Steamboat Springs The Steamboat City Council wants to cut at least $1 million from its 2002 budget in light of the recent terrorist attacks and their effect on the tourism industry. But on Tuesday, the council decided its subsidy of tourism marketing will not make up a significant part of that cut.
In doing so, the city asserted that the best way to head off an economic slowdown is to try to promote the community and stimulate the tourist economy, rather than cut back in times of uncertainty.
"There's a lot more at stake here than there was a few weeks ago," said City Council President Kevin Bennett, who said the usual debate about whether the city should put its money into marketing tourism was no longer applicable.
Councilman Jim Engelken opposed the move, saying the subsidy was not appropriate if the city was cutting other items.
Eventually, the chamber's request for $699,000, which included money for the airline guarantee program, was cut by $79,000, a smaller drop than the city manager's recommendation. Part of the funding is based on city sales-tax performance and could be cut more depending on sales-tax receipts.
The council decided to postpone other major budget decisions for two weeks, asking city staff to come back with a trimmed-down budget even though staff has asserted that it has trimmed the budget down to its barest bones.
The only decisions the council did make were on the community support budget items, approving reductions or deferrals in expenditures for organizations such as the Yampa Valley Land Trust and Yampatika, in addition to the chamber. New community support requests were unilaterally cut.
The city will likely be cutting or deferring many capital projects as well, including the repair of a leaky City Hall roof and funds to complete the Steamboat Springs Community Area Plan, in its preparations for the worst. The city manager and finance director, with the help of city staff, already made more than $6.2 million in cuts to capital projects before the hearing.
Council members asserted that they would not be cutting from any areas that could threaten the safety of Steamboat residents.
The $21 million budget may be slashed by anywhere from $1 to $2 million after the council decided it could be looking at drops in sales-tax revenue as drastic as 5 percent to 10 percent if tourism numbers drop. Some members contemplated even larger cuts, asking city staff if it might be able to find 15 percent more to drop.
While most council members indicated that capital projects would be the first to go, others insisted on considering cuts in programs and, if all other options run out, personnel. Personnel budget cuts would likely come in the form of hiring freezes or decisions to not replace a position that has been vacated, and would be a last resort, council members indicated.
"If we are not able to meet our capital needs, we will have to increase revenues or reduce services," said Councilman Paul Strong. "This is the point where I might be cutting back on services.'
The council members invited ski area and banking representatives to speak and give them a better sense of how the economy may look in three months. Although all agreed it's too early to make any reliable predictions, the news pointed to the need for the city to become especially conservative with its projections.
"This is not the time for shooting from the hip," said Chris Diamond, the president of Steamboat Ski and Resort Corp., addressing the City Council at the beginning of the budget hearing. "Now is the time to understand trends."
He said the ski corp. is down 18 percent in reservations year-to-date and has seen a 35 percent decrease from last year in reservations through Christmas but has not seen a significant number of cancellations.
Through Christmas, prospects are somewhat gloomy, but after that, it's hard to tell, Diamond said.
The council will reconvene to discuss the budget again on Oct. 17 and will revisit cuts in the spring of 2002.