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It's not the entire reason, but retail sales from Murdoch's Ranch & Home Supply are partially why the city of Craig has enjoyed increased sales tax revenue, City of Craig Finance Director Bruce Nelson said Tuesday night at the City Council meeting.

Nelson presented the 2007 budget to the council members, and the increase in sales tax revenue was the main issue discussed from the budget.

"I think the numbers show that we're bringing more people to the community and keeping more people spending here in Craig," Nelson said on Wednesday. "When we offer more retail, it helps produce a healthier economy."

The increased revenue trend dates to August 2005 when the city experienced more than a $37,000 jump -- from $202,850.63 to $239,580.98 -- in sales tax revenue compared to August 2004. Until August, revenue comparisons of 2004 and 2005 were similar.

Since then, the revenue has continued to maintain growth.

"At about the time Murdoch's opened, we had the retrofit at the power plant and the oil and gas industry started to bring workers to the area," Nelson said. "Since then, we've maintained steady growth."

The average growth in monthly revenue for 2006 is 12.2 percent from 2005. August was the only month that revenue didn't increase, and it was just $71 less than in 2005. The increase in revenue has also produced a $138,103.94 surplus from budgeted numbers through August.

"These numbers are good because we've seen such an increase in gas and material prices," City Manager Jim Ferree said Wednesday. "It's good that we can keep up with inflation."

In the 2007 budget that Nelson presented, sales tax revenue is responsible for $4 million of the $7.9 million in the general fund.

Healthy financial numbers will allow for city employees to receive a 5 percent cost of living increase in pay in January.

Nelson said he believes the addition of Wal-Mart in 2007 will help the revenue maintain the increases.

Ferree agreed.

"Murdoch's did a study that they were doing something like $1 million in sales from our area at their Clifton store and now with them here, that has kept people local," he said. "With Wal-Mart and the other retailers that will go in that area, it will reduce sales tax leakage."

Water plant costs rise

On Tuesday night, City of Craig Public Works Director/City Engineer Bill Earley presented the City Council with the bids for the renovation of the water treatment plant.

Early said that he checked references of the lowest bidder for the job, Southwest Contracting out of Cortez, and that he had good recommendations about the company's work. The council members voted 6-0 in favor of awarding the bid to Southwest Contracting.

Initially, the city budgeted for $7 million for the construction of the new plant. After removing a couple of items from the bid, including demolition of the caretaker's house, asphalt work and a state-of-the-art ultraviolet disinfection system, the bid came to $7.765 million.

"A lot of (the increase) is due to the price increase in materials from when we budgeted to now," Ferree said.

The city will receive a $6 million loan at 3.65 percent interest over 20 years from the Colorado Resource and Power Development Authority and a $1 million grant from the Colorado Department of Local Affairs for the construction.

Earley and Ferree said they are actively looking for the additional $765,000 in funding to cover the rest.

"We're hoping to find a loan or a grant to cover the rest," Ferree said.

Earley said that the Resource and Power Development Aut-hority recently received $15 million for water-specific projects and that would be an option for additional funding.

Ferree said that when the project is complete, the new plant will increase water quality and the treatment capacity will increase from 6 million to 9 million gallons a day.

"The project should take care of our water needs for 25 years," Ferree said. "It will be nice once it's done."