Council faces budget crunch

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— A slowing economy and a decrease in tourist activity could mean tough decisions for the Steamboat Springs City Council as it prepares its 2009 budget in coming months.

In a presentation to City Council at its meeting Tuesday night, city finance staff members said they project a 4 percent decrease in revenues next year, even as demand for services, affordable housing costs, inflation and transportation costs will rise. That could mean trouble for the money council approves for noncity expenses, otherwise known as community support spending. Community support spending goes toward organizations such as Yampa Valley Recycles, Seminars at Steamboat, Strings Music Festival and the Steamboat Springs Arts Council.

Finance Director Lisa Rolan said the local economy is heading toward recession, if it isn't already there.

"Ultimately, this is going to result in a tougher year and tougher decisions that we're all going to have to make," Rolan said.

The city's main source of revenue, sales tax, has not declined this year, but its pace of growth is well off from 2007. Officials expect sales tax to turn the corner and start declining next year. The city budgeted for $19.34 million in sales tax revenues this year. For the 2009 budget, they will assume a 4 percent decrease to $18.57 million.

"Something's got to give," Deputy City Manager Wendy DuBord said. "We haven't had to do this kind of cutting in a budget for a long time."

Rolan touched only briefly on the controversial subject of community support spending - a relatively small part of city spending, but a personal issue for many Steamboat Springs residents. The city devoted $1.77 million, or 6.44 percent of its general fund budget, to 31 groups in the 2008 budget. Forty-six groups are requesting $2.32 million for 2009, which would be a 31 percent increase from this year.

"Thanks for the good news," City Council President Loui Antonucci joked after the presentation.

Antonucci also reiterated Rolan's claim that 2010 may prove even more challenging.

"I really believe we haven't seen the worst of this downturn in the economy," he said.

Assistant Finance Director Bob Litzau identified other areas of financial concern for the city, including utility fund reserves that have declined from $5.36 million in 2006 to $1.2 million in 2008.

"The reserves in these funds are getting dangerously low," Litzau said.

Also Tuesday

City Council went into executive, or secret, session at the end of its meeting to discuss the contract of City Manager Alan Lanning. Lanning, whose future with the city has been called into question after an evaluation by council last week, did not attend the public portion of Tuesday's meeting and it is unclear whether he was present at the secret session.

Executive sessions are legal in Colorado to discuss personnel matters. City Attorney Tony Lettunich listed two other justifications - permitted under state law - for the session: "conferences with an attorney" and "determining positions relative to matters that may be subject to negotiations; developing strategies for negotiations; and instructing negotiators."

Councilwoman Cari Hermacinski said Monday that a public discussion of Lanning's future will be held during next week's council meeting.

Comments

simplysaid 6 years, 5 months ago

About 6 months behind but finally the truth. Ski resort towns are luxurys and among the first to get cut back if not totally cut off in tourist budgets. Fuel prices will likely whack flights even though they currently so no.

Now we need to get the point across to local realtors. They are refusing to bring prices down and hold to the old economy pricing with a death grip. Todays a new day our future looks some what bleak due to the mortgage meltdown/credit crisis/gas gouging. However painful cutbacks now (and not just community goodwill dollars) will make some upset but we need to protect our basic needs to function as a town/community and by pass the rest. If its a mistake we end up with an overflow of saved funds. Whats wrong with saving to much back?

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ColoradoNative 6 years, 5 months ago

Let's start by cutting the socialist housing programs. If prices are coming down then homes will be more affordable right?

Simplysaid buyers/sellers set the prices for homes. It's called suppy and demand.

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another_local 6 years, 5 months ago

simplysaid, Realtors "are refusing to bring prices down"? I guess you have never bought or sold property. Realtors do not set prices, sellers and buyers do. Brokers are happy to have lower prices if that makes things move since they don't get paid unless there is a sale.

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sbspassion 6 years, 5 months ago

It is irresponsible to say in a public forum that if we aren't in a recession we are headed toward one. Government serves its people, and it's servants should not be making comments that have no validity. We are all adjusting: we enjoyed the goods times, now lets work to get through the hard times. Our future is bright.

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