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Governor vows to look into funding distribution

Governor John Hickenlooper

Governor John Hickenlooper

Kelly Sloan, The Business Times

Colorado Gov. John Hickenlooper has vowed to look into the appropriation of nearly $4 million in bonus payments from federal mineral lease sales local government officials say rightfully should be distributed.

“We’ll put it on a fast track,” Hickenlooper said during a meeting in Rifle with the Associated Governments of Northwest Colorado. “I’ll either get you the money or point the finger at the guilty legislator.”

The City of Grand Junction and Mesa County could receive a total of almost $250,000 in the distributions.

Marty Chazen, a member of the Grand Junction City Council, presented a letter to the governor from the AGNC asking for his assistance in distributing $3.8 million from the state fund.

“We respectfully request that your office look into this matter and see to it that the money that rightly belongs to our member governments is distributed to them in accordance with state law in as expeditious a manner as practical,” Chazen said in reading the letter.

The Local Government Permanent Fund was established by the Colorado Legislature in 2008. The fund receives 50 percent of the state’s portion of bonus payments on mineral lease sales on federal lands to supplement direct distributions to local governments affected by mineral extraction on public lands. The money is intended to help local governments pay for the effects of natural gas and oil development as well as other mineral extraction on nearby federal land. Distributions are required when the yearly balance in the Mineral Lease Fund, from which direct distributions come, is projected to be at least 10 percent less than the previous year.

Since 2009 — when funding went to a number of projects in Western Colorado, including construction of the 29 Road overpass in Grand Junction — money in the fund has been redirected by the Legislature into the general fund to help balance the budget.

Elizabeth Tice-Janda, revenue supervisor for the City of Grand Junction, discovered that a balance remained in the fund this year and that conditions for distribution of the funds to local governments had been met.

“This was the first year that there was a fund balance available in the Local Government Permanent Fund and revenues were projected to be at least 10 percent down from the prior. Therefore, the General Assembly should have transferred the fund balance to supplement local government direct distribution payments,” Tice-Janda said.

The money should be distributed according to the same ratio as the 2013 direct federal mineral lease disbursements to local governments that went out in August. Based on that formula, Tice-Janda prepared a spreadsheet showing the City of Grand Junction should receive $78,828 and Mesa County should collect $168,062.

After being alerted by Tice-Janda, the Department of Local Affairs confirmed a balance of $3.8 million was sitting in the fund and further confirmed those funds hadn’t been appropriated. The department subsequently sent a request to the Joint Budget Committee of the Colorado Legislature in September, asking that those funds be distributed in accordance with the state law. The JBC denied the request, however, citing a lack of “statutory authority.”

“We believe that the law is quite clear on this matter” Chazen said in reading the letter to Hickenlooper. “Those moneys were deposited in the Local Government Permanent Fund specifically to supplement direct FML distributions from the MLF in years where that fund’s balance was projected to be below 10 percent of the previous year’s balance. That is precisely the situation as it stands, and yet the $3.8 million fund balance remains there.”

Hickenlooper was sympathetic to the request, saying it “makes perfect sense to me” and characterizing the question as an “easy one.”

Kelly Sloan is a Grand Junction resident, freelance journalist, small business owner and Centennial Institute fellow on energy and economic policy. He specializes in public policy and political communications.
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