Paul Hughes: Cut back spending

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— As I listened to portions of the City Council's budget retreat, I heard predictable tales of financial gloom and calls to cut back drastically on city spending. I'd like to offer a counter proposal that makes more economic sense than deep cuts: continued, judicious spending.

Our local economy desperately needs money to flow through it. The city is one of the region's major economic engines, both in number of people employed (about 300) and in money spent annually (about $35 million). As I recall, some 70 percent of the city's spending goes to local businesses, and city employees spend their salaries here as well. During the past 20-plus years, I've been told by more than one business that it was its sales to the city or town that kept it going through difficult times.

I'm not suggesting that the city is a small-scale version of FDR's WPA, but I am saying that the city's spending is very important to everyone who lives and does business here. Currently, the city is sitting on some $10 million of reserves that came from those it serves - residents and visitors. This is a good time to give some of that back by supporting local businesses. The last thing the city should do is take money out of the local economy. Instead, it should gauge just how and where it should spend some reserves to help keep our economy chugging along. Notice that I said "some" reserves, not all or even a lot. But to shut down, cut back, lay off, etc., will only exacerbate what is already a scary situation. The city has a positive role to play during these tough times, and I'd like to see it do its part.

Paul Hughes

Steamboat Springs

Comments

Richard Levy 6 years, 2 months ago

I'd have to agree with Paul. The City's reserves were created for times such as these. So if not spending some of these reserves now, when?

Step 1- cut the fat (including some community support) Step 2- ensure vital city services continue. Step 2a ensure that departments that "pay their own way" through fees remain fully staffed.

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JLM 6 years, 2 months ago

The basic principle of balancing revenue and expenses is a fundamental requirement of the "management" of any enterprise. A city must be managed within certain recognizable parameters most importantly within the revenue it can reasonably expect to generate and sustain.

Ignoring the realities of economic contraction amounts to fiduciary mismanagement. The storm clouds on the horizon are very clear. The challenges are very real.

In life, as in business, "what we measure, we manage."

The City of SBS has not been measuring the efficiency of its operations. At this second, it does not know what its staffing expense is as a % of revenue or its staffing FTE is compared to local population. This is called "analytics" and is a way of measuring performance by creating parameters that suggest course corrections in an obvious and analytical manner. It's not a lot different than weighing yourself every morning.

Let the numbers suggest the answers and don't pre-judge the conclusions.

If staffing expense has ballooned, then trim it. If enterprises have become sinkholes of expense, then fill them or close them down. But, for goodness sake, manage them based upon real world information not some "feel good" ideas.

The economy is getting ready to get very, very ugly. Credit is going to dry up. Real estate values are going to be depressed. Unemployment is going to rise precipitously. Discretionary spending --- on things like travel and skiiiiiiiiiiiiiing (kind of a bad combination for SBS, eh?) --- is going to dry up.

This is going to be exacerbated by an ill advised increase in the taxes of the very customer profile who comes to SBS.

This storm is a standing lenticular cloud and a tsunami all rolled into one.

In 2006, some smart folks could see that Fannie and Freddie were skating on thin ice. When the siren was sounded, folks simply ignored the opportunity to shore up the balance sheets of both. We are now paying the price for this mismanagement. Don't allow SBS to be wrecked by inattention and fiscal cowardice in the face of reality.

This is not a "check up", this is a freakin' intervention.

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