Locals shopping local helped to prevent a catastrophic drop in tax revenues, so the city budget isn’t in nuclear-destruction mode. We talk with Finance Director Ben Burkett about the future.
CITY OF CORTEZ OFFICIALS EXPECT A ONE POINT ONE MILLION DOLLAR SHORTFALL IN SALES TAX REVENUES FROM THE COVID-19 SHUTDOWN IN APRIL AND MAY, BUT IT'S LESS THAN HALF WHAT THEY EXPECTED. YOU'RE WATCHING THE LOCAL NEWS NETWORK, BROUGHT TO YOU BY BIG-O TIRES IN CORTEZ. I'M WENDY GRAHAM SETTLE. CITY OF CORTEZ OFFICIALS SAY THE STAY-AT-HOME SHUTDOWN IN MONTEZUMA COUNTY WON'T HAVE NEARLY THE FINANCIAL IMPACT ON CITY FINANCES AS ORIGINALLY PREDICTED. WHEN THE CORONAVIRUS OUTBREAK HIT COLORADO IN MARCH, GOVERNOR JARED POLIS ORDERED MOST BUSINESSES CLOSED AND RESIDENTS TO STAY AT HOME. CORTEZ CITY FINANCE DIRECTOR BEN BURKETT ORIGINALLY PREDICTED THAT SALES TAX REVENUES WOULD DROP BY MORE THAN 3 MILLION DOLLARS BY THE END OF 2020. BUT NOW, HE PREDICTS SALES TAX REVENUES WILL DROP BY LESS THAN HALF THAT AMOUNT BECAUSE CORTEZ IS THE ECONOMIC HUB FOR MONTEZUMA COUNTY AND MUCH OF THE FOUR CORNERS REGION.
THERE'S PRETTY STRONG, LOCAL SUPPORT ALREADY. YOU KNOW, IF YOU THINK ABOUT IT, WE ARE A, A HUB OF TRADE. IF YOU WANT TO, YOU KNOW, WANT TO THINK OF IT THAT WAY, WE GET PEOPLE OUT FROM DOVE CREEK, FURTHER OUT, EVEN YOU GET, YOU KNOW, A LOT OF FOLKS FROM DOLORES, MANCOS,FROM THE RESERVATIONS AROUND US. SO IT'S KIND OF LIKE A LOCAL HUB. PEOPLE DON'T HAVE A LOT OF CHOICE, SO TO SPEAK. SO WE KIND OF BENEFIT FROM THAT.IN APRIL, THE CORTEZ CITY COUNCIL APPROVED $950,000 IN CUTS TO THE CITY'S GENERAL FUND, AND FOR NOW, THE CITY IS DEFERRING OTHER CUTS UNTIL OFFICIALS BETTER UNDERSTAND THE EXTENT OF THE PANDEMIC ON CITY FINANCES. THIS YEAR'S LOSS IN SALES TAX REVENUES COMES ON THE HEELS OF MORE THAN 2 MILLION DOLLARS IN CUTS THE CITY MADE TO BALANCE THE 2020 BUDGET. WHILE MANY MUNICIPALITIES ARE RELYING ON FUND BALANCES TO COVER REVENUE SHORTFALLS, THE CITY OF CORTEZ CAN'T DO THAT BECAUSE IT HASN'T HAD AN OFFICIAL BUDGET RECONCILIATION FOR NEARLY FIVE YEARS. BURKETT SAID THE CITY ADOPTED A NEW FINANCE MANAGEMENT SOFTWARE PROGRAM IN 2015, BUT THE CONVERSION WAS POORLY EXECUTED. AS A RESULT, THE CITY HAS NOT HAD A COMPLETED AUDIT FOR THE PAST FOUR YEARS. BURKETT EMPHASIZED THAT THE CITY IS NOT BROKE; IT HAS PLENTY OF MONEY IN THE BANK. THE PROBLEM IS THAT THE CITY DOESN'T KNOW HOW MUCH MONEY IT HAS IN EACH OF ITS FUND BALANCES, INCLUDING THE GENERAL OPERATING FUND, AND IT CAN'T USE THOSE FUND BALANCES UNTIL AN AUDIT DETERMINES WHAT THOSE AMOUNTS SHOULD BE.
