Steamboat Springs The Steamboat Springs City Council cut planned 2012 Capital Projects Fund spending by about $700,000 because of concerns about the fund’s low balance.
Projects proposed as part of the fund were presented to City Council members Tuesday during the 2012 budget presentation. The more than $4.2 million in expenditures proposed for 2012 would leave a $1.3 million Capital Projects Fund balance.
The city’s proposed 2012 budget includes a general fund with expenditures of $24.6 million, nearly $2 million more than what the city expects to spend this year.
Capital projects historically are funded through building- use and excise taxes related to development, which City Council President Cari Hermacinski said she didn’t expect to return anytime soon. She expressed concern that spending down the Capital Projects Fund for anything less than “core government services” would make it difficult for the city to meet its obligations in the future.
Because capital projects can take years to fund, they often are added to the city’s Capital Improvement Program, which looks several years into the future.
Hermacinski said future obligations included Iron Horse Inn debt payments, which start at more than $433,000 in 2013, and $5 million in existing maintenance projects.
“We have a $5 million problem today that we’re going to try to solve over 15 years while at the same time adding additional facilities that are going to have deferred maintenance,” she said.
This City Council’s economic development policy, which was adopted this year, stipulates that Steamboat rid itself of ongoing maintenance issues.
City Council members voted unanimously to delay indefinitely a $50,000 project to install dog fencing at Whistler Park, adding it to a list