Steamboat Springs Record snowfall and soaring fuel costs have set both Routt County and the city of Steamboat Springs on a course to overshoot their 2008 budgets for transit and road maintenance.
According to a financial outlook report that county Finance Director Dan Strnad presented to the Routt County Board of Commissioners last week, diesel prices have increased to $3.65 a gallon, $1.51 above what the county budgeted for 2008. When annualized, the 70 percent increase results in a $225,000 increase in the county's 2008 budget for its road and bridge department. The cost of driving vehicles in the county's motor pool has jumped 21 percent higher than budgeted, from 47 cents a mile to 57 cents a mile. That increase puts the county on pace to spend $115,000 more than expected at year's end.
Similar factors are impacting the city's budget. Only four months into the year, the city already has spent more than 50 percent of its fuel budgets for both Steamboat Springs Transit and its street fleet of snowplows and other equipment. The city budgeted $208,500 for street fleet fuel in all of 2008, but already had used $132,658 as of April 30. SST has a $261,600 budget for fuel and had used $148,983 by April 30.
"I don't think it's going to get better," city Finance Director Lisa Rolan said. "I don't think we've hit that plateau for fuel. I really don't. It would be nice if we had."
At three Steamboat locations, commercially available diesel fuel was selling for $4.16, $4.19 and $4.26 Friday, according to AAA Colorado.
Budget overages would come out of city reserves, Rolan said, unless the city ends up saving money in other areas.
"At the end of the year, we'll have to look at where it stands to determine if it has to come out of reserves or can be transferred," she said.
Strnad said fuel is not the only product whose price is rising at an impressive clip. For example, Strnad said one ton of asphalt cost the county $45 in 2004. It now costs $105.
"We're talking some big-time increases here," Strnad said. "Our balance is really being affected by this."
Without a new revenue source, Strnad said, the county will not be able to maintain its existing level of service in 2009.
"Given our revenue sources, we're not going to get that," he said.
$2.3 million gap
County Commissioner Nancy Stahoviak said the commissioners will not take any immediate action on Strnad's report but said it will color their consideration of the 2009 budget. She also said she hopes the report will influence the work of a citizens' committee looking at options for improving county roadways.
The committee is being formed after a property tax increase that would have raised $3.3 million or more a year for road improvements and other capital projects was defeated by a 2-to-1 margin at the polls in November 2007. While a leading public criticism of the proposal was its lack of a sunset provision, Stahoviak said Strnad's numbers show the county needs a permanent increase in revenue to keep up with costs.
"The cost for the ongoing maintenance of our roads continues to escalate more than we can put in our budget to pay for," she said.
Strnad's outlook shows that if the county were to continue at the same level of service in 2009, its expenses would exceed its revenues by $2.3 million. Strnad said Routt County has had a policy of funding its road and bridge system 10 years into the future, but at its current level of funding, the county could only maintain its road and bridges through 2011 - or 2015 if bridges are excluded.
"That's five years we lost in just the first four months of this year," Strnad said.
Strnad said the budget crunch is occurring despite the county's healthy revenue increases from sources such as property and sales taxes. But the county's interest revenues are not increasing. Repeated rate cuts by the Federal Reserve have the county looking at a $450,000 decrease in interest revenue in 2008 and a $551,000 decrease in 2009.
"I've never really seen these kind of increases at the county," Strnad, who has been with the county for two decades, said of the skyrocketing costs. "This oil cost thing is just amazing right now. : My crystal ball - it just didn't do that good this year. That's all I can say."