City: Subsidies too large

Council takes aim at Howelsen Hill, Ice Arena and Tennis Center

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As if the news inside Centennial Hall wasn't sobering enough Tuesday, the faces of some Steamboat Springs City Council members were further pained as they periodically refreshed market data on their laptop computers during a daylong hearing on the city's 2009 budget.

As the Dow Jones Industrial Average headed toward a 5.1 percent loss of 508.39 points - closing at 9447.11, it's lowest point in more than five years - council members directed tough budget cuts colored by their uncertainty about how long and deep the economic recession will be.

Fearing budget discussions could be just as difficult in coming years, council took aim at a number of areas of the budget described as unsustainable. Those included the city's heavy subsidy of facilities such as Howelsen Hill, Howelsen Ice Arena and the Tennis Center at Steamboat Springs.

Council directed its staff to set up separate enterprise funds for each of the facilities, which currently are budgeted within the Parks, Open Space and Recreational Services Department. Enterprise funds are managed separate from the city's general fund and are meant to be self-sufficient. Operating the three facilities as enterprise funds likely would require major shifts in their operations and fee structures, because they currently enjoy large government subsidies.

"Every single facility we're running at a deficit, with the exception of the golf course," acting City Manager Wendy DuBord said, referring to the city-owned Haymaker Golf Course that already operates as an enterprise fund. "It's just amazing to me that people think these facilities make money."

Howelsen Hill's subsidy is the largest at about $900,000 a year. According to the 2009 proposed budget, the cost to run the ski area next year is projected at $1 million, while only $130,000 in fees will be collected. The ice arena's subsidy is projected at $281,000. The Tennis Center's subsidy is harder to pinpoint in the proposed budget because it is budgeted under a parks division that includes other facilities. However, the $157,139 cost to operate the Tennis Center is more than double the division's total revenues excluding contributions to the Yampa River Botanic Park.

Also considered Tuesday were major increases in the city's fees for services. Among them was a 20 percent increase in the valuations used to calculate building-use tax and a new city building permit fee of $3.40 for every $1,000 in estimated construction value.

Also proposed were 50 percent increases in the city's water and wastewater fees. Under the proposed water fee increases, an average monthly residential water bill of $31.38 could increase to $47.07, and an average monthly commercial water bill of $64.24 could increase to $96.44.

City Council President Loui Antonucci said those increases might be too much too fast for Steamboat residents, but DuBord said years of taking that attitude have left the water and wastewater funds chronically under-funded. The infrastructure needs of the funds, DuBord said, have brought the city to a critical juncture.

"We have never raised (fees) to what we think they should be, but what we thought people would accept," DuBord said. "And we're paying the price for that."

In the most noteworthy move of the day, council directed DuBord and Finance Director Lisa Rolan to balance the general fund rather than use $1.9 million in reserves to balance the city's operating budget. As proposed Tuesday, the 2009 budget would have depleted the general fund's reserves by more than 15 percent, from $12.6 million to $10.7 million.

"I don't think that is fiscally responsible, because we don't know what is going to happen next year," Councilwoman Meg Bentley said. "We can be patient. What we can't handle is running our reserves into the ground."

DuBord predicted the move will mean a hiring freeze, no pay increases for existing city staff, the elimination of benefits for seasonal employees and layoffs. City Council was more willing to accept revenue depletion in the city's total budget, which includes capital projects and enterprise funds in addition to the general fund. The capital projects funds will decrease by $5 million under the 2009 proposed budget, but most of the expenditures are for public works projects that city officials said should not be put off.

"We have been doing a good job providing frills," DuBord said. "We have not been doing a very good job taking care of basic infrastructure."

"I don't really have a problem with what we're spending in capital," Antonucci added, "because if we don't do it now, it could increase in cost in the future."

- To reach Brandon Gee, call 871-4210

or e-mail bgee@steamboatpilot.com

Comments

mtroach 6 years, 1 month ago

I for one would like to know how many residents use the tennis center vs other "parks" . I'm not a big fan of paying to upkeep a facility that is not used by the greater population, and have never in my 18 years played tennis in steamboat. The subsidy for Howelson Hill has produced countless olympic athletes, and is an historical landmark. I hope the Council takes into account user numbers, and history when it starts cutting programs.

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challange1 6 years, 1 month ago

It is to bad that the city employees have to suffer because the city was reckless with their spending.

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seminative 6 years, 1 month ago

Does the city pay for the free summer concerts? As nice as they are for the residents and guests, maybe it's time to charge an entrance fee or cut down on the number of concerts. Times are tough and we need to cut back on the "luxuries".

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Kat Kelly 6 years, 1 month ago

So it's okay to send families away or into bankruptcy and applying for government assistance by firing city workers, just to be able to give money away to business running in the black, just because they did last year???

