Steamboat Springs Despite consistent sales tax increases of at least 8 percent a month this year, the city budget for 2001 looks to be a tight one, say city officials. Just whose head will be left on the chopping block, however, has yet to be decided.
"This is going to be the most difficult balancing act that I can remember," said City Manager Paul Hughes at a City Council meeting last week.
Finance Director Don Taylor said the tightness of the budget was caused by a number of factors.
Although sales tax revenues, which account for 69 percent of the city's general fund, have increased by about 8 percent this year, the city is budgeting for the tax revenues to increase by only 4 percent in the upcoming year. Taylor called the projection "moderately conservative." In addition, a number of grants that have helped the city cover its budget this year won't be available next year.
And while sales tax revenues may be soaring, other revenue sources have not performed nearly as well. The building use tax, levied on construction materials, is likely to bring in about $1 million this year, down from an average of $1.75 million in the last two years. Projections for 2001 predict similar numbers to 2000. In addition to the building use tax, the vehicle use tax has been bringing in less revenue.
At the same time, costs have increased. The city government's internal service charges and computer service charges are all up over last year, Taylor said. Internal charges are fees individual departments pay to cover telephone, insurance and front-desk costs. Computer service charges are for city computer costs. Both of those costs have gone up for next year. City health insurance, which is partially self-insured by city employees, has gone up dramatically in the past two years as well, Taylor said.
On top of all that, the city hasn't yet included the potential costs of Douglas Bruce's Amendment 21, to be voted on in November's election, in its budget proposal.
Bruce has proposed a $25 annual cut on a variety of local tax bills. Among those bills are utility fees collected from companies such as Yampa Valley Electric Association, AT&T Cable and Greeley Gas. The cuts would increase $25 every year.
Bruce is known for having authored the Taxpayer's Bill of Rights (TABOR) in 1992.
If passed, Amendment 21 cuts would cost the city $680,425 next year, most of it in franchise fees, Taylor said. Although Bruce asserts that the state Legislature would be obligated to pay the city back for its losses, the city isn't convinced. Hughes said he is prepared for the worst but is unsure of where he will be able to cut costs.
"What we're going to do is keep our fingers crossed that it does not pass," Hughes said. "And if it does, then on Nov. 8 we'll all be sitting down trying to figure out where we can get $680,000."
Regardless of the Bruce decision, Hughes recommended cutting some money from community support requests, which include a $200,000 grant match for the Visiting Nurse Association's new building on the Yampa Valley Medical Center campus. Neither Hughes nor Taylor would discuss which groups they think should not receive funding, leaving that decision up to City Council. The total amount of funding requested by community groups came to almost $2 million, about 10 percent of the general fund budget.
"While all of these requests are worthwhile, the city simply does not have the ability to fund them at the levels they would like," wrote Hughes in his budget summary.
Hughes also said that many of the capital projects that have already been put off will have to be deferred once again. He would not specify which projects would have to be cut from the budget, though he said the city has already recommended about 15 capital projects in the 2001 budget to be dropped, with more likely on the way out. Only one-third of the projects likely will be funded. Still, capital projects are likely to receive more money next year than they did this year. Among the projects likely to be funded are improvements to the City Hall building and five new wheelchair-accessible transit vehicles.
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