Local officials say they’re worried about a recent decision by the state that could mean less money for rural areas where energy development is big business.

In a letter to local officials last month, Barbara Kirkmeyer, deputy director of the Department of Local Affairs, said the department would make a “significant change” to the way it doles out money to local governments.

Under existing rules, the department gives money to local governments based on the amount of energy extracted from federal mineral leases within the county of origin.

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In her letter, Kirkmeyer said that under the new rules, the department would dole out money to all counties where energy industry employees live, based on the number of employees living there.

The department made the decision based on a recent attorney general’s opinion regarding mineral lease funds.

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The changes will affect only the department’s “third-tier” mineral-leasing funds.

Last year, the department gave out about $2.7 million in third-tier funds. It gave $88.2 million in mineral-leasing funds.

Last year, the city of Craig received $502,000 in third-tier money, and Moffat County received $117,000.

Moffat County commissioners met with Kirkmeyer about the possible changes earlier this week.

The department has decided to form a task force to look at the changes rather than implement them immediately, Commissioner Darryl Steele said.

Commissioners are concerned about what the changes mean for the county, Steele said.

But the changes could have a more harmful effect on the city of Craig, Steele said.

“There is a possibility that the city of Craig particularly could lose quite a bit of money in this,” Steele said.

Craig city manager Jim Ferree said the city is concerned about the change, but doesn’t yet know what it will mean.

“It’s still kind of up in the air what the impact will be,” Ferree said.

Ferree said that in a worst-case scenario, the changes could mean the city receives $261,000 next year, a loss of $240,000 from 2005.

The Associated Governments of Northwest Colorado is particularly concerned about the changes, said Jim Evans, association director.

Evans said county of origin should be the standard because local governments bear the brunt of the costs associated with energy development — such as law enforcement, road construction and health care.

The changes will mean less money for Northwest Colorado and more for densely populated counties, Evans said.

Although the changes will directly affect only the third-tier money, Evans is concerned the new formula could affect all mineral-leasing money.

“It also could be expanded further,” Evans said.

But the Department of Local Affairs insists the new rules will not apply to anything but the third-tier money.

Charlie Unseld, a department official, said the idea that the department wanted to change the way all the money is distributed amounts to “fear mongering.”

When the task force meets to discuss the changes later this month, Unseld said it would look at only the third-tier money.

Brandon Johansson can be reached at 824-7031, ext. 213, or bjohansson@craigdailypress.com.