“We tend to budget conservatively because we don’t know what those (sales tax, federal mineral lease and severance tax revenues) are going to be year to year.”
— Craig City Manager Jim Ferree about the city’s increased 2013 budget.
The Craig City Council Tuesday approved its final version of the 2013 budget, which is up across nearly all funds when compared to this year.
The general fund is increasing by six percent, or $635,705, over 2012. The city’s utility funds — water, wastewater and solid waste — also are increasing in 2013 by 48, 87 and 11 percent, respectively.
The All Crimes Enforcement Team and the medical benefits funds are the only two experiencing reductions in 2013.
But Craig City Manager Jim Ferree said it’s difficult to explain why funds are increasing next year considering the economy has not yet recovered.
“We don’t have a reason for that,” he said. “I don’t know how to quantify why we’re up this year. A lot of people think it’s because of oil and gas, but I don’t know that for sure.”
The vast majority of the city’s revenue comes from taxes and intergovernmental funds like federal mineral lease and severance tax dollars.
Through August 2012 those two streams accounted for about 93 percent of the revenue collected by the city this year.
But because tax and intergovernmental revenue is highly volatile, Ferree estimates next year’s budget increase is a result of city council’s reputation of being historically conservative at budget time.
For example, when looking at actual to actual comparisons Craig's sales tax revenue is up three percent so far in 2012 over this time last year, but up nine percent over 2012 budgeted projections.
“We tend to budget conservatively because we don’t know what those (sales tax, federal mineral lease and severance tax revenues) are going to be year to year,” Ferree said. “Everything has come in higher than expected, but we’ve been told federal mineral lease and severance tax revenue in 2013 will be half of what they were in 2012.”
Conservative budgeting not only allowed the city council to grow funds in 2013, but also provided the opportunity to give city employees across the board a three percent cost of living raise.
All told the city’s budget outlines expenses $21,142,630 in 2013.
The city also met its policy of maintaining a three-month emergency operating fund by allocating $5,939,649 to reserves.
About 15 percent of those reserve funds are restricted, including $500,000 as required by the $9 million bond issue for 2009 water treatment plant upgrades, $300,000 as mandated by the Colorado Taxpayer Bill of Rights and $92,000 in debt service for the wastewater plant, Ferree said.
City council also approved Tuesday a 10 percent water and wastewater base rate increase for both residential and commercial customers.
The additional funds will be allocated for water plant debt, capital improvements at the wastewater plant and for replacement needs to the city’s water and sewer distribution system, Ferree said.
Joe Moylan can be reached at 875-1794 or firstname.lastname@example.org