As the oil and CO2 markets fizzle, so does the 2017 Montezuma County budget.
During a budget workshop Monday, county administrator Melissa Brunner reported that department budgets will need to be cut by up to 10 percent, and a hiring and wage freeze will be implemented.
“We’re looking at a possible $920,000 shortfall,” she said.
The county is a victim to the boom-and-bust nature of the oil and gas industry.
Tax revenues from Kinder Morgan’s massive CO2 production in Montezuma County contributed 50 percent of the $37 million budget in 2015.
But because of the drop in oil production in the U.S., the county is bracing for a drop in tax revenues from Kinder Morgan. Exactly how much is difficult to predict.
The CO2 market is closely tied to oil market because it is used to pressure wells to extract oil.
On Monday, commissioners said the county can’t afford the sheriff’s request for 10 additional staff in 2017, or the District Attorney’s request for one more staff.
“I don’t see how we can fund that,” said commissioner Keenan Ertel.
In 2014, the county commission lowered the mill levy for the Law Enforcement Authority from 1.45 mills to 1.20 mills to save taxpayers money.
But because of the current budget challenges, county commissioners James Lambert and Ertel considered raising the mill back up back up to its voter-authorized amount.
In 2014, before tax cut, the mill generated $870,000, and the cut reduced the mill’s revenue by an estimated $200,000. Shrinking tax revenues saw the fund drop $130,000 this year, Brunner said.
The LEA mill levy was passed by voters in 2007 and pays for five deputies, new vehicles and law enforcement services.
Further straining the budget is the more than $6 million the county is expecting to chip in toward the new courthouse.
Other expected costs for 2017 are $350,000 to remodel the county building vacated by the courts and $100,000 fix the county annex parking lot.
“We’re having to spend quite a bit of capital for the new courthouse,” Brunner said.
Once the social services office moves into the remodeled county building vacated by district court, its current building can be sold or leased to make up for the costs of the new courthouse.
Commissioners noted that the combined courthouse project was a requirement of the state.
The dozens of organizations that request assistance from the county will also face a 10 percent cut, county officials said.
“Cutting across the board is only fair,” Lambert said.