Unexpected expenses and revenues affect Dillon budget as town looks to increase financial transparency
Kyle McCabeFollow
kmccabe@summitdaily.com
Dillon’s acting town manager suggested town staff review its 2026 budget to adjust beginning fund balances, revenues, expenditures and transfers in preparation for the 2027 budget season
The town hired a former finance director, Carri McDonnell, as a consultant to assist the interim finance director with the project. McDonnell presented suggestions for amendments and supplemental appropriations at a July 21 work session, and the Dillon Town Council approved them Aug. 4. She said the project aimed to ensure transparency and accuracy and build trust and confidence in the reporting of town financials
“That’s what I think we’re doing tonight,” McDonnell said in July
McDonnell said she brought updated 2025 numbers from last year’s audit into the 2026 budget before working with staff to update 2026 revenue and expenditure projections. She reviewed each of the town’s funds, starting with the general fund, which she said was not balanced in the original 2026 budget and did not see improvement in the review
“It is really not balanced today,” McDonnell said. “It’s in much worse shape after going through the (2025) actuals, and looking at how the budget numbers were derived for (2026), we’ve had to make some significant changes.”
Some additional costs, McDonnell said, came from leadership changes, as Dillon lost its finance director and let go of its town manager this year. The town hired McDonnell to supplement its finance department and, at its Aug. 4 work session, selected a company to lead its search for a new town manager
General fund revenues are now projected to be about $200,000 less than originally anticipated, McDonnell said, while expenses are expected to increase by about $230,000. She said those were “not big numbers” compared to the audit showing an increase in the general fund starting balance of $1.6 million for 2026
“We don’t have revenues covering expenses, but we have cash,” McDonnell said. “That’s good news.”
While revenues fail to cover expenditures by almost $530,000, she said many of those issues should not reappear in the 2027 budget. She recommended using the 2026 starting fund balance to cover that difference, although she emphasized that the town cannot do that every year or it will deplete the general fund’s reserves
“We’re lucky we counted our chips wrong and we have more chips,” Mayor Joshua Samuel said. “But only this time.”
McDonnell’s review anticipates the 2026 general fund ending balance will be about $870,000 higher than originally expected, sitting at about $5.4 million.
She suggested the excess revenues from the marina, which are included in the general fund, be transferred to the capital fund. On Aug. 4, the council discussed the idea and elected to make the transfer this year and reevaluate next year if it should continue regularly. That excess will be about $143,000 this year, but McDonnell said it is often more in years with better marina water levels
The capital fund saw decreases in its 2026 starting balance and revenue projection and an increase in expenditure projections. McDonnell highlighted several projects that she moved from the Dillon Urban Renewal Authority to the capital fund because of a lack of funds in the authority’s revised budget
To “help the general fund,” McDonnell moved $200,000 of sales tax from the capital fund into the general fund
“It may have to be more,” McDonnell said. “You’ll see that the capital fund can afford it, in order to help balance, but we’ll see.”
Overall, the review decreased the expected ending capital fund balance by about $600,000, putting it at $2.3 million. McDonnell said the fund is in “really good shape.”
McDonnell described the general fund and the water fund as “tough ones,” though she said neither are “insurmountable.” The water fund’s starting balance decreased by about $660,000, while its projected revenues decreased and projected expenditures increased. The projected ending balance decreased by over $1 million, and revenues will not cover expenses by about $300,000, according to McDonnell’s staff memo
Decreased water usage brought on by drought conditions in Colorado has benefitted the town in terms of water conservation but hurt its water fund revenues, McDonnell said. She told the Town Council on Aug. 4 that the town may need to loan sewer fund money to the water fund to balance it
The Water Plant Improvement Fund saw increases in starting balance and revenue and a decrease in expenditures, adding up to an increase of about $1.5 million in its projected 2026 ending balance. Combined, the two water funds’ projected ending balance is nearly $9 million, but McDonnell said only around $200,000 is cash, or spendable funds, while the rest are nonspendable assets like the water system
The sewer and sewer plant improvement funds saw little change in their ending balance projections. Other funds, including the Housing 5A Fund, Streets Fund, Parking Fund, Conservation Trust Fund and Cemetery Perpetual Care Fund, also saw little change in their ending fund balances
McDonnell said she and the interim finance director will continue working with department heads to keep revenue and expenditure projects as accurate as possible
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