Town Manager Reports Lake City Directly Affected by Frozen FEMA Program

Town Manager Lex Mulhall attended a Department of Local Affairs (DOLA) funding freeze meeting last month, where questions were answered about all federal funding freezes mandated by Trump’s executive orders. On this call were over six hundred attendees from town and county governments, schools, special districts and non-profit organizations, all of whom were being affected by the freezing of federal funds.
Mulhall asked about the state revolving loan fund that will be used to fund the construction of Lake City’s Wastewater Treatment Plant (WWTP), set to begin this spring. He was told that funds that have already been rewarded are in possession of the state, but that no new funding is available and it is unknown when additional funding might become available.
Further, Mulhall was informed that 35 lawsuits have been filed against Trump’s executive orders, and two judges have ruled frozen funds are to be released immediately until the matter is settled in court. Despite this, most federal funds are still frozen and intended recipients of those funds are unable to submit reimbursement requests. In his Town Manager report submitted at the March 5 Board of Trustees meeting, Mulhall informed Trustees, “The Trump administration is ignoring the court rulings” at this time.

Mulhall went on to say in his report, “we have been directly affected, having received notice on February 25 that the Federal Emergency Management Agency (FEMA) Building Resilient Infrastructure and Communities (BRIC) program has been frozen and is currently undergoing review, and that they will not be able to help us until the program is up and running again.”
According to Mulhall, supporting documents that DOLA was assisting the Town with for the FEMA BRIC WWTP generator sub-application have been received, along with some of the documents for a FEMA BRIC Ball Flats Slope Flood and Debris Flow scoping project.
The state deadline for the FEMA BRIC applications has been pushed back from March 1 to March 12, and Mulhall and staff will be submitting both sub- applications in case the program does wind up being funded.
For the $900,000 supplemental loan for the WWTP from Colorado Water Resource and Power Development Authority, Mulhall was asked by Audit Firm Butler Snow to calculate how much the new sewer rates would have brought in if they had been in place in 2024. The firm requested this information because they need to verify that the Town will be capable of repaying the additional debt service for the loan.
In January/February of 2024, the Town generated $61,242 in water revenue and $65,129 in sewer revenue. In January/February of this year, $64,091 was generated in water revenue and $92,478 was generated in sewer revenue. That places water revenue 4.6% higher in 2025 compared to 2024, the percentage amount which the water rate has been raised. The sewer revenue generated is 42% higher than in 2024. Using that percentage, Mulhall calculated the estimated 2025 revenue by multiplying the total revenue from 2024 by the percentage change from January and February of 2025.
If total 2024 water revenue of $402,405 is multiplied by 4.6%, then 2025 estimated water revenue would equal $420,405. If total 2024 sewer revenue of $407,052 is multiplied by 42%, then 2025 estimated sewer revenue would equal $578,013. Therefore, total estimated 2025 water and sewer revenue with the new rates will equal $998,418.
Mulhall added that this calculation does not include the expected additional revenue that will come from changing the excess usage calculation rates, which is expected to generate an additional $10,000 – $20,000.
“This is looking good in terms of what we need to pay the additional debt service and to fund the water and sewer capital improvements fund sufficiently,” Mulhall said. “We budgeted $410,000 for water and $575,000 for sewer to ensure we could cover it.”
Mulhall’s calculations have been sent to Butler Snow, and according to Mulhall, they should now have everything needed to generate and execute the loan documents.
“Hopefully,” said Mulhall, “these funds have not been affected by the federal funding freeze.”