City Council hears long-range financial plan

    COMMERCE CITY — City council members heard multiple predictions for the future from the finance department Jan. 30 based off differing projections for economic climate.
    Roger Tinklenberg, director of finance for Commerce City, reported that the general fund expenditures rose from $41.5 million in 2010 from $20.4 million in 2001. This growth largely mirrors the growth in population for the city.
    “The expenditures track the population growth very closely,” Tinklenberg said. “The reason for that is: the biggest growth driver, when the population expands, that increases the calls for service. Calls for service determine police department staffing. The police department is the largest department. It’s the majority of expenditures for the city. So obviously, it has a direct impact.”
    Tinklenberg, in presenting estimates for future years, said there would be growth in the next decade, but the question was how much. The multiple predictions were based off several factors including the possibility that the housing market doesn’t improve in the near future. The worst-case scenario projects 1.7 percent growth, and the general fund would not rise above the $50 million mark until 2017.
    “If that happened we would have to scramble to maintain services, and very probably have to cut services,” Tinklenberg said.
    Slightly above this grim scenario is the finance department’s low estimate, which assumes very little expansion in the number of businesses, and projects 3.9 percent growth, with general funds exceeding $50 million by 2014.
    “The middle to high estimates may provide money to add employees and increase services, add new programs and fund capital projects,” Tinklenberg said. “Middle estimate includes both growth within the existing businesses and modest expansion in the number of businesses with 5.3 percent growth. High estimate provides an up-side scenario with 6.8 percent growth.”
    Looking at the vulnerabilities to the city’s finances, Tinklenberg reported that all city revenues are affected to varying degrees by the national economy.
    “For example, sales tax is going to rise or fall as the retail sales change,” Tinklenberg said. “However, Commerce City is not reliant on ‘big box’ retail. The only large retailer we have is the Walmart store. So as a result, we’re less vulnerable to economic shocks. So that’s the good news.”
    Tinklenberg said property taxes were a fairly large portion affected by the economy as well, approximately $2 million a year.
    “Changes in the property tax are delayed and that’s due to the market,” Tinklenberg said. “The assessor sets their valuations values based on the market. For example, in 2011, they did their residential reassessment. And as those assessed values change, taxes are collected a year later, so there’s a delay.”
    In contrast, municipal court fines are fairly stable, he said. These fines are affected more by police traffic unit staffing than anything else.
    Commerce City has a large connection to the larger housing market due to the major source of revenue from building permits.
    The presentation included a list of transportation improvements needed on priority roadways including $3.1 million on 72nd Avenue, $862,500 for a new signal system, and $30 million for Tower Road, which would include funds from outside Commerce City.
    On the parks, open space, recreation and trails improvement list, the finance department listed four projects for 2011 and 2012: Loop Trails north of 96th Avenue for $7,970,864; O’Brian Canal Trail for $5,673,642; 2nd Creek Trail $1,709,136; Loop and neighborhood connections $588,086. For 2015, a new recreation center is scheduled for $19.3 million.
    In summary, the presentation bluntly said there was not enough money for needed capital projects, and all planned projects should be priority ranked for funding and develop new funding sources.
    According to the presentation, the city has never used reserves, and the historical fund balance has risen from $46.9 million in 2002, to $107.6 million in 2010.

Roger Tinklenberg

Contact Ben Wiebesiek at 303-659-2522, ext. 206, or email bwiebesiek@metrowestnewspapers.com.