It’s fall! There’s a crispness in the air, the trees and oak brush have assumed the spectacular colors of the season.
Another harbinger of fall is that we now begin the review and approval process for next year’s city budget. Budget hearings began with the Oct. 10 council workshop and will continue until the full budget is reviewed and comes before council for final approval in late November or early December.
Though the council is just beginning the budget process, city staff members began their work on the budget back in July. Over the next two months, every department head will make a presentation at a council workshop to explain a budget request, including long-range forecasts for departmental projects. At that time, they will also provide documentation for any requested increase in city fees, i.e., water, trash, etc.
By the time the budget is finally approved, each line item will have been reviewed multiple times to ensure that expenditures are reasonable and revenues have been forecast as accurately as possible. Expenditures must balance with revenues so a conservative approach is the rule of the day – conservative in spending and conservative in forecasting revenues.
The initial phase of the budget process involves evaluating last year’s budget. Unlike the federal budget, departments are not penalized if they do not spend all of their budget in a given year. Carry-overs are encouraged, resulting in responsible spending.
Sometimes a project is not completed or is delayed, and allowing carry-over of those funds means they can be completed without shortchanging upcoming projects. Initial budget evaluation also involves taking a look at trends in the budget.
Citizen and departmental needs with regard to staffing are also evaluated. If a reduction is made, but, for whatever reason, does not work out, the position may be restored or additional staff members hired. Cortez City Manager, Shane Hale, who oversees the entire city budget, told me “We need to pay attention to pennies and nickels, as small savings in any program frees those funds for use elsewhere.”
City revenues come from a variety of sources with city sales tax, accounting for the bulk of revenues. Happily, sales tax receipts are up about 7 percent year-to-date. The plus of a sales tax as a funding source is that not only do city residents pay the tax, but anyone else making purchases in the city pays the tax as well, including tourists.
Lodgers taxes generate revenue and are up 13 percent. Fees for water and trash collection, permitting fees, and recreation center fees are a major source of funding for the departments providing these services.
Property taxes account for about $108,000, as well as franchise fees from Empire Electric and Atmos Energy. Severance taxes from mineral and oil leasing, though down from previous years, are forecast to bring in $670,000 next year.
All department heads and managers are sensitive to using taxpayer dollars wisely and they look for grants that bring in substantial sums. In recent years, one of the city’s biggest grant partners has been the Department of Local Affairs (DOLA). Cortez has received substantial grants through DOLA – $2 million for the renovation of City Hall, $1 million for fiber deployment within and along the boundaries of the city, and $150,000 on the $200,000 cost of developing a new Land Use Code. A DOLA grant is also providing $200,000 toward downtown improvements, which includes the median project. Cortez also recently received a $108,000 Great Outdoors Colorado grant to build new pickleball courts. The city will match this with $77,000 from our Conservation Trust Funds that we receive from the state lottery.
By council policy, the city is required to keep 20 percent of the budget in a reserve fund. Funding for capital projects come out of reserves paired with matching funds from grants. Capital projects include buildings, major capital projects such as the upcoming replacement of the rec center heating and cooling system.
With careful budgeting, the city was able to put $100,000 in reserves from the 2016 budget, and will return $100,000 to reserves from the 2017 budget, resulting in a healthy reserve fund balance of about $4.7 million for 2018.
Interested in learning more? Go online at cityofcortez.com and search for “The City of Cortez 2016 Annual Report and 2017 Budget in Brief.”
Karen Sheek is the mayor of Cortez. Reach her at ksheek@cityofcortez.