<\/p>\n
Sales tax revenue in Cortez is higher than the city initially projected given the economic impact of the COVID-19 pandemic, but the finance director warned the City Council Tuesday evening that operating costs are growing faster than revenue. <\/p>\n
The trend \u201ccreates the potential for hard decisions in the future,\u201d said Ben Burkett, finance director for the city of Cortez.<\/p>\n
The City Council is proposing general fund expenditures of about $12 million, with total operating expenditures of over $27 million for 2021. By comparison, the estimated general fund expenditures for 2020 were over $11 million, with total fund expenditures estimated at over $28 million.<\/p>\n
This year, Cortez has a surplus of $230,000 in the general fund for city services and operating costs, not specific projects.<\/p>\n
But the city faces a projected deficit of $412,000 in 2021 and $828,000 in 2022, as anticipated costs increase for city needs such as new police vehicles, Burkett said.<\/p>\n
Proposed budgets can \u201cvary depending on city priorities and the revenue available,\u201d Burkett said Tuesday during a public meeting on the 2021 budget. The city can choose to spend money on projects to improve services to the community, which can contribute to a projected deficit.<\/p>\n
And according to city code, Cortez needs to set aside at least 20% of its operating expenses, or $2.25 million.<\/p>\n
The projection for 2020 was revised because of COVID-19, but Burkett said sales tax revenue has been higher than expected since the start of the pandemic.<\/p>\n
The projected deficits for 2021 and 2022 were \u201cbased on a potential recession\u201d with the economic fallout of the virus, Burkett said.<\/p>\n
\u201cIf sales taxes come in above what we\u2019re expecting, which is what is happening right now,\u201d he said, Cortez\u2019s budget might have a brighter future.<\/p>\n
At the same time, revenue can\u2019t keep up with operating costs. And money generated by the lease of the city\u2019s hydroelectric plant to Empire Electric Association LLC is expected to drop as the two entities negotiate a new contract, which reflects the lower cost of renewable energy nationwide.<\/p>\n
\u201cIt\u2019s something for the council to be aware of and watch,\u201d Burkett said.<\/p>\n
The new finance director also said there were many mistakes in the records when he took on the role. It was formerly held by Katheryn Moss, who last week entered into a plea agreement for embezzlement of public city funds.<\/p>\n
The city is accepting public comments on the proposed budget<\/a> through Sept. 25.<\/p>\n