State still eyeing grant funds

Energy impact dollars could be used to make up for budget shortfall

The state has the option of tapping into $27 million of Energy and Mineral Impact Assistance funds if there's a budget shortfall at the end of this fiscal year and local governments waiting for those funds won't know until July whether they'll get the money promised to them.

The Colorado Legislature passed a bill in the last days of the session allowing the governor to spend $27 million in impact assistance funds as a last resort if they're needed to balance the state's budget.

"It's everything we have or will have through the end of June," said Bill Timmermeyer, director of local government services for the Department of Local Affairs, the agency that administers Energy and Mineral Impact Assistance funds.

That leaves local communities, including the city of Craig, waiting to see whether they grants they were awarded in December will be paid.

Officials with the Colorado Department of Local Affairs are optimistic that the money will be returned.

According to Timmermeyer, economic forecasts show that the state may have to dip into its $132 million in reserves to balance its budget, but won't have to use impact assistance funds. The Legislature authorized Gov. Owens to spend state reserves first if there is a shortfall at the end of the state's fiscal year, and then dip into energy impact funds. The state's fiscal year ends June 30.

"Clearly the Legislature is trying to protect energy impact money and only use it as a very last resort," Timmermeyer said. "I know the Governor is very concerned about having to use these funds."

On June 20, the state's revenue report will be released. From then, the Governor has 10 days to move money into place to cover any anticipated shortfalls.

"We'll have a pretty good indication by the end of June whether this money is needed, but it will take some time before we know how much," Timmermeyer said. "We anticipate they'll move over more than they think they'll need."

Energy impact funds are derived from federal mineral lease revenues and energy industry severance taxes and are used to offset the impacts of those industries on local communities.

In the last year and a half, Moffat County has received $1 million in Energy Impact funds. The city has been awarded $1,085,000 in the past five years.

"I think there's anxiety and maybe even some frustration (from local governments)," Timmermeyer said. "They're quite concerned about this."

The city of Craig was awarded a $200,000 grant for water line improvements just before a freeze was placed on the funds. They budgeted a $200,000 match for that project. City officials have also applied for a $1.2 million grant for the construction of a recreation center.

City Manager Jim Ferree said he's optimistic that the money will be available.

The Department of Local Affairs is continuing on with business as usual and plans to hold hearings on April grant applications at the end of July.

Craig resident Saed Tayyara is protesting the reappropriation of energy impact funds and has spoken to Associated Governments of Northwest Colorado (AGNC) about making a formal protest.

"The creation of impact funds was to help communities impacted by energy," he said. "Look at the impact we have in Moffat County. Coal companies don't mind paying that royalty, but they'd like to see it go back to their community. Sooner or later they'll argue about paying that money if it just goes into the state general fund."

Tayyara said the state had its eye on energy impact funds in the early 80s, but backed off when threatened with a lawsuit. He's urged AGNC to consider that approach again.

"I don't think the state has a right to do that," he said. "It's nothing but highway robbery and stealing from the Western Slope.

"I have a hunch that if they get away with it, they may take it again and again. If that's the case, I'd rather see coal companies keep the money."

Christina M. Currie can be reached at 824-7031, Ext. 210 or by e-mail at ccurrie@craigdailypress.com.

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