Rifle expects continued budget declines in 2011 | PostIndependent.com

Rifle expects continued budget declines in 2011

John Gardner
Post Independent staff
Glenwood Springs, CO Colorado

RIFLE, Colorado – The city of Rifle has begun the budget planning process for 2011, and so far, the projections for next year have city manager John Hier and city finance director Charles Kelty looking at tightening the belt for a third straight year.

“The overall view of finances indicates that the city is in a similar situation as last year. The general fund, as well as several other funds, will continue to experience an overall declines in revenue,” Hier wrote in a memo addressed to city council regarding the budget.

Hier expects a decline in 2011 of approximately $976,000, or 7 percent, from the current year’s budget. The city’s 2010 budget was $7.9 million, whereas the proposed 2011 budget is around $6.9 million.

“Our revenue sources have declined, and it started in 2009, and we made some real significant budget cuts then, of the general fund,” Hier said.

Additional budget cuts were made earlier in the year and the city implemented five mandatory furlough days for staff, was forced to eliminate three positions and even had to implement a salary freeze to make up the deficit.

The first official work session between city officials and city councilors occurred on Thursday, Oct. 7, and included a review of general fund revenues projections and a review of several of the smaller administrative department budgets.

City officials again met with city council on Oct. 12-13 in two work sessions.

To date, the city’s general fund revenues were about 5 percent below 2009 levels, through August, Hier reported. However, Hier said that the city’s conservative 2011 projected budget of around $6.9 million “should be achievable.”

“[The budget] has probably dropped back to about 2006 levels,” Hier said.

According to Hier, 2008 was an “extraordinary year,” when the city budget reached $11.5 million. Since then, the budget has been reduced to slightly more than $9.7 million for 2009.

The draft budget submitted to council includes estimated expenditures of approximately $7.3 million, which would create a budget deficit of about $443,000. Therefore, Hier noted, additional budget cuts will be necessary, or reserve funds will need to be allocated if the general fund is to be balanced.

Kelty estimates that the city will finish 2010 about 7 or 8 percent under budget for the year.

According to Kelty, an area in which the city has seen the biggest reduction in revenues is the charges for services category, which include fees collected for building permits. With the construction industry drying up throughout the region, so has the amount of revenues the city has received through building permits. The charges for services fund has declined from a peak of $946,363 in 2008 to a projected $249,992 through the end of 2010.

Kelty projected about a 9 percent reduction in 2010 compared to 2009 in the city’s main revenue source of sales and use taxes. Through July, the city was about 7 percent behind 2009 when compared to the same time period.

However, the trend may be shifting.

“We are still seeing a decline, but it appears that we may have flattened out,” Kelty said. “We are not seeing an additional decline [for] the last couple of months, which may be a good sign.”

The city will have several more budgetary work sessions with city council. The final 2011 budget has to be approved by the Dec. 15 meeting.

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