
• All vacant positiions will be reviewed by Human Resources to verify that the job is properly classified before it is refilled. Managers will be expected to examine the need for the position before refilling.

It is the policy of the BOCC that the accounts of Boulder County be organized by funds, each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, deferred inflows and outflows, liabilities, fund equity, revenues, and expenses.

In accordance with GAAP, the county will maintain the minimum number of funds needed for sound financial administration. The county will maintain a General Fund and any other funds as prescribed by state statute or other legal requirements, as required by GAAP, or as considered necessary to ensure appropriate accounting and reporting of financial activity.

The basis of budgeting and accounting refers to the point when a transaction or related accounting event is recognized in an office/department’s budget, or in the operating statement (following GAAP).

All governmental funds (including the General, special revenue and capital projects funds) use modified accrual as both the basis of budgeting and for accounting/financial reporting. There are two exceptions to this rule: 1) the net present value of minimum lease payments is not budgeted (actual expenses to service the lease need are budgeted); 2) the government-wide financial statements, in which governmental activities are reported, uses the accrual basis of accounting.

Under the modified accrual system, revenues are recognized in the accounting period in which they become “measurable and available.” This means that the amount of the transaction can be determined and can be collected within the current period, or soon enough thereafter, to pay liabilities of the current period. The county considers all revenue available if it is collected within 60 days after year-end.

Property tax is reported as a receivable and deferred revenue when the levy is certified, and as a revenue when due for collection in the subsequent year. An allowance for estimated uncollectible taxes (1%) is included in the estimated tax needed to balance the budget. The county bills and collects its own property taxes, and the taxes for various taxing agencies. Collections and remittance of taxes for the other taxing agencies are accounted for in the Agency Fund on the Treasurer’s set of books.

GASB Statement 34 requires that accounting and financial reporting include statements reported from a “government-wide” perspective using a full accrual basis. Expenditures are generally recognized when the associated liability is incurred, except for accumulated unpaid vacation and medical pay and pre-paid expenses, which are recorded on the balance sheet and recognized in the applicable period.

The basis for accounting for proprietary funds is full accrual, where revenues are recognized when earned and expenditures when they are incurred. The basis for budgeting for proprietary funds is full accrual with the exceptions of depreciation and amortization. For capital assets and capital purchases, funds are budgeted from a perspective of the actual cash outlay required (cash basis). From the accounting/financial reporting side, these are recorded as capital assets on the balance sheet and depreciated (expensed) over the nominal useful life of the asset, which is expensed. Since depreciation is not budgeted, the budgeting controls are removed for this account only to allow the transactions to occur.

The following table shows each fund type appropriated by the county, along with the relevant basis of accounting/financial reporting, and the basis of budgeting.

Boulder County prepares a budget (calendar year) as required by Colorado Revised Statutes (C.R.S.). The county budget deadlines conform to the Local Government Budget Calendar that is created each year by the Colorado Department of Local Affairs (DOLA). Some deadlines are not statutory but reflect good budgeting practices. All statutory deadlines refer to the most current C.R.S.

Given the reliance on the General Fund for many offices and departments, the Budget Office staff met with EODH in May of 2022 to discuss long term forecasts for the General Fund and trends for county revenues. County leadership was also provided budget instructions which included budget goals for each office and department. The goals included directive to all departments to temper 2023 budget request for “new and ongoing” funding requests. This provided useful feedback mechanism to executive staff in anticipating what funding might be approved. The commissioners encouraged all offices and departments to utilize their budgets in the most effective and efficient way possible. The effort to improve government systems and create savings will be an ongoing process.

In 2022, the Budget staff worked with department and office representatives throughout the summer months to review base budgets and begin to gather information about potential increases needed. Documentation of final budget requests were collected at the end of August in preparation for public presentations.

Beginning in September, public meetings were scheduled by functional area, office, or department. This included a public meeting on capital requests since these projects and programs are cross-departmental in nature. The staff responsible for fleet replacement, facilities capital and infrastructure, and information technology made presentations to the board and to internal stakeholders, which provided an opportunity to understand expenditure requests across departments and offices.

The Human Resources Director presented the board with a memo including recommendations for a compensation package for 2023. This addressed issues such as market adjustments, range movements, and discretionary compensation increases which have direct and quantifiable impacts on the budget.

The Recommended Budget was developed through early fall and delivered by the Budget Officer to the Board of County Commissioners on October 11th, consistent with our statutory requirement to present a Recommended Budget on or before October 15th. The BOCC held a public hearing on October 25th, and in the intervening period, had budget materials available to the public. After considering public input on the 2023 Budget, the board held their annual Budget Work Session on November 10th. At that session, the board indicated which budget recommendations they would accept and what changes they wanted made to the Recommended Budget.

