Casper City Manager V.H. McDonald wants to clear up a major misconception about the city's money and the current budget crunch.

The funding for the day-to-day operations of the city is different than the funding for long-term, one-time capital projects, McDonald said.

"That's all capital money, distinctly separate and (with) a distinctly separate purpose from operating money that we're talking about being short on," McDonald said.

These capital funds will not be used for operations, nor are general funds used for capital projects, McDonald said. "If you use that (capital funds) for ongoing costs, there will be a day of reckoning for that, too."

The sharp drop in sales tax revenues, tied directly to the rapid decline in the energy industry, affects the city's general operating budget that funds police, fire, streets, parks, technology, water, waste disposal and other services.

The city is dealing with the revenue decline, now projected to be about $6 million by the end of the fiscal year on June 30, by cost-cutting measures and a draw of about $1.6 million on the city's $26 million in reserves.

These budget issues are about the general operating funds and budget of about $140 million.

These budget issues are not related to the $56 million capital designated funds from the Optional 1 Percent Sales Tax No. 15, user fees, enterprise funds, and some state and federal grants.

The capital money is for future, long-term development, McDonald said.  "That distinction is important. You'll see the projects continue."

Some of those capital projects have or will include the land for the David Street Station plaza, the $3 million purchase of the Plains Furniture building on South David Street, the new fire station in Paradise Valley, improvements at Hogadon, and improvements to the city-owned land used by the YMCA.

However, funding for capital expenditures is not immune from the economic downturn.

While the city and county conservatively projected revenues from the Optional 1 percent sales tax No. 15,  they have fallen short about $200,000 than expected.

The city will continue this year with the projects funded by the optional sales tax, McDonald said.