Local officials push for more conservative fiscal policy

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Ski Time Square sales tax

Sales tax collections

• 2007

Ski Time Square: $611,513

Total: $18,600,000

Percent of total: 3.3 percent

• 2006

Ski Time Square: $622,783

Total: $17,748,661

Percent of total: 3.5 percent

Source: City of Steamboat Springs

Where it comes from

City's combined revenues, in percents:

Sales tax: 44

Charges for services: 19

Intergovernmental revenues: 12

Use tax: 6

Other revenues: 5

Operating transfers: 3

Excise tax: 3

Franchise fees: 3

Accommodation tax: 2

Fines and forfeits: 1

Source: City of Steamboat Springs, 2008 Adopted Budget

Sales tax collections up

January sales tax collections for downtown Steamboat Springs leaped 18.26 percent from the same month last year, city figures show.

Sales Tax Auditor Lisa Erbes said the increase could be related to construction projects around the mountain, which could be pushing people toward downtown. Sales tax collections in the mountain area were up only 1.57 percent.

"I was comparing the January 2007 report to this year's and was kind of seeing a little bit of a flip-flop," she said. "Last year, comparing 2006 to 2007, the mountain was significantly higher."

Erbes also said Mainstreet Steamboat Springs has done a good job of promoting downtown. The group, led by Manager Tracy Barnett, works to preserve, promote and enhance the downtown area.

"Hopefully, it's the Mainstreet program," Barnett said, referring to the cause of the boost in collections. "Hopefully, it's what we're doing to make people come downtown. Not everybody skis, of course, so there are people out walking the streets."

Barnett also said some downtown stores are staying open later, giving folks more time to shop after they hit the slopes.

Steamboat's total sales tax collections for January were up 5.67 percent from the same month last year, figures show. General fund sales tax collections were up 7.39 percent from last year.

Most categories, including miscellaneous retail, lodging and restaurants, saw single-digit increases for January. Sales tax collections from sporting goods decreased 0.43 percent. Erbes said that drop was too small to be significant.

"It seems like it stayed pretty consistent; it seems that's reasonable," she said.

Steamboat sat in the middle of the pack when compared with other Colorado ski towns.

On the high end were Aspen and Winter Park, which saw sales tax collection increases of 13.73 percent and 12.65 percent, respectively, from last January. Breckenridge saw an increase of 1.07 percent, and Vail's sales tax collections rose 3.85 percent from the previous January.

Most ski towns saw increases - collections were down in Gunnison and Crested Butte - which is a sign that the industry is strong, Erbes said. She said figures can depend on which towns got snow and when. People planning January ski vacations often decide where to go based on December snowfall, she said.

Figures also depend on each town's goals, Erbes said.

"I know Winter Park's doing a lot of growth," she said. "For a long time, they've been more of a Denver-type local ski area, and they've been building more accommodations and whatnot to become more of a resort destination for travelers."

- Blythe Terrell

— The recession of the national economy and Steamboat Springs' heavy reliance on a somewhat unreliable source of income - sales tax - have many local officials calling for a more conservative fiscal policy for the city.

The city's reserves have received particular attention recently. The city's total reserves are more than $8 million, but that figure includes restricted reserves, or the amount the city is statutorily prohibited from falling below. The rest, known as unrestricted reserves, are estimated at between $3 million and $3.5 million, or about 11 percent to 13 percent of the city's general fund. Assistant Finance Director Bob Litzau said he would prefer to see unrestricted reserves as high as $8 million.

"I would agree : that our unrestricted reserves are too low," City Manager Alan Lanning said Monday. "I always like to see them a little bit higher."

What effect, if any, the state of the reserves could have on the city is yet to be seen.

"It's not a dire situation," Litzau said last week. "We are in no danger of not being able to pay bills or make payrolls."

But that doesn't mean the city won't have to make some tough decisions.

"I think it's really serious," Councilwoman Cari Hermacinski said last week. "You've got to cut spending. That's going to happen."

