The Bay Citizen says it has raised $14.5 million and that it only will spend $4 million in its first year, according to a report by Staci D. Kramer on the PaidContent.org website.

Editor-in-Chief Jonathan Weber decided to release the news that Bay Citizen had raised the $14.5 million (which includes the $5 million in seed money from Warren Hellman) after a Matier & Ross item on Dec. 26 said the nonprofit was hitting the streets of Oakland to sell subscriptions. The M&R item, which the Press Club picked up, said that Bay Citizen’s budget for its first year was $5 million — the same amount Hellman had put up for the venture.

“The impression left was that the new news org was out of money just six months after launch and had to race to raise funds by ‘hustling donations on the corner,'” Kramer wrote.

Two more quotes from Kramer’s piece:

“Weber tried to set the record straight on Twitter through his @citizenweber account, mentioning total fundraising of $14 million and spending of less than $5 million. It turns [out] when we spoke a day later, he was still flummoxed by how the budget and the Hellman gift had been connected … — and more than a little frustrated to be put in the position of defending salaries after going through it nearly a year ago. (Frazier is out of the country.)”

And:

“Where did the money go?: ‘We’re certainly not out of money. We’re very much on plan,’ Weber said, with first-year spending at $4 million. That covers 26 full-time staffers (18 editorial, including Weber), news gathering expenses, site development, fundraising costs and more. They’re in the process of hiring three more in editorial. And yes, as he and Frazier confirmed when we spoke last January, they do make — and pay — competitive salaries. Her salary is $400,000. Weber’s salary will be public when they file with the IRS and he prefers to keep it that way.”

Kramer said that Bay Citizen has enough money to keep going through 2012.