City tightens belt as revenues fall

City tightens belt as revenues fall

November 29, 2001

By Janelle Holden
Journal Staff Writer

The Cortez City Council unanimously approved a $15.6 million budget for fiscal year 2002 on Tuesday night.

Although the council had to tighten the city’s purse strings, the budget maintains a spending status quo for the city, neither cutting programs or adding any new ones to the budget.

"All the services the citizens use are in the 2002 budget, and I think most importantly no utilities were increased," said City Manager Hal Shepherd.

The city’s total projected expenditures for 2002 total $15,618,458. Of that, the largest portion — $8,261,900, or nearly 53 percent — is for the general funds, which includes the police, parks and recreation, and public-works departments.

Other funds include $1,150,000 set aside for street improvements — down by over $150,000 from last year, and utility budgets such as water and solid waste that total over $2.4 million.

Shepherd explained on Wednesday that the city based the 2002 budget on a conservative 5.5 percent growth projection in city sales-tax revenues.

The city ended up about $200,000 short of its sales-tax projections for 2001, so city officials were extra conservative this year and did not give an across-the-board salary increase for city employees.

Revenues from the 2002 sales tax are estimated at $5,091,385, only a $200,000 increase from 2001.

Much of the city sales-tax revenues are dependent on tourism, which could likely fall below expectations for the third year in a row next summer because of the recession and the Sept. 11 tragedy.

Shepherd said if the city’s revenues don’t grow by more than 5.5 percent, next year there could be cuts in city services.

He said he is already looking to eliminate some city jobs through attrition, and a city-wide hiring freeze has already been implemented.

The city has also put aside plans to upgrade or build a new City Hall. The $500,000 set aside for the project last year was used to balance the 2002 budget and may carryover into 2003.

"I don’t see money being set aside for a city building for at least another decade," said Shepherd.

The city council has historically required that 20 percent of operating expenses be held in reserve.

The 2002 reserve funds are estimated at $1,280,078, a little below the $1,349,744 needed to meet the 20 percent requirement.

Shepherd said the reserve has been strained over the past few years by building projects, such as the library, police station, and welcome center.

City projects for 2002 include continuing work on the municipal fiber loop, a small membrane roof replacement at the city service center and some minor air-conditioning improvements at City Hall.

The airport fund suffered this year, especially since Great Lakes Aviation has not paid the city the $14,480 it owes in landing fees and building rent since March.

"I’m at a loss, really. They’ve got us in a hard place," said Russ Machen, the assistant airport manager, at Tuesday’s workshop.

Machen asked for permission to petition the Federal Aviation Administration for a new essential-air-service-carrier provider, which would cut the $400,000 federal subsidy Great Lakes gets for providing the service.

City Attorney Jim Hatter said that a lawsuit could cost the city a lot of money and not accomplish anything if Great Lakes files for bankruptcy.

"We’re subsidizing them, and the federal government is subsidizing them and they’re just sitting there smiling," said Machen.

The airport plans to close for two or more weeks next summer for runway improvements, which will also hurt projected revenues.

The city-council department fund will continue funding county economic development and tourism marketing.

The $60,000 normally earmarked for the Montezuma County Economic Development Coun-cil will be used to hire an economic-development specialist overseen by the city manager and based at the Welcome Center. MCEDC folded this fall.

The new specialist will likely be hired in January, said Shepherd, and city officials hope the specialist can help existing businesses and draw new high-tech industry to help diversify the local economy.

"What we’re trying to do is create family-level income jobs that a person can live here and raise a family here," said Shepherd.

"It’s not a quick fix."

Only one citizen commented on the budget.

Former city-council member Darlene Denison asked the board for more information on how much they spend on membership fees a year, and a breakdown of the donations given to non-profit organizations.

Denison was concerned the board would give more money to Cortez Addictions Recovery Services, which mysteriously lost $22,000 last year.

The city gave CARS $2,000 this year, a significant drop from previous years.

Denison also asked why the budget for the new rec center was not included.

Shepherd said the rec-center budget would be added after the sale of the bonds was completed this winter, but no money from the general fund will be used for the rec center.

Discussion was one of numerous agenda items the council considered on Tuesday.

In other business, the council:

Approved an ordinance allowing the city to refuse water service to any resident wanting service at a new location who had not paid a bill at an old location. "When the person is at the window and refuses to pay, we ought to be able to refuse them service," said Shepherd.
Granted a 10-year cable franchise to Charter Communications. Jim Bollinger, the assistant manager for Charter, said Charter has approved a budget for high-speed Internet service and will likely implement the service in the second fiscal quarter of 2002 at $30 to $35 per month fees.
Sent plans for a Wal-Mart fueling station back to the planning and zoning commission after the Colorado Department of Transportation expressed concern that the MIRASTAR fuel station would be too close to the intersection of Cactus and Main streets.
Postponed a public hearing on adopting the International Building Code to Jan. 22, so that city staff can consult with the MontDolores Homebuilders Association first.