THE NATURE OF SUCH WHAT WE HAVE TO DO IS UNWIND A LOT OF THAT, THAT MESS. AND IT'S, A BIG CHUNK OF IT JUST COMES FROM THE INITIAL IMPLEMENTATION OF BRINGING NUMBERS OVER, YOU KNOW, A SIMPLE THING. HERE'S A SIMPLE WAY TO THINK ABOUT IT: IS I HAVE OUR, WE HAVE OUR GENERAL FUND, WHICH IS GENERAL SERVICES. GOT POLICE, HAS GOT FINANCE, GOT HR, AND WE HAVE OUR 2015 AUDIT, AND IT SAYS YOU HAVE X DOLLARS AT THE END OF THE YEAR. I SHOULD SEE THAT AS MY BEGINNING NUMBER OF X DOLLARS IN THE FOLLOWING YEAR. THAT DIDN'T COME OVER, AND THAT'S ACROSS THE BOARD. SO IT'S UNWINDING EVERYTHING, GETTING TO A POINT WHERE YOU CAN UNDERSTAND IT. WITHOUT A CLEAR BUDGET PICTURE, BURKETT AND CITY MANAGER JOHN DOUGHERTY, BOTH OF WHOM ADOPTED THE FINANCIAL MESS FROM PREVIOUS ADMINISTRATIONS, DEVELOPED A NEW BUDGET FOR 2020 THAT WAS BASED SOLELY ON REVENUES THAT WERE EXPECTED TO BE GENERATED THIS YEAR BEFORE THE PANDEMIC SHUT DOWN THE ECONOMY. THAT FORCED THE CITY TO CUT 2 POINT 2 MILLION DOLLARS IN EXPENSES FROM 2019 TO 2020. AND IN SOME WAYS, THOSE EARLIER CUTS HAVE MADE THE REVENUE SHORTFALLS FROM THE PANDEMIC A LITTLE EASIER TO MANAGE.SO, I THINK WE GAINED SOME OF THOSE EFFICIENCIES WITH THAT COMING TO THE BALANCED BUDGET. RIGHT? DO WE HAVE MORE TO GO? ABSOLUTELY, I BELIEVE. AND THAT'S WHERE I THINK SOME OF THE $1.1 (million) THAT WE HAVE ARE THE $900 K THAT I SUGGEST THAT GOES TOWARDS THE $1.1 IS SOME OF THAT. SOME OF IT. IT WILL HURT. I'M NOT GOING TO DISCREDIT ANY OF THE CUTS. SOME OF THE PEOPLE GAVE LIKE PUTTING OFF MAINTENANCE. THERE ARE SOME PROJECTS THAT MAY NOT GET DONE, RIGHT? LIKE A BIG PROJECT THAT PEOPLE WANT TO SEE GET DONE IS A PARK OVER ON THE SOUTH SIDE, IT'S GOING TO HAVE TO BE PUT OFF. WE JUST DON'T HAVE THE FUNDS FOR THAT.BURKETT WARNED, HOWEVER, THAT THE CITY WILL HAVE TO MAKE SOME SACRIFICES. IT WON'T START CONSTRUCTION ON A NEW PARK ON THE SOUTH SIDE OF TOWN, THE OUTDOOR MUNICIPAL SWIMMING POOL MOST LIKELY WILL NOT OPEN THIS SUMMER, AND SOME EMPLOYEES MAY BE FURLOUGHED. IN THE MEANTIME, BURKETT SAID, THE CITY WILL CONTINUE TO PROVIDE ESSENTIAL SERVICES LIKE CLEAN WATER, TRASH SERVICE, ESSENTIAL STREET MAINTENANCE, AND POLICE PATROLS. IF YOU'D LIKE TO KNOW MORE ABOUT THE IMPACT OF THE PANDEMIC ON CITY SERVICES, VISIT THE WEB SITE AT CITY OF CORTEZ DOT COM. I'M WENDY GRAHAM SETTLE. THANKS FOR WATCHING THE LOCAL NEWS NETWORK.
