The city of Cortez has produced a preliminary budget for 2019 with a beginning balance of $4.35 million, total revenues of $13.3 million and $13.7 million in expenses.
The City Council is expected to adopt the budget in December. Compared with revised, unaudited 2018 budget numbers, 2019 revenues are expected to increase by $555,000, expenses are up $193,000, and capital projects will be cut by $342,000. The city began 2018 in a better financial position compared with 2019. The 2019 beginning fund balance is $763,000 less than 2018.
In a City Council workshop on Oct. 25, City Manager John Dougherty presented council members with an unfinished and unbalanced budget. Mayor Karen Sheek said Finance Director Kathi Moss was working things out, and new financial software caused some delay.
“Just for the sake of expediency, we probably should not have had that meeting,” Sheek said. “We probably should have waited until we were closer to where we needed to be. We are at that point now. Our budget is balanced.”
At that workshop, several department heads presented their budgets and explained upcoming projects. Some asked for funding increases while other departments are making cuts. Here are some budget highlights:
General ServicesThe General Services department oversees building maintenance, fleet maintenance, purchasing and the fiber optic broadband program, called the Cortez Community Network.
The city has not budgeted any money to install fiber in 2019 and 2020.
In 2017, Cortez spent $604,000 for fiber installation. In 2018, the city initially budgeted $100,000 for fiber, but the revised number this year is $420,000. No money was allocated for fiber installation for 2019 or 2020, according to the preliminary 2019 budget.
At the October workshop, Moss urged the City Council to stop funding the fiber program because of high capital and maintenance costs and low levels of revenue from the government entities, schools and businesses that connect to the city broadband network.
Revenues have gone up and down since the network enterprise fund was created in 2011.
Total operating revenues in 2014 reached $286,000. In 2015, the city budgeted $1.3 million in expected charges for services, but the actual operating revenues came in at $267,000. In 2016, the city recorded $240,000 in operating revenues. That number dropped to $223,000 the following year. Revised numbers for 2018 show revenues are up to $284,000 this year, and Cortez expects that number to reach $293,000 in 2019.
There’s no money budgeted for fiber, but General Services has two capital projects budgeted for 2019. The city is allocating $575,000 the proposed south-side park and $75,000 for an HVAC system at the Welcome Center.
Public WorksThe Public Works Department is responsible for street repair and maintenance, water treatment and distribution, trash collection, recycling, engineering, information technology and GIS mapping.
Capital projects were cut in 2019 compared with 2018. This year, the city spent $1.15 million on downtown improvements, including the Main Street medians, $420,000 in street improvements and several other projects for a total capital expense of $1.96 million. The preliminary 2019 budget reduces that figure down to $1.6 million.
The city has budgeted $250,000 for downtown improvements in 2019, $750,000 for street improvements, $300,000 to extend Elm Street for the proposed south park.
Parks and RecreationThe yet-to-be-named community park on the south side of town is the biggest upcoming park project. Other departments and grants will help fund the project.
Parks and Recreation Director Dean Palmquist presented new cost estimates for the south at an advisory board meeting on Nov. 16. The project is expected to cost $3.75 million.
Proposed amenities include a $421,000 inclusive playground, a $250,000 skate park, $250,000 for two restrooms, $200,000 for five shelters, $324,500 for concrete walkways and a tree bosque area and $300,000 for a concrete fitness path on the perimeter of the park. Palmquist said the park will be built in three, two-year phases. The city is applying for several grants.
According to the 2019 preliminary budget, the parks division will spend about $20,000 less in capital expenses compared with 2018. In 2018, the city spent $51,000 in capital outlay for parks compared with a proposed $32,000 in 2019. Upcoming expenses include $14,000 for bleachers, picnic tables and benches.
A community garden pergola structure built this year ended up costing more than twice the original budgeted amount. The 2018 budget initially listed $2,000 for the pergola but the revised figure reached $4,600.
MarketingJon Brooks, marketing and events manager, requested a $7,000 increase in the marketing line item compared with 2018. Brooks said he wants to begin advertising the city of Cortez at the Durango-La Plata County Airport.
“Hopefully the idea is that some of our local business people will notice that and that can turn into a source of revenue,” Brooks said at the workshop.
Cortez spent $15,500 on marketing in 2017 and $24,700 in 2018. The proposed 2019 marketing budget increases that figure to $30,000.
AirportAirport Manager Russ Machen said the airport will have one assured capital expense in 2019: completing the taxiway shoulder project that began in 2013. The 2019 budget lists a capital outlay of $1.46 million for the project. The Federal Aviation Administration and the Colorado Division of Aeronautics will provide some funding.
“That’s a done deal; it’s a given; it’s going to happen,” Machen said.
An FAA budget shortfall has delayed the taxiway shoulder project, Machen said, but he expects more federal funding for two upcoming capital projects.
In March, Congress made available $1 billion to the FAA for airport improvements nationwide, primarily at small rural airports, according to the airport budget narrative. Machen stated Cortez will apply for FAA grants to resurface the runway and rehab ramp areas and the north half of the parallel taxiway.
Municipal CourtCarla Odell, court administrator and clerk, said Cortez conducts municipal court on Mondays, but recently added court hearings on Wednesdays and Thursdays. Budgeted wages in 2019, a total of $98,210, are up $2,860 compared with revised 2018 figures and up $6,725 compared with 2017. The court has three full-time employees
At the October budget workshop, Odell requested an increase in hourly wage for court-appointed attorneys. The four local attorneys currently make $65 an hour in Cortez Municipal Court, and Odell requested that increase to $75 an hour.
“We would really like to keep our local attorneys that we have,” Odell said.
Other considerationsMarijuana: Cortez raked in $897,000 in taxes from recreational marijuana sales in 2017, a figure that is expected to increase in 2018, but city officials say that level of revenue will not last forever. Dougherty, at the October workshop, said Arizona and New Mexico will likely legalize recreational pot in the next few years, which could reduce the number of people who travel to Cortez from out of state to purchase marijuana.Sheek said she wants the city to wean itself off that marijuana money by budgeting conservatively and delaying some capital projects.
“We’re not really sure how or even if that will negatively impact our revenues because once people can buy it in their own state, will they continue to come to Cortez to purchase marijuana products?” Sheek said.
Staffing: Dougherty said the Colorado minimum wage increase on Jan. 1 from $9.30 an hour to $10.20 and increasing health insurance costs hit the city hard in 2018. There were no major staff cuts this year nor across-the-board salary increases, besides minimum wage employees, but Moss said the city should evaluate staffing levels and see if all employees have enough work.“Are all of those jobs, those employees, keeping busy?” Moss said at the workshop.
She said there are opportunities for job sharing. For example, the city was considering hiring a deputy city clerk, but Moss revised the finance department so an employee could help out the clerk when needed.
“We have to make hard decisions right now, it’s not comfortable, and it’s not comfortable for me to get up here and say that, but we do,” Moss said.