State plans to restore impact funds

The Colorado Department of Local Affairs is tentatively planning to offer about $76 million in energy and mineral impact grants and loans over the next state fiscal year.

The distribution would be the first in more than a year because funds instead have been diverted to help balance the state’s budget. It’s still contingent on the state’s future budget situation, but department officials are hoping none of the $76 million will have to be diverted.

“The governor’s office and everybody else will be watching the budget to see what happens and that’s why we need to say tentative,” said Bruce Eisenhauer, the department’s deputy director.

The department’s plans are particularly welcome in northwest Colorado, which from 2007–09 received $95.6 million for 228 projects. That was by far the largest amount of money from the fund to go to any region in recent years. The funding comes from a portion of state energy severance tax proceeds and federal mineral lease royalties and is intended to help communities deal with impacts of energy development.

Statewide, about $314 million was awarded statewide to more than 1,000 projects from 2007–09. Twenty-eight percent went to public facilities such as libraries, recreation centers and courthouses. Twenty-five percent went to road projects, and the same amount was awarded for water and sewer infrastructure. Remaining money went to public safety and smaller projects.

Mike Braaten, government affairs coordinator for the city of Rifle, said the first he had heard of the newly planned disbursements was when a Local Affairs official spoke at the quarterly Northwest Colorado Oil and Gas Forum in Rifle in early June.

“That was great news because we weren’t counting on DOLA having any money” available for the program, Braaten said.

Some $58 million in impact funds was diverted to the state’s general fund in the 2009–10 fiscal year, and another $10 million is going toward the 2010–11 budget.

“I don’t think anyone really likes the idea of using these funds to balance the budget, from the city’s standpoint,” Braaten said.

However, he said the city is going though a similar situation and understands the state didn’t have a lot of options.

Local Affairs initially plans to consider grant applications that were submitted for last August’s distribution cycle, which ended up being suspended. It expects to award $23.5 million based on those applications. Braaten said Rifle had applied for funds to help extend infrastructure to the energy innovation center it is developing.

In a separate state program, some severance tax and mineral lease revenues is directly distributed to affected communities to spend at their own discretion. Gov. Bill Ritter hasn’t sought to divert funding from that program, saying it provides too critical of a service.


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