by Bill Knowles
WALSENBURG- The budget moon is on the rise and through November the Walsenburg City Council will be considering what it will do with a proposed 2011 budget showing around $7.2 million in revenues and close to $10 million in expenditures. The resulting gap of about $2.8 million needs to either be filled or closed.
With two months left in 2010 the city is in pretty good fiscal shape and should end the year reasonably well, according to City Finance Director David Johnston.
“It’s not going to be peaches and cream, we’re going to end the year tight. That’s simply because we have major projects going, like the wastewater treatment facility. But it’s a little soon to say because we don’t know how the election’s going to come out.”
“We would go down roughly $100,000 in revenue next year if the ‘ugly three’ were to pass.” By the ‘ugly three’, Johnston was referring to ballot measures 60, 61 and 101.
“I would hope that if they pass we could apportion the loss over expenses and hopefully not get into any funds,” Johnston explained.
The proposed 2011 budget shows no layoffs for the coming year, which will be good news for city employees if the council chooses to keep staffing at current levels. Layoffs in the first quarter of 2010 generated hard feelings between employees and the city’s administrative staff.
Twelve workers were pink slipped and by the end of the summer three administrative staff members had turned in their resignations. There was blame enough being tossed around with some city staff taking hits for increased expenditures and a slow down in revenue collections from 2009 and into 2010. Some of that was a result of unforeseen local events such as weather and a broken gas line south of Walsenburg. Another aspect that drove down revenue was misdirected private investment activity at the national level. Its impact is still being felt throughout the states and will continue to be felt for several more years all the way down to local levels.
Alan Hein vacated the city administrator’s office due to health considerations. He was followed by then City Finance Director Krystal Vigil. Finally, in September, City Clerk Lori Sheldon left. Except for the three administrative positions the reductions in force brought staffing more in line with other cities that are about the same size as Walsenburg such as Rocky Ford.
“I know that the layoffs at the time seemed unfortunate but they were a prudent move on the city’s part,” Johnston told the Huerfano World Journal during a recent interview.
It was a decision that the city had to make in order to salvage the 2010 budget and move forward on state mandated projects such as the WWTF and the Northlands water project.
“Even though the former city finance director was competent she was in over her head with some of this. They were having some trouble with the modified accrual system that’s being used by the city,” Johnston said. The auditors report produced by Watkins and Schoomer did not indicate any unethical or illegal activity involving the city’s money for 2009.
Modified accrual is an accounting system that allows an entity that collects or pays something within 60 days to put that action on the books within that time frame. If it goes longer than 60 days, it is considered cash and put on the books whenever the transaction happens. According to Johnston the general fund is on a modified accrual basis and the city’s enterprise funds are on a true accrual basis. That means the enterprise funds such as the water, gas and pool are booked when the money comes in or goes out. With the general fund a collection or payment may fall outside of the 60 day time frame and the action is booked when the activity actually happens. “It’s a subtle difference but a difference none the less,” according to Johnston.
However by the end of 2009, according to the annal audit and accompanying notes the city’s net assets grew by a little over $259,000 or 2.9 percent. Meaning, the city brought in more revenue than expenditures under the 2009 city council headed up by then mayor Edi Sheldon.
Although budgets are not fixed in concrete they are, according to former City Administrator Alan Hein, a map of where city finances are going and where they came from, and the proposed 2011 city budget is no different. The city is still faced with large infrastructure projects. City staff is stretched but at the moment all jobs have been budgeted for. The city council has scheduled meetings for every Tuesday in November to have a proposed budget ready and sent to the state by the Dec. 15 deadline.