By the numbers
Mountain town December sales tax decreases
Vail: 6 percent
Steamboat: 9 percent
Glenwood: 10 percent
Breckenridge: 10 percent
Winter Park: 14 percent
Aspen: 19 percent
Steamboat Springs You know that finances are tight in Steamboat Springs when even reductions in snowplowing are discussed as a possible budget cut.
On the heels of four straight months of sales tax declines - with drops of about 9 percent in November and December - city officials now treat it as a certainty, rather than a possibility, that the city will have to reopen its 2009 budget to find considerable savings. Last week, Steamboat Springs City Councilwoman Cari Hermacinski said the city could be looking at a cut of at least $2 million; interim City Manager Wendy DuBord said cuts could amount to 10 percent of the city's $56 million budget.
"It will be millions," DuBord said, "and we will have several options on the table."
The city already cut about $2 million from its 2009 budget last year in an effort to balance it without using reserves. Councilman Scott Myller said he would hope to make the additional cuts without dipping into reserves, but he doesn't know whether it will be possible. Myller also said that although he thinks the city was successful in making its first round of cuts largely unnoticeable to most residents, the second round of reductions probably will be conspicuous.
"We're tracking everything we can, but we know at this March meeting, we're going to have to make significant cuts," DuBord said, referring to a March 10 City Council meeting. "And it's going to impact residents. The easy stuff, we already cut. The cuts that we make from this point forward will have significant impact to programs and services that we currently have."
Myller also agreed that everything is on the table. At his own business, West Elevation Architects, Myller said business is down, and he has had to lay off employees, giving him little hope that the city's revenue figures are going to improve in January or February - or 2009 at all.
Some of the most significant - and painful - cuts will come from the city's spending on personnel. In addition to layoffs, options include benefit reductions, unpaid vacations, job sharing, flex time and a reduction in the city's hours of operation at some facilities.
"We'll have to do a cost-benefit analysis because you don't want to shut down a facility that covers its costs," DuBord said.
The city already has frozen 11 open positions and eliminated three. Last week, incoming City Manager Jon Roberts said he won't necessarily fill two open department leader positions in the finance and clerk's office. DuBord said she looks forward to any other ideas Roberts, who starts work Tuesday, might have.
Comparing mountain towns
Of the five other mountain communities Steamboat compares itself to for sales tax purposes, only Vail, at 6 percent, had a smaller decrease in sales tax than Steamboat. Aspen's decline was the highest, at 19 percent.
The city is watching these other communities closely to see how they are handling similar challenges. The Vail Daily reported last week that the Vail Town Council soon will cut $1 million from its budget.
DuBord said Steamboat is in a stronger position than other mountain communities because of steps it took last year. The city began freezing positions as early as September, did not give raises to any of its employees and, in addition to not using reserves to balance the 2009 budget, the city also increased its financial policy reserve from 15 percent to 20 percent.
"We've been a little more conservative actually than any other community," DuBord said. "We have a very healthy reserve. : That puts us in a stronger position than we've ever been in the past, in terms of operational reserves."
Interim Finance Director Bob Litzau said that on March 3, the City Council will finalize a prioritization of city services it has been working on for months to help guide budget reductions. The prioritization formula is based on City Council and city management staff's ranking of every city service based on demand, financial sustainability, whether the service is mandated and how it influences six core goals such as quality customer service and maintaining service capacity.
The highest priorities and areas that will be most immune to cuts, DuBord said, are traditional government services such as public safety, utilities and snowplowing. However, she said slight reductions to the latter are indeed possible.
"March 10 we hope to have several alternative budget plans for council to consider," Litzau said.
The March meetings will focus on the city's operational budget; a similar council meeting has been scheduled in April to discuss its capital projects budget.
"We've already, on an administrative level, held back on any major purchases," DuBord said.