If your company decided it needed to fire you off to buy Bronco Tickets, how would you feel about their decision?

Remember, when you talk about "reducing staff" you are talking about families, just like yours? What if you worked for the City and they were talking about your job?

When you ask about the number of city employees five years ago compared to today, perhaps the more correct question would be to compare the ratio of city workers to the population. Were you here five years ago? How does the customer service compare now to then?

Maybe you should ask yourself if you would like to plow your route to work and recreation in the winter instead of the City and County doing it for you? or have to wait hours to be able to see a City or County employee, because he or she is now doing the job of 2 to 3 people? Or perhaps have to pay ride the bus or to park on Lincoln.

There are many services the City and County provide to the citizen's of Steamboat that are free to the public. Perhaps instead of looking to cut customer service aka fire City & County Employees, maybe we should start paying for those things we take for granted.

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Scott Wedel 6 years, 1 month ago

It is really annoying to hear that there are all of these problems with how the city and city services are budgeted and yet there were apparently none of these problems when the City bought the Iron Horse Inn. This is exactly why people hate taxes because there is no confidence that they are being spent wisely.

For many in Steamboat, parks and rec is considered an essential city service. And the City should cut all other depts as hard as they cut into parks and rec. Personally, I'd be upset if city depts such as planning is any bigger than it was prior to the construction boom and now bust.

Businesses have to let employees go when there is a slow down. Government should be no different. I would gladly accept a cut in customer service. I would gladly accept having to wait and set an appointment to meet with a city planner or whatever. I could live with my street, a side street, not getting plowed after every snow storm.

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Duke_bets 6 years, 1 month ago

Steamboat_Residential,

The population is similar to that of 5 years ago and technology is vastly improved, thus a drastic increase in employees over that same period of time does seem to be part of the budget issue.

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Fred Duckels 6 years, 1 month ago

Is the empty city bus system paying it's own way? With the pay and benefit package the city employees receive, I don't think a little overtime would be out of the question. My employees would be delighted with a package this good.

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ybul 6 years, 1 month ago

Come on now, getting rid of the police, that is a great idea. I got a good chuckle, as I am certain it was a joke.

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Martha D Young 6 years, 1 month ago

That the Howelsen Hill Ski Area is not even close to supporting itself financially came as news to me. Can the users of the hill pay a more realistic fee? What is the financial arrangement between the city and the Winter Sports Club? Are all the winter events at the hill subsidized by the city or totally paid for by the event promoters?
Our populace voted for increases in property tax mil levies for the library and the community center. Would an increase in property tax, which would affect citizens of all economic levels, be a reasonable solution to the problem of financial support for Howelsen Hill and other recreational venues?

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playa46 6 years, 1 month ago

It's crazy, this stuff is what tourists come for during Steamboat's winter season and summer season. I don't care too much for the ice rink (sorry guys) but I don't think I will survive without the Tennis Bubble and Howelson Hill. Is there any other way to pull money?

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Harvey Lyon 6 years, 1 month ago

I'd sure like to see what the "Howelsen Hill" budget includes. Are we talking the ski hill, all the cross country trails, or the riding trainls, the ball fields (Triple Crown), the skate board park, the volley ball court, the tennis courts, the howelsen hill lodge, etc etc etc. Howelsen Hill has a lot of services and details matter.

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JLM 6 years, 1 month ago

Some adult has to take charge of the process and do the obvious --- identify every money losing enterprise within the City and challenge its proponents to make the case for why it should be continued. Create a fair competition for capital among all City programs --- because that is exactly what it is.

Every business in America is tightening its belt and the City of SBS will have to do the same --- because doing nothing is unsustainable and because revenue is going to decline in 2009-10.

Change is in the air and it will be pervasive. They must start with what programs, positions, funding they can simply ELIMINATE. Then identify those they can DELAY. Then those they can REDUCE. Finally, those they can consolidate and generate MERGER EFFICIENCIES. The tools and techniques are simple --- no more difficult than 5th grade math.

The argument that capital spending is going to increase in the future is a bogus and naive concept --- the future does not get here unless we survive the present.

The economy is going to get very, very dicey from here on out as discretionary spending is going to evaporate for much of what makes SBS so attractive.

Move quick, more deliberately, move decisively but move now!

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ybul 6 years, 1 month ago

Why not lease the Ice Rink to someone to run it as a for profit business for $1/year +taxes,insurance, maintenance, plus some arbitrary value to ensure that when the roof needs replaced it is.

The Tennis bubble could have the same type of lease established.

Howelson, would be slightly more tricky to accomplish as it is such a financial loss, but who knows without looking at the budget.

Get creative, think outside of the box.

Pax

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