by Bill Knowles
WALSENBURG- Still struggling with a $1 million gap in funding, the Walsenburg Finance Committee began discussion on ways to bring the city’s finances back to health. Currently the city has shortages scattered across 38 different fund accounts.
“This is due mainly with the way the modified accrual accounting method deals with cash. We may write a check for $100 with that cash coming from several different funds,” City Finance Director Dave Johnston said.
According to Johnston, a shortage of $2.2 million comes from when the city moved the Water Park out of the General Fund in 2010 because the park was being operated as an enterprise. “What they (the auditors) did was they moved the assets and didn’t offset it against the equity, which they didn’t have at the time. They offset it against cash in the bank. So that set us up with the problem we have right now. We’ve borrowed from ourselves to keep all of these other funds where they belong.”
The books show that the city has about $3.6 million in their cash balances with $1.6 million in the General Funds. However when all funds, both restricted funds and unrestricted funds, are totaled, the city has $19.5 million.
This problem took years to develop according to Johnston. “But it’s like a thousand-piece puzzle and we were looking at one or two pieces while the others were getting out of hand.” Over the past several years, transfers from reserve funds were used to fill in the shortfalls and now most of those funds are dried up.
One suggestion for fixing the problem is to take $500,000 a year per year for four years and dedicate that to filling the holes. The finance committee has agreed to study that method for applying first aid to the city’s ailing finances.
The finance committee also heard from representatives from Colorado State Parks on current developments with the Lathrop Youth Camp. The city of Walsenburg owns the property where the camp is located. The city owns two pieces of property: one piece is located on the south side of Highway 160 just east of the hospital and a smaller piece,which is a campsite at Lathrop State Park, is on the north side of Highway 160.
Youth Services has indicated that they will not reoccupy the current areas, and now the State Parks system wants to enter into a more permanent agreement with the city, especially concerning the property on the north side of the highway. They also want to release the Department of Human Services, Youth Services from their part of the lease on the south side of highway 160 and possibly bring in a new tenant. The Finance Committee instructed staff to research the options they have available on the lease.
The Northlands project surfaced again. The finance committee received information about three possible routes for the sewer line that will run from the Northlands to the new wastewater treatment plant.
Two of the routes will cost somewhere between $5 million and $7 million. One runs over the hogback through the middle of town and over to the treatment plant, and the other runs down Jackson to the wastewater treatment plant.
The third option is to run the sewer line down the Pictou Arroyo, across I-25 and the railroad tracks and to the wastewater plant. This option may cost between $5 million and $5.5 million to complete. The city is looking at the third option for the sewer line.
Funding for the project will be a $600,000 DOLA grant coupled with a CDBG grant and a 45 percent grant and 55 percent loan from the USDA. The USDA loan is a low-interest loan spread out over 40 years.
The paperwork for the USDA grant requires an update that is due by the end of August to a two-year-old preliminary engineering report.