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Carbondale town budget looking good despite one bummer

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By John Colson

Sopris Sun Staff Writer

As Carbondale officials took their first steps this week into deliberations about the 2016 municipal budget, one bit of bad news greeted them from the outset — revenues from the state’s mineral severance tax fund plummeted this year, meaning Carbondale will have far less next year than it has received from state energy impact funds in the past.

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But the Board of Trustees, at its meeting Tuesday, also got some good news — sales tax proceeds have continued to rise, property tax revenues are expected to be up by about 26 percent, and the town’s general-fund reserve cash balance should be nearly $5 million at the end of this year.

The general fund, which accounts for most of the town’s operating revenues and expenses, is expected to have a year-end balance of just over $4.9 million, according to a presentation by Finance Director Renae Gustine.

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In addition, the town’s other big funds — water and wastewater, dedicated to the town’s water and sewer service costs — have a combined total of about $6.5 million, according to a chart provided by Gustine.

“We’re in good shape, as far as the year-end balance,” Town Manager Jay Harrington told the trustees.

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But, he said, because of the expected shortfall in the severance tax payment, the town should not plan to do any major capital projects next year.

With all funds combined, the town expects to have approximately $13.8 million on hand at the end of the year.

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In 2015, according to Gustine’s chart, the town started with a balance of about $14.4 million in all funds, took in approximately $15.5 million in revenues for a total of just over $30 million in available funds.

By the end of this year, she reported, the town will have spent roughly $16.2 million, leaving a healthy balance for the start of 2016.

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Gustine told the trustees that sales tax revenue, which is the town’s main source of income, has been increasing at a rate of about 6 percent in 2015, over the amount collected in 2014.

As for the severance tax proceeds, they are energy impact funds paid to the state by energy companies drilling for oil and gas in Colorado, and are dispensed by the Colorado Department of Local Affairs.

In addition to severance taxes, which are assessed against oil and gas pumped and sold by the industry, the state collects Mineral Lease Fees, which come from lease payments to the federal government for oil and gas producing fields.

Carbondale has since 1998 received severance tax and lease fees that, combined, have ranged from less than $40,000 in 1998 to more than $800,000 in 2009, the year that Garfield County’s energy industry was operating at its peak.

The 2015 payments came to a little more than $480,000, and mainly were used to pay for capital projects related to improvements to Highway 133 as it passes through Carbondale, and the reconstruction of parts of Barber Drive.

Harrington said the town has been warned by the state that its severance-tax payment for 2016 could be reduced by as much as 61 percent, which Gustine said could amount to as much as $130,000.

In general, Harrington said, the town’s revenue projections are favorable for the coming year’s budget.

Other trustee action from Tuesday night include:

• Signing a contract for construction of a water line along Industry Way;

• Finalizing the $500 purchase of a public artwork, “Grow To The Sky,” which currently adorns the sidewalk outside Marble Distillers on Main Street.

Published in The Sopris Sun on September 10, 2015.

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