No good news in mid-year finances for Rifle
Citizen Telegram Editor
“We’d like to have better news to tell you tonight,” Rifle City Manager Matt Sturgeon told City Council members and candidates at a July 17 workshop to discuss the city’s mid-year financial review.
“Things haven’t turned around as rapidly here as they have in the resort regions around the state,” he added. “We were really hit by the [natural] gas cutbacks, especially the equipment purchases, since they’re not drilling as many wells.”
As has been the case with monthly sales tax reports since the second half of last year, Rifle’s economy has struggled. According to figures from the first five months of this year, revenues are below budget projections, and there is a possibility the city will end 2013 with revenue shortfalls in the major funds, wrote city Finance Director Charles Kelty in a summary of the review.
With the exception of the water fund, where the city took a $25.5 million loan to build the new water treatment plant, if the trend continues through the rest of the year, the city would have to use reserve funds to cover shortfalls, Kelty added.
He noted that city staff spending has been lower than last year, but since 2009, budgeted expenditures have been primarily limited to basic operations and maintenance. Nonessential expenditures have not been authorized in that time, except when projects are funded by offsetting grant revenues, so additional cuts amounting to any significant dollar amounts are “difficult to discover,” Kelty added.
The city does have a general fund contingency of $300,000, which could help if needed, he pointed out.
And Sturgeon noted the city has sufficient fund reserves to absorb several years of revenue shortfalls.
“So it’s not a dire situation,” he said.
Kelty agreed in his summary.
“Prudent financial management, as demonstrated most recently in the 2012 audit findings, leaves the city in a strong position to weather the revenue shortfalls in 2013,” he wrote.
“The real point is we really need to watch how we spend money for the rest of the year,” Sturgeon said. “There’s a chance we might have to go into our reserves, since there’s nothing to trim to make any significant cuts, without harming services to our citizens.”
Sturgeon noted the city had made personnel layoffs and left other positions vacant since 2008 and 2009.
“What we really need is a way to get more businesses to move into the city,” he added.
Kelty reviewed several key funds with the council and candidates:
• General fund revenues were nearly $2.8 million, compared to last year’s $2.9 million, or 6.9 percent less. General fund expenditures are at $3 million, compared to nearly $3.2 million last year, and 3.6 percent less.
• Parks and recreation fund revenues were just over $935,000, compared to the prior year’s $1 million, and 6.6 percent less. Fund expenditures were $911,000, versus last year’s $1 million, and 9.7 percent less.
• Water fund revenues were just under $1.5 million, last year was $855,000, or $644,000 higher. The main reason for the revenue increase is the 3/4 cent sales and use tax became effective Jan. 1, Kelty said. Those revenues were $569,000. Water fund expenses were $891,000, compared to last year’s $907,000, and 1.8 percent less.
• Wastewater fund revenues were $1 million, compared to slightly more than $1 million last year, and 5.2 percent less. Wastewater expenses were $1 million, versus last year’s slightly more than $1 million, and 13 percent less.
Kelty also noted that while city sales tax revenue has been down for some time, Garfield County’s much smaller sales tax distribution was down about 50 percent, mostly due to having to pay back past sales tax revenue that was found to be overcollected in every county in the state.
“We’re continuing to watch our budgets, and we’re not panicky,” Kelty added. “But if this trend continues, the 2014 budget will be a difficult discussion.”
“The metro areas and tourist areas of the state have seen things start to turn around,” Sturgeon said. “But other places like us, the more rural areas, have not. They’re like we are. We’ll just have to weather the storm and get through it.”
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