Trinidad City budget begins move forward

Reality based budgeting puts city on positive footing for future growth
by Bill Knowles
TRINIDAD — With a total general fund budget of $8.1 million, the City of Trinidad stands to end 2016 with a surplus while still covering all necessary services.  Services such as water, gas, electric, and sewer will see upgrades or replacement in infrastructure over the next 20 years, and things like parks and recreation, culture, and heritage could see growth.
In an interview with the World Journal, City Manager Gabriel Engeland spoke briefly on how the city’s funds have been transferred from one account to another and how it affects the budget.  “One way,” he said, “was PILT—Payment in Lieu of Taxes—and the idea behind that is if our water system or our power and light system were operated as a private enterprise they would be taxed…those taxes would go to the government.”
“The second way is called ‘service reimbursements’. An example: the city’s IT Director is providing support to gas or waste water or any utilities, his time is reimbursable back into the general fund.”   What the staff did was cut back all service reimbursements from the enterprise funds to the general fund.
The 2016 budget reflects a noticeable drop in funds transfers.  They were cut from $1.2 million in 2015 to $689 thousand in 2016.  In addition, in 2016 the general fund will pay around $500 thousand on the loan note for the sewer plant. 
“Historically what has happened in Trinidad is: funds were transferred, in a legal manner, to balance the general fund.  But the philosophy we took this year is that the general fund has to stand on its own,” Engeland said. “So the only thing rate payers are paying for in any of the enterprise funds is the cost for service and the cost of infrastructure.”  Then there is the base rate charged for the resource used.
By setting the budget up this way, the city hopes to halt the flow from the enterprise funds to the general fund.  They will also use the enterprise rates to build the infrastructure without actually having to increase rates to the customers, according to Engeland.
For the year 2016, the city will be seeing a 45 to 50 percent cut in the total funds involved in transfers.  This bucks the historic trend for Trinidad by stopping the slide toward dependency on the enterprise funds, the most lucrative of the city’s funds, and forcing the general fund to become independent.  This will take about three years to accomplish, according to the city’s economic plan.
Even though the city feels comfortable with where they are in the budgetary picture, there is pressure to begin a very large rework of the city’s infrastructure, purchase of both public safety equipment and fleet equipment, and street projects.