The progress of public improvement projects at the base of the Steamboat Ski Area may rely heavily on the Steamboat Springs City Council's willingness, or lack thereof, to further reduce the reserves. The improvement projects are paid for by money generated by the city's urban redevelopment authority, which was created in 2005. The authority issues bonds and, within its base area boundaries, receives property and sales taxes over a base amount to repay them.

The city's Urban Redevelopment Area Advisory Committee had planned to ask for a $1 million loan from the city's general fund to keep this year's projects moving forward until the next bond issue.

"With relying substantially on sales tax and with the economy doing what it's doing - which I don't think anyone can figure out - it makes me very uncomfortable to be talking about tying up a third (of the unrestricted reserves) in redevelopment," Litzau said.

This year's projects include a proposed roundabout at Mount Werner Circle and Apres Ski Way and design work for the URA's most anticipated projects: a promenade around the immediate ski base and the daylighting of Burgess Creek. Hermacinski acknowledged the base area projects are threatened, but said she would prefer to make cuts elsewhere before putting the brakes on the base area's facelift.

"That seems like a pretty high priority to keep going," she said.

Redevelopment Coordinator Joe Kracum said URAAC is working on a plan that would reduce the amount of money it will request from City Council. Kracum had planned to make the request at Tuesday night's council meeting, but has decided to wait until April 8. Construction was originally scheduled to start April 7 but has been pushed back three weeks. Kracum said that means work will continue until mid-September.

"We're looking at a little different strategy," Kracum said. "We want to see how the whole financial situation is looking."

The money being requested for the URA would be an unbudgeted expense, if granted. As for the city's budgeted expenses, Litzau said the city won't have to make cuts unless sales tax revenue fails to grow as much as expected. The 2008 budget is built on an expected 4 percent increase.

Recently released sales tax figures for January showed an increase of 5.67 percent, but some believe sales tax revenues could take a hit in coming months. Developers plan to demolish the entirety of Ski Time Square and Thunderhead Lodge this summer to make way for redevelopment.

The city had hoped for a phased approach to the demolition rather than one that will result in a complete loss of Ski Time Square's commercial component for about three years. In 2007, the city collected $611,513, or 3.3 percent of its total sales tax revenue, from Ski Time Square businesses. In 2006, the city collected $622,783, or 3.5 percent of its total sales tax revenue.

"For them all to go away at once will have an impact," Deputy City Manager Wendy DuBord said last week. "The economic indicators, at least in the near term, suggest that we should be conservative with our reserves."

Comments

another_local 6 years, 1 month ago

On the other hand, the approach they are taking is this case of stating that this is a good time to be conservative is something I agree with. Nice to see council taking the lead on this.

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jack legrice 6 years, 1 month ago

Here it comes. The private sector asking for a intrest free loan from the city. Where do I get in line for one?

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Matthew Stoddard 6 years, 1 month ago

One the other, other hand, where's the sales tax revenue going to come from to make up the difference over the next 2 years (at least) when Ski Time Square is completely torn down? That's a lot of shops contributing to our coffers that won't be there.

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another_local 6 years, 1 month ago

This nonsense about sales tax being "unreliable" gets annoying. Sales taxes, since they are % of sales are EXACTLY as reliable as aggregate business in the community which means they are MORE reliable than the cash flows of the individual businesses.

EVERY one of the businesses collecting that tax has to forecast and budget cash flow. While most businesses will wish for more revenue, you don't hear them whining about reliability! This is a fundamental required skill to run an organization whether public or private.

Just because sales tax revenue might dip during a soft period in the economy does not mean that we should be looking for other taxes to collect. It simply means that we should budget for the dip and tighten our belts. The statement that we should build reserves is right but I hope nobody is pushing for new revenue sources again. The talk about "unreliability" is just a smoke screen for an increase. Did you ever hear someone proposing a sales tax roll-back to go with property taxes they advocate?

A community that can spend millions on studies and consultants, build new community centers, libraries, justice centers, schools, bike paths, provides free buses, buys up open spaces etc etc etc DOES NOT NEED NEW REVENUE SOURCES!

Sorry for the shouting, I guess, but the public sector whining about the fact that they can only predict revenue within a few percentage points and that there are periods where revenue drops is just so annoying.

