Steamboat City Council wrestles with potential tax surplus

City officials debate what to do with revenue

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— City officials gave initial support Tuesday night to allocating more than $600,000 in surplus sales tax revenues for deferred maintenance and operational costs but held back from allocating nearly $1 million more for less immediate needs, such as bike lanes and summer marketing, citing questions about spending funds that are based on projections and not in the bank.

All the allocations are subject to future Steamboat Springs City Council action in the form of a supplemental budget ordinance.

But a report by Finance Director Deb Hinsvark, projecting more than $2 million in surplus sales tax revenues this year and suggesting possible uses, spurred a conversation about fiscal policy.

City Council supported using surplus revenues for $195,000 in extra fuel costs, nearly $200,000 for snowplow and transit vehicles, and $45,000 for maintenance to the fire station on Pine Grove Road.

But City Council denied allocating $75,000 for summer marketing by the Steamboat Springs Chamber Resort Association.

The Chamber requested $200,000 during the 2011 budget process in fall but received only $125,000 and was seeking to fill the gap.

Council members Bart Kounovsky, Walter Magill and Jon Quinn voted for that expense, not enough for a majority.

The city has budgeted for a 10 percent decrease in sales tax revenues this year, compared with 2010.

March sales tax revenues were 8.6 percent greater than revenues in March 2010 and put the city in the black year-to-date at 2.4 percent more than total collections for the first three months of 2010.

Despite his vote for the Chamber marketing expense, which he called an investment that would bring returns, Kounovsky said it could be too early in 2011 to start allocating significant amounts of projected revenues.

“I’m not convinced that three months makes the year to start allocating these funds,” he said.

City Council President Cari Hermacinski raised similar concerns, citing the city’s ailing capital improvements fund and other financial challenges.

Also Tuesday night, City Council voted unanimously to direct city staff to prepare finalized revisions to the city’s noise regulations, which will enter the formal public approval process in coming weeks, starting with the Steamboat Springs Planning Commission.

Nighttime noise conflicts between bars and homeowners, downtown and at the base of Steamboat Ski Area, have caused debate in recent months about whether and how the city should address its noise regulations.

“There does have to be a balance,” Quinn said Tuesday. “There’s got to be some law that’s on the books that’s understandable, that’s enforceable — it’s our job to strike that balance.”

— To reach Mike Lawrence, call 970-871-4233 or email mlawrence@SteamboatToday.com

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