Rawlins managers warn of roughly $2 million shortfall as council begins budget process; council approves amendment and golf-course fee changes

City Manager Tom Sarvey told the Rawlins City Council at a work session on April 1 that the city is starting the 2025–26 budget process with an estimated $12.8 million in general fund revenue but faces choices that could push the budget about $2 million into the red.

"I would say right off that we are about 2,000,000 upside down right now as we start," Sarvey said, summarizing the starting figures and choices tied to capital and streets funding.

The council held the work session to review high-level revenue and fund-status numbers; Sarvey said the figures are discussion items and that department-level expenditure review will follow. He outlined a general-fund starting budget showing a $572,000 surplus before adding replacement capital and a proposed $1 million streets program. Adding $1.5 million for capital replacement and $1 million for streets would eliminate the surplus and create roughly a $2 million shortfall.

Why it matters: Sarvey said the city must balance near-term requests (operating, new programs, transfers) with recurring costs such as depreciation and funded replacement of capital assets. Rawlins recognizes about $1.5 million a year in depreciation expense; Sarvey said that is the level the city would need annually to preserve its asset base.

Health insurance and retirement costs

Sarvey told council the city moved its employee health plan into the Wyoming Educators Benefit Trust after sharply higher claims in fiscal 2024. For the August–December 2024 renewal period, the city paid about $592,000 in premiums while claims paid were about $653,000; including incurred-but-not-reported estimates, total claims were roughly $816,000, approximately $224,000 above premiums. The trust capped the renewal increase at 9 percent, a significantly smaller rise than the roughly 38 percent that would have applied if the city had remained fully self-insured, Sarvey said.

"We received a 9% increase from the WEBT on our premiums," Sarvey said, and staff estimated the general fund will need roughly $138,000 more to maintain the city's current premium strategy.

Sarvey also walked council through Wyoming Retirement System changes: law-enforcement retirement rates will increase by 0.9 percentage points for the employer and the employee for the 2025–26 year, with a similar 0.9-point increase the following year, eventually reaching a combined 22.6 percent premium. Staff estimated the city's share of the first 0.9-point increase at about $17,001.78 for next year.

Fund balances, capital and project timing

Sarvey reviewed the audited fund-balance history, noting a general-fund fund balance reported at roughly $27.3 million on the balance sheet but emphasizing that much of that amount is already committed, encumbered, or functionally earmarked: interfund advances (about $1.9 million), prior transfers, capital projects and other constraints. He said Rollins' (transcript reference) capital assets historical cost is about $43 million with accumulated depreciation around $21.3 million; replacing depreciated assets at historical cost would require roughly $21.7 million.

Sarvey flagged specific items that will require council decisions or budget amendments: police vehicle credits and replacements, moving an office building donated by Black Hills Power (estimated $75,000 for relocation and foundation work), river pump-station pump replacements (estimated $125,000), and capital projects funded from sixth-penny (6p) revenues and ARPA reserves.

Council action on amendments and fees

At the regular meeting immediately following the work session the council approved a resolution authorizing a budget amendment to the 2024–25 municipal budget. The amendment adds expenditures funded from a combination of general-fund reserves, sixth-penny reserves, enterprise reserves and a CDBG grant; the motion described the total amendment as $5,287,110. The motion passed on a recorded vote of 7–0.

Council also approved a resolution updating municipal fee schedules, including new and revised golf-course fees to take effect April 14. Recreation staff told council the fee changes include a new one-month single membership at $125 aimed at short-term visitors and seasonal workers, and modest increases in other categories to boost revenues and reduce the amount transferred from the general fund to support the course. Recreation staff said the changes are part of a larger marketing push to increase rounds and memberships.

Discussion vs. decisions

Sarvey and staff framed the budget presentation as a starting point and asked council to provide priorities. Several council members asked clarifying questions about fund balances, the ability to designate fund balance for funded depreciation or emergency reserves, and the tradeoffs of using general-fund dollars to support enterprise needs such as water/sewer transmission-line repairs.

Next steps and timeline

Sarvey said council will continue the budget process with expenditure-focused sessions on April 7 and April 10, strategic-planning sessions later in April, and the three readings of the fiscal-year budget scheduled for May 20 (first reading), June 3 (second reading) and June 9 (third and final reading).

What stayed unsaid or unresolved

Council did not set a final cash-reserve or funded-depreciation policy at this meeting; Sarvey said he will present a cash-reserve policy to council for direction. He also noted that larger revenue swings (for example, wind projects or major construction in Carbon County) could materially change future-year planning and urged strategic restraint if one-time project revenue were to reappear.

Ending

Council members thanked staff for the overview and directed staff to bring back the expenditure side of the budget at the scheduled April meetings. Sarvey said staff would return with refinements and suggested options for balancing capital and operating priorities. "I hope that's a good start to our budget," Sarvey said at the close of the work session.