2014 Rifle city budget stays the course | PostIndependent.com

2014 Rifle city budget stays the course

Amy Hadden Marsh/Citizen Telegram
Staff Photo |

Reserve funds will continue to be used by the City of Rifle to meet projected general fund expenses in it’s 2014 recommended budget.

And sales tax revenue is projected to continue to lag behind other areas of the state and nation, leading to a stay-the-course, conservative spending plan for the coming year.

City Council has already held two workshops on the 2014 budget, presented to them at their Oct. 2 meeting. They are due to adopt the budget in December. (See calendar.)

In his memo to the council with the recommended budget, City Manager Matt Sturgeon noted that while the city’s financial condition is solid, the national economic outlook for local governments is uncertain.

“Current indications and the sluggish performance seen in our region suggests that financial analysts appear correct when saying recovery from the Great Recession will take several more years for most local governments,” Sturgeon wrote.

The general fund, at the end of 2013, is projected to have a “rainy day account” of slightly more than $4 million, or 51 percent of proposed 2014 operating expenditures, Sturgeon noted. As a rule of thumb, he added, municipalities attempt to hold in reserve between 15 to 20 percent of expenditures.

Staff positions are being reassigned in 2014, but no new positions are proposed, Sturgeon added. However, he said that affects customer service. For example, Sturgeon said the police department does not maintain regular counter hours for the general public due to the lack of personnel.

Economic challenges

Rifle’s economic outlook remains difficult to forecast, Sturgeon wrote. Resort area construction was a principle economic driver before the natural gas boom, he said, but the lackluster construction found in resort areas, combined with current levels of energy development, “leaves Rifle flat.”

Sturgeon said the recommended budget took into account the facts that sales tax revenue is coming in less than projected in 2013 and below actual 2012 returns, the city will receive 22 percent less property tax revenue in 2014 and 2015 than it received in 2013 and regional building activity remains stagnant.

Sturgeon noted the 2014 recommended budget calls for the start of work on the new $25 million water treatment plant, although Finance Director Charles Kelty said in an interview on Tuesday, Oct. 8, that projections show the three-quarters of a cent sales tax voters approved to help repay the debt service on the new plant “won’t quite cover” that amount.

“But there were user fee increases we already put in place, so I’m still confident we’ll be OK,” Kelty added.

Other projects in the recommended budget include Deerfield Park improvements and the start of operations of the New Ute Events Center.

The recommended budget projects general fund revenues of approximately $6.7 million and expenditures of $7.9 million, Sturgeon wrote. He added that the use of reserves will result in an anticipated reserve balance at the end of 2014 of $3.2 million, or 43 percent of annual operating expenditures. The proposed overall expenditures are approximately $112,000 less than what was budgeted in 2013, Sturgeon noted, after excluding projects supported by grant revenue.

Personnel expenditures

The recommended budget absorbs the city’s portion of a 10 percent increase to the city’s health insurance costs, Sturgeon wrote. This increase still keeps premiums below 2011 costs, he added, and the city’s health insurance carrier attributes five percent of the premium increase to the Affordable Health Care Act.

Since 2008, city staff has seen one increase to take home pay, in 2013, Sturgeon wrote. But,that two percent pay increase was absorbed by a payroll tax increase, he noted. Employees have received annual lump sum rewards, Sturgeon said, but the “static condition” of employee take-home pay is beginning to have an impact on morale. He recommended City Council consider offering a one-time, lump sum performance award, using a portion of the severance/federal mineral lease annual payment ($1.4 million) received this fall.

“The city, since the downturn in 2009, has found itself in the position of trying to maintain adequate service levels during a time of decreasing revenues,” Sturgeon summed up. “Next year looks no different. Efforts have been made to further reduce fund expenditures, no new staff is being recommended, and departments were asked to avoid bringing forward what might be perceived as unnecessary or extravagant budget requests.”

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