Mineral lease and severance tax funds pour into Rifle | PostIndependent.com
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Mineral lease and severance tax funds pour into Rifle

RIFLE – There were a lot of smiles around Rifle City Hall on Wednesday, after learning that the city is receiving nearly $2.5 million in combined federal mineral lease and local government severance tax funds for 2008 – the largest being received by a municipality in the state for 2008.

And it’s the largest amount the city has ever received, according to Mayor Keith Lambert. That breaks the record from the city’s previous high amount of $1.67 million in combined taxes in 2004.

“This is more than any municipality received in the state,” Lambert said. “And it’s based on the amount of impacts the city of Rifle has had in the last number of years.”



Since the surprise of the 2004 severance tax refund, the amount has slowly gone down with a total of only $565,000 received in 2007.

Both Lambert and Mike Braaten, government affairs and energy coordinator for the city, were invited and traveled to Denver to a press conference held by Lt. Gov. Barbara O’Brien on Wednesday to announce the cities, counties and school districts who received funding from the unprecedented $80 millioni in energy impact fees collected in 2008 to help offset impacts from energy development in Colorado communities.



“These funds come at a critical time and will help local agencies and schools maintain quality services,” O’Brien said. “These direct distribution awards will allow local officials to decide how best to invest these funds and make the biggest difference in their communities.”

Rifle received a little more than $1.5 million in federal mineral lease funds and nearly $970,000 in severance tax – totalling $2.47 million.

For 2008, the Re-2 school district received a little more than $450,000 and District 16 more than $128,000.

Although it will ultimately be up to the Rifle City Council to determine how the tax refund money will be spent, Lambert said it could go toward a number of projects, including the development of an IT (Internet Technology) fund that would allow city departments to replace needed computer equipment and software and then pay back the money, much as it did with the car fleet fund several years ago.

“And we’re always looking to add to the capital reserves,” Lambert added.

Then there’s the option of using the money to help with the shortfall in the revenue stream during the slow economy or as seed money for a proposed shopping incentive program the city is currently exploring.

But however it’s used, the money comes as a pleasant surprise.

“We budgeted $600,000 for severance tax,” Braaten said. “This came in way ahead. We always budget very conservatively, but (2008) was a boom year.”

Braaten said the state estimates that municipalities can probably expect a 20 percent reduction in severance tax money for next year, following the tight economy.

Nevertheless, there were smiles all around Rifle City Hall when they heard the news.

“It was a bright spot in what has not been a great budget year,” Braaten said.


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