Balanced budget causes worry

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Agenda

4 p.m. Golf Committee interviews

5 p.m. Resolution reappointing Paul Sachs as the Steamboat Springs Municipal Judge and Jonathan Melvin as Deputy Municipal Judge; first reading of ordinance increasing city water service rates 50 percent; first reading of an ordinance increasing city wastewater rates 50 percent; first reading of an ordinance adopting a city building permit fee; motion to negotiate a new summer marketing contract with the Steamboat Springs Chamber Resort Association and to not renew the current contract; first reading of an ordinance adopting the 2009 budget

7 p.m. Public comment; Planning Commission report; Planning Commission referrals; City Council reports; staff reports; old business

The proposed 2009 budget that will be considered today by the Steamboat Springs City Council is drastically different than the one first presented to council members last month.

Through slight increases in revenue projections and major cuts in spending, city staff closed a gap between revenues and expenditures in the city's general, or operating, fund that would have depleted the city's financial reserves by $1.9 million. But the council's top two members say they still have concerns - and one of them may push for additional amendments to the budget that could reduce the city's projected revenues by $4 million.

In cutting their operating costs by about $1.8 million, the city took aim at a number of expenses. For example, city officials will be allowed to take part only in essential travel, training and meetings. The city's weekly City Page newspaper advertisement will be reduced to once every two weeks. The public safety budget will be reduced $295,059 through cuts that include leaving two police officer positions and one firefighter position open. The Parks, Open Space and Recreational Services Department's budget has been slashed by $425,488 through cuts that include the elimination or reduction of adult sports programs, decreased hours of operation for Howelsen Hill Ski Area and increased fees for programs and facilities. The elimination of previously proposed pay increases saved $404,251 in the city's personnel costs.

No additional cuts have been made to the city's community support spending beyond the substantial ones directed earlier this year. And a summer marketing contribution to the Steamboat Springs Chamber Resort Association that was set to be reduced to $225,790 in 2009 from $638,352 in 2008 was largely restored to $564,200 in the amended 2009 proposed budget.

Acting City Manager Wendy DuBord said the city will freeze eight to 10 unfilled positions and cut back on seasonal employees in the Public Works and Parks, Open Space and Recreational Services departments.

"We've also eliminated some positions in planning and public works that have to do with development and construction," DuBord said.

Neither DuBord nor Rolan would say whether any current city employees would lose their jobs under the proposed budget. In a letter to City Council, the city's employee committee wrote, "We wish to show our support of (DuBord's) diligent work to maintain a balanced budget, and in the process, keep all current employees and services."

"I hope this does it," Rolan said. "They wanted a balanced budget that doesn't use the reserves, and we've provided that."

The amended 2009 budget also includes increased revenue projections, which are the main source of concern for City Council President Loui Antonucci and President Pro Tem Cari Hermacinski. Despite a projected 4 percent decrease in the city's main source of revenue - sales tax - Hermacinski said the city is projecting its largest municipal services revenue ever. Hermacinski's calculations exclude use and excise taxes, which ebb and flow with the pace of construction and are devoted to the city's capital projects fund.

"There's not a single business in our community that's expecting revenue to go up," Hermacinski said. "So why are we?"

Hermacinski also noted the city overestimated its municipal services revenues by an average of 6.5 percent in 2007 and 2008. Depending on the justifications she gets for the revenue projections at today's meeting, Hermacinski said she might recommend slashing the municipal services revenue projection, excluding use and excise taxes, from $39.2 million to $35.2 million.

Rolan and Assistant Finance Director Bob Litzau said the revenue projections are appropriate and have increased largely due to proposed fee increases. Litzau also noted that council members will have an opportunity to revisit the 2009 budget early next year once the city has a handle on ski season sales tax receipts.

"I think the revenue we have projected at this time is appropriate with the understanding that we've already scheduled a work session in March to discuss it," Litzau said.

DuBord said any additional cuts would be extremely painful.

"It will be difficult," she said. "There's no fat. What happens now is you really start to cut into services."

The proposed fee increases include 50 percent hikes for water and wastewater service that have not yet been approved by council.

"I think it's not good policy to budget for it before your council has approved it," Hermacinski said.

And although Rolan said she has received no indication that council would deny the fee increases, Hermacinski said they would be difficult politically given the current economic climate.

"I think it's a really crappy time to increase water and wastewater fees 50 percent across the board," she said. "I wish they had kept up with these rate increases in past years so I wouldn't have to make these choices."

Despite staff cuts, Antonucci said he remains concerned with the number of full-time employees in the budget. Those include one new position each in the city's Human Resources and Information Services departments. DuBord said she would not consider filling those positions until March.

The city's entire proposed budget - which includes a capital projects fund, enterprise funds and other funds in addition to the operating budget - shows revenues of $46.7 million and expenditures of $56.5 million. The largest deficit spending is in the capital projects fund, where council members believe the depletion of reserves is necessary to ensure that vital infrastructure projects are completed in 2009. The budget ordinance is up for its first of two readings tonight.

- To reach Brandon Gee, call 871-4210

or e-mail bgee@steamboatpilot.com

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