City council to take $1.5 million from reserves for 2017
With a small gap to close in order to maintain healthy reserves, the Craig City Council is taking a thorough look at the city’s expenses in the 2017 budget planning process.
Despite projecting to spend $1.3 million above total revenues in the general fund for 2016, the city anticipates to be about $1 million above its target reserve amount of 25 percent of the budget.
The $1 million will roll forward and contribute to the 2017 reserve’s beginning fund value of $3.4 million.
With 2017’s revenues projected at $8 million and expenditures at $9.5 million, the reserves will be tapped to make up for the $1.5 million dollar gap.
After taking out that chunk, in order to stay on target with the desired reserve number of $2.39 million for 2017, the city will have to cut $196,000 in expenses or find a revenue source to produce the funds.
The $196,000 is already down from $488,822 in mid August after unexpected revenue from two of Craig’s important income sources was announced at the beginning of September
Mineral lease funds and severances taxes were anticipated to be way down for 2016 but ended up returning $337,000 more than expected, helping to move the city toward its reserve fund goal.
Craig Finance Director and interim City Manager Bruce Nelson said expenses and revenues are temperamental and require adjustment throughout the budgeting process.
“That’s why we’re always a little conservative to make sure we have enough in the next year budget,” he said.
Craig Mayor Ray Beck said given the current economic environment Craig City Council would have to debate where to make cuts in order to balance the budget.
“It’s just given knowledge that we don’t have the activity that we had before,” he said. “We’re not seeing a lot of production and that impacts or city budget.”
Although there have been no outright layoffs, some positions have been eliminated through “attrition” over the last several years.
“We just didn’t replace them,” Nelson said, explaining how one individual would resign or retire and their position would simply not be filled.
Contact Patrick Kelly at 970-875-1795 or Contact Patrick Kelly at 970-875-1795 or pkelly@CraigDailyPress.com or follow him on Twitter @M_PKelly.Contact Patrick Kelly at 970-875-1795 or pkelly@CraigDailyPress.com or follow him on Twitter @M_PKelly.
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