The Budget Office generated the Adopted Budget, including the required adopting resolutions, and provided those to the board on December 6, 2022. The final statutory date to adopt a budget in Colorado is December 15th. The Budget Office then filed the necessary documentation with the State of Colorado by January 31, 2023, as required by state statute.

Information regarding approved appropriations was forwarded to EODH. The data on the budget system was interfaced with the county's accounting system and the new 2023 budget was available for use on January 1, 2023.

Policies: Adjustments to Budget Appropriations

• It is the policy of the BOCC that budget appropriations may only be adjusted for certain reasons and according to specific criteria, which are listed below.
  • Reasons for budget appropriation adjustments:
    • Appropriations Transfers: The transfer of budgeted monies from one appropriation to a different appropriation, either within a fund or between funds.
    • Supplemental Appropriations: During the fiscal year, unanticipated and unbudgeted revenues are received from sources other than the local government property tax mill levy.
    • Contingency (Emergency Reserve) Transfers: In case of a declared emergency, the BOCC may authorize transfers from the emergency reserve in accordance with Article X, Section 20 (TABOR) of the Constitution of the State of Colorado. The reserve must be maintained at an amount equal to 3 percent of fiscal year spending.
    • Revenue Shortfalls: If actual revenues are less than budgeted revenues, the BOCC will determine how, or if appropriations are reduced.
  • Criteria for adjustment to appropriations:
    • Transfers: One appropriation unit is identified as having insufficient budget, while another appropriation unit is identified as having an excess budget.
    • Supplementals from Unanticipated Revenue or Fund Balance:
      • A policy, law, statute, or court ruling becomes effective which mandates expenditures that were not anticipated or budgeted.
      • An expenditure essential to the operation of a county office/department or an expenditure deemed to be of significant value related to county initiatives that was neither anticipated nor budgeted.
      • Revenue is received that is designated for a particular purpose that was neither anticipated nor budgeted.
    • Contingency (Emergency Reserve): The situation must be a BOCC emergency defined as:
      • Caused by an act of God.
      • Caused by a public enemy.
      • Some other catastrophic occurrence which could not have been reasonably foreseen at the time of adoption of the budget.

Procedures: Process to Amend Budget Appropriations

• The office/department requesting an adjustment must identify which of the following is the cause for request:
  • A situation that is beyond control of the organization that may result in over expenditure of budget.
  • A mandate to implement a new program or expand a current program that is not budgeted.
  • A need to replace an essential piece of equipment.
  • Has received unbudgeted revenue that is designated for a specific purpose.
• The office/department prepares an analysis of the entire appropriation to determine if there would be savings in other areas of the appropriation that could cover the anticipated expense. The request is submitted to the Budget Office on the "Request for Budget Adjustment" form.
• The Office of Financial Management (OFM) staff reviews the request to verify that it meets the criteria for adjustment, evaluates the analysis of the appropriation, and determines which authoritative figure will take action to approve/deny the request. The Chief Financial Officer (CFO) has authority to approve/deny the following budget amendments. If the budget amendment request does not fall within the list below, the OFM staff schedules the request on the BOCC Business Meeting agenda and forwards a recommendation to the BOCC and to the requesting office/department.
  • All budget system corrections or budgeting errors
  • Carry-forward of capital funds (for one year subsequent to the year of approval (i.e. adopted year plus an additional year))
  • Transfers between appropriations up to $300,000
  • Appropriation of unanticipated revenues up to $300,000
  • Use of fund balance under $300,000
• The CFO or BOCC takes action to approve/deny the request and instructs OFM staff to prepare a resolution to adjust the appropriation as indicated. If approved, changes are made in the budget system and the accounting system to enable the additional spending.
• A resolution to adjust the budgeted appropriation is prepared and advertised in compliance with the State of Colorado budget law. The OFM staff schedules the resolution on the BOCC Business Meeting agenda. The BOCC approves or denies the resolution during the meeting and the Budget Resolutions are sent to the Colorado Department of Local Affairs.

Appropriation values act as a subset of Funds within the county’s Chart of Accounts and form the basis for budgetary control (legal appropriations). Organization and Account values further delineate budgets for management tracking purposes and provide an additional level of fiscal control within the county’s General Fund. It is state law and the policy of the BOCC that no contracts may be made, or liability against the county be created by any county official or department head that would cause the legally adopted fiscal year appropriation to be exceeded. Financial system controls are in place to prevent any office/department from overspending its appropriation.

Monitoring and control of the appropriations is a shared responsibility. Elected Officials and Department Heads, their authorized representatives, and Budget staff are responsible for reviewing the budgets and expenditures on a regular basis and acting as needed.

The Office of Financial Management is responsible for monitoring revenues. Any material deviations from projected revenues are reported to the office/department involved, and to the BOCC.