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jeannie berger 6 years, 1 month ago

What about all of the commercial space due to open up in the new buildings downtown, won't that replace the lost revenue from STS?

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Matthew Stoddard 6 years, 1 month ago

Those downtown places have to be finished, first, then a business has to be able to afford moving into there.

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bloggyblog 6 years, 1 month ago

by blog's estimate's, demolishing ski time square all at once will mean a sales tax revenue loss of about 1.8 mil. over the three year construction period.

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another_local 6 years, 1 month ago

People still need to eat. The sales tax that would have been collected at the Tugboat will simply be collected at the Old Town Pub etc. Much of the retail and rental will go to other locations as well. So, no, there will not be a 1.8 million decline in sales tax.

These things are not linear. We have added quite a bit of new retail over the last few years and more is coming on line this year and next. "making up" for lost revenue is an often overstated concern. How about the "lost revenue" from closing Levels due to structural safety issues in the building?

That area needs re-development. To the extent that the process will reduce sales tax in the short run producing, at worst, a flattening of the revenue growth it will be more than offet by the long term gains of a more vibrant area in the future.

In the mean time the building and use tax collected on the new construction will be a LOT more than any loss in sales taxes.

In the end there will be no lost revenue to the city in this process.

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Ed Miklus 6 years, 1 month ago

Has anyone ever heard of a politician that does the "push away exercise?" You push away from the public $$$ trough feeding the spend to the limit appetite. Like "The Field of Dreams...If we have it, let's find a way to spend it...and make that spending permanent. The Steamboat Springs municipal budget is enormous for a City of ten thousand even taking into account the tourist factor. The city sales tax is a negative incentive for local businesses. Need a big ticket item, go to Silverthorne, Denver or the internet. Perhaps a objective review of the municipal budget is in order. I know the concept of reducing the spending side of the ledger is foreign to most municipal governing bodies but maybe it's time that such a foreign, innovative idea be given a try. Economies anyone??

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kspork 6 years, 1 month ago

Just an idea... Why don't we pay some outside company, with no idea of what the microeconomics of a small town is, pay them a huge amount of money, and have a study done?

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JLM 6 years, 1 month ago

You just gotta cut SPENDING! Nothing else really works and nothing is more unlikely to happen. You gotta SAVE money. Notheing else really works and nothing is more unlikely to happen.

You gotta do without a bit to build reserves and then when you build them you gotta resist the temptation to spend them.

It's silly to think that tourists are not going to spend money in SBS regardless of what they are offered to spend it on. They will eat, sleep, recreate (meaning ski you dirty minded persons) and buy junk. That's what tourists do.

Want a solid local economy? Make SBS an attractive tourist destination --- like Switzerland.

And, hey, have a nice damn day! Cause it's gonna be all right!

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ybul 6 years, 1 month ago

Given that the Federal reserve injected $200 BILLION into the economy as a result of a shaky credit market. I think that just maybe that the city council acted with there better judgement. Also, I think they should encourage the developer to take a phased approach to redevelopment of the base area.

Build the cities reserves, invest those in a wind farm, and insulate the city from inflation. Given that Treasury Inflation Protected Securities are trading at a negative interest rate, it would be good to have a very strong economic plan for the city. An economic downturn could effect a tourist town more than other locals.

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another_local 6 years, 1 month ago

Good thing the city can't print money to cover deficits like the feds do or our last city council would have sunk us in debt worse than they did!

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SilverSpoon 6 years, 1 month ago

ybul, great wind farm idea. Lets think locally, TIC knows how to install wind turbines, so, with $8 million, buy 4-3MW generators, and put them on storm peak. Should be enough to power every resident in the city(ski towns use 2x the average, so maybe half of the residents).
Remember to be sensitive to the coal industry, maybe invest $4million in them, and keep the red air days strong in denver.

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bloggyblog 6 years, 1 month ago

blog thinks another local is probably right. the building tax in ski time square should compensate for loss of sales tax. I guess deep down blog is just having a hard time seeing so much change. blog also wonders if there's still gonna be room for a small fry like blog after the new steamboat is done. JLM, there's a resort in switzerland called Arosa. they have an automated transport system for getting arround. its like a giant battery powered roller-coaster!! SilverSpoon, don't forget the warning signs, so skiers don't fall in the turbine intake.

