Oak Creek Routt County Commissioner Nancy Stahoviak told the Oak Creek Town Board its current deficit could be double the $161,000 the Town Board members originally thought.
Stahoviak, who lives in Oak Creek and is a former treasurer for the town, spent nearly four hours with the Town Board Friday night helping with its 2007 budget. During the meeting, Stahoviak said the town may be closer to $300,000 in debt after taking into consideration restricted funds and a 1 percent sales tax that had not been allocated to the town's general fund.
Stahoviak made several recommendations to the board, including updating the construction costs of the town's Main Street and wastewater treatment plant; updating the town's fund balance sheets to reflect new allocations; and to look at the "bigger picture" of the budget, rather than obsessing over individual line items.
Stahoviak told the town it should consider transferring funds from its enterprise fund - which includes revenues from utilities such as water, sewer, electricity and trash service - into the general fund. The general fund, which includes property and sales tax revenues and is used for the majority of the town's operations, faces the deficit. The enterprise fund shows a healthy balance.
Historically, the town has used the enterprise fund to balance its budget, Stahoviak said.
The town's auditor, Tim Mayberry, questioned the legality of such transfers and the town has been trying to manage without them. Instead, the Town Bard has undertaken a series of budget cuts.
Stahoviak said she could not find anything in state budget law that would keep the town from using transfers.
"There is absolutely nothing in state statute that prohibits you from doing that," she said. "What I am concerned about is the continuing negative balance of the town's budget. I do believe that having a negative balance is in violation of state budget law."
Board member Tom Bleuer agreed and even suggested increasing the town's electric rates by 25 cents per-kilowatt-hour to help generate more revenue.
"This is a way that everyone contributes," he said. "This is a more even way of helping this town survive."
Though the board did not make a decision on whether to transfer funds, Stahoviak said she did not see another option.
"It's up to the board, but this is the only way to make this work," she said. "I don't think there are any other ways through cuts or additional revenues that will generate enough funds to chip away at the negative balance. It's not going to happen."
Though the town already has received a $300,000 grant for a Main Street Project meant to improve and beautify downtown, the board decided it mostly likely won't be able to move forward with the project for at least another year.
The board may decide to allocate some of the funds that would have been used for the Main Street Project to the Public Works budget for electric system upgrades, a project that Public Works Director Jim Photos said should be a town priority.
"I'd like to see an additional $70,000 because we have leaning poles, (power) lines that are sagging and trees that need to be trimmed," he said. "We need to start upgrading these things before the project gets out of control."
Because the town cannot afford to proceed with the Main Street Project this year, the board may look into revising the scope and design of the project to include essentials like lengthening sidewalks and replacing street lights, and do away with "cosmetics" like flower pots, benches and trees.
Town Clerk Karen Halterman reminded the board that the Colorado Department of Transportation grant the town received for the project was primarily for safety enhancements.
The board agreed that the most important thing is to gauge community interest in the project before moving ahead.
The board directed Halterman to contact CDOT officials to "beg for forgiveness" and to request the grant be held in abeyance until the town can move forward with the project.
Construction on the mandated rebuilding of the wastewater treatment plant and replacement of connection lines is scheduled to begin in spring.
Another issue the board will have to mitigate is the fact that the town's only police officer, Chief Linda Koile, has requested additional staffing.
Koile was not at the budget work session Friday.
During its last round of budget cuts in November, the board cut nearly $11,000 from the police budget, and did not give Koile permission to hire any other officers.
Several board members suggested contracting law enforcement with the Routt County Sheriff's Office, as the town of Yampa does, to help Koile.
Stahoviak said the conversation the county would have with Oak Creek about contract law enforcement would be "much different" than the conversation the county had with Yampa.
"It's going to be a pretty complicated discussion if you want to talk to the sheriff about contracting law enforcement because Yampa is much smaller than Oak Creek and doesn't have the number of businesses that are open on Main Street," she said. "And it's going to cost Oak Creek some money."
Although the Sheriff's Office could offer some assistance to Koile, the department likely couldn't have a regular presence in the town without a contract, especially since the Sheriff's Office is understaffed.
The Oak Creek Fire Protection District soon will vote on making a $4,500 donation to the town's police budget to help with costs, Wisecup said.
Stahoviak said the Town Board needs to receive monthly fund balances and revenue and budget worksheets so the board understands what is coming in and what is leaving every month. The board currently does not receive such documents.
Treasurer Sandy Jacobs said she would prepare a financial report for the board to review at its last meeting of the month.