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SilverSpoon 6 years, 1 month ago

BORE, Once again, old news, 2005 rubbish: The first poorly sited wind farm, placed in world's highest density of nesting golden eagles breeding area. Back in the day, rotor blades spun faster, so, new technology is safer.

More old news for you to read, predates your 2005, before the bush admin started steamrolling the environment. http://www.fws.gov/birds/mortality-fact-sheet.pdf

summary cars- 60 millino wind turbine- 33,000 pesticide-72 million Domestic cats- 39 million

To save the birds, we need to kill the cats, quit farming, remove cars from the roads and to save the remaining 0.0193% of birds, get rid of wind turbines.

Bore, time and time again, your ideology gets in the way of reality.

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techno_babble 6 years, 1 month ago

I think this entire 'fiscal policy' debate is just the opening round to a "we need a city property tax" conclusion.

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contrarian 6 years, 1 month ago

^------ever seen a gerbil on a wheel in a cage.

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JLM 6 years, 1 month ago

Of course we are not in a recession. In the future? Maybe but even the worst data does not suggest NEGATIVE GDP growth rates just yet. A bit of a correction is a normal and even a good thing.

An interesting side note to unemployment rates is the size of the total work force. While a % is a meaningful arithmetic yardstick the more interesting thing can be the sheer size of the work force. It is a real measure of the growth of the economy. Our economy has been growing at a staggering rate over the last 25 years.

Further, there is a funny element of "normal" unemployment --- folks looking for jobs who are entering the work force, changing jobs because they simply want a change, geographical moves unrelated to employment (hey, all those folks moving to SBS), family related employment (spouses coming and going from the work force due to marriages, children, empty nests, etc.) and a level of expansion/contraction normal to the marketplace as businesses succeed and fail.

Many economists think this level of "normal" unemployment is approximately 5% which indicates that many regions are way "overemployed."

This is further compounded by the off balance sheet employment of part timers and illegals.

In any event, the country is fully employed though English majors will still struggle to find meaningful employment as poets in the near term.

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jack legrice 6 years, 1 month ago

Budget cuts so the URA can get a tax free loan. Who is in charge of the URA budget. If you can't work within it that is their problem. This is the private business sector who will benifit. Cari get a grip. That remark was an insult. Just keep pissing the money away. Maybe some day we will get a CC that knows fiscal resonsibility. That is just a pipe dream.CC was elected by the people but only listen to to what their special interests are.

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carlyle 6 years, 1 month ago

For those that care... The NBER, National Bureau of Economic Research, www.nber.org, defines recessions. The last recession had only one quarter of negative growth. While I usually agree with sbvor's comments, he is wrong on the recession definition. So is his source. Yesterday's tax receipt data for 2/08 was ~15bb lower than 2/07. Given the employment survey, not the household survey, it is a good bet that the NBER will say the US economy entered recession in November.

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contrarian 6 years, 1 month ago

Let me think. If I was Brandon Gee, would I prefer to be in the company of Warren Buffet or some spittle spewing critter named sbvor?

Monday, March 3, 2008 NEW YORK (Reuters) - Billionaire investor Warren Buffett said on Monday the U.S. economy is in recession and that stocks are "not cheap" despite recent declines...Speaking on CNBC television, Buffett said the economy is heading south even though gross domestic product has not yet fallen for two straight quarters, a definition many economists use to identify a recession.

Yup. I'd go with Buffet before some old dude sitting in his underwear and drolling on his keyboard in Hayden.

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contrarian 6 years, 1 month ago

Easy little fella. While holding your twinkie in one hand, try not to hit the caps lock key. It's impolite and bad form.
Got it dude? Ok. Now go ahead and lick the cream from your twinkie. Oh, by the way. Brandon is well within legitimate journalistic bounds in writing "The recession of the national economy..."
Wisely, Brandon does not claim any official government stats proclaiming a recession. But his statement is defensible given the myriad - indeed the plurality - of economists and Wall Street advisors who have noted that the economy is in decline. In other words, I suspect Brandon is not using the term recession in the strictest sense of the word, but as an accurate view of the current direction of the economy. Brandon is fine. As for you, well, your brain went into recession long ago.

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SilverSpoon 6 years, 1 month ago

svor, Lets look at the facts:

For additional evidence, see my posts in this thread bearing time stamps of:

March 13, 2008 at 11:24 a.m. March 13, 2008 at 2:03 p.m. March 13, 2008 at 2:33 p.m. March 13, 2008 at 9:44 p.m. March 13, 2008 at 11:33 p.m. March 14, 2008 at 12:28 a.m.

The time stamps reflect that you spend too much time blogging. Your work should filter out your ability to blog, then you could do your business a favor, and be a productive member of society. Also, there is a whole world outside of SS colorado, which is outside the scope of SS pilot and today.

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contrarian 6 years, 1 month ago

^------- someone call the men in the white coats!

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watchout 6 years, 1 month ago

Dear Community;

A lot of the optimism among the developers who have descended on Steamboat in the past 2 years has risen from the fact that Intrawest now owns the Steamboat ski area. Has anyone noticed that Fortress Investment Group, the investment group that owns Intrawest has had its stock price decimated in the recent stock and bond market turmoil? FIG [ticker symbol] came public at $24.00 , traded as high as $34.00 , and as of 3/14/08 is at $11.35. What does this have to do with Steamboat? On 3/31/08, we all may find out, when FIG holds a conference call with investors to discuss their 4Q'07 results and their outlook for 2008. Don't be surprised if FIG doesn't announce that the recent debt market turmoil has hit them hard and that they are cutting back on their 2008 and beyond spending plans . What does that mean for Steamboat? Maybe no more ski area improvements until the financial world improves. Overnight local real estate will hit a brick wall and then the trickle down effect will follow. Have fun and listen for that news on 3/31/08.

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SilverSpoon 6 years, 1 month ago

Inflation I can't wait for the economic stimulous check(reparations) I can be just like dave chapel, "i'm rich B----". Print more money, spend it on a tank of gas, watch your oil divendends increase, buy another tank of gas, get layed off.

Our economy is tanking.

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424now 6 years, 1 month ago

Hard hat in place I am here to report that the sky is still up there. I have seen snow falling but I can not confirm any sky falling. I will continue my villigant observation and report any changes to the condition of the sky. For Steamboat Springs Colorado this is 42 reporting.

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Matthew Stoddard 6 years, 1 month ago

Token- The Bore doesn't date except for online porn sites. Imagine that fat guy in the South Park World of Warcraft episode...but worse.

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ybul 6 years, 1 month ago

SBVOR,

in relation to your definition of a recession ((1) A recession is generally defined as 2 or more consecutive quarters of negative GDP growth:))

When one looks at this definition then you also need to take into account Inflation, when computing the facts, also you should take into account population growth in assessing what is actually happening.

 On the wind turbines.  Without doing any studies on the lay of the land, the rough terrain would imply turbulence and therefor mean reduced lifespan of a wind turbine.  Going to Moffatt or carbon county, IMO would still be local.

 The effects on the coal mines would be to extend their lives, as there is a limited resource in them and to decrease consumption would be beneficial.
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424now 6 years, 1 month ago

You really have mastered the art of the thread link.

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ybul 6 years, 1 month ago

Yes SBVOR, if we factor in inflation, which if you discount for Clintons hedonic adjustments and allowance's for substitution, inflation is running at much higher than the close to 4% it was reported at for last year.

The PPI was running at 10% last year, TIPS (treasury inflation protected securities) are so hot right now, they are trading at -.19% (last I heard a couple of weeks ago. If that does not let on that inflation is much higher than the 4% stated rate of inflation, you are smoking something good. Also, with the tear that Gold and silver are on right now 20% in a month or so, kind of lets you know the herd is catching on.

Then you look at the SS condo market, and see that their are close to 260 condos on the market, where as last year at this time, there were 30 or so (if memory serves me correctly).

Prudence, is something the council should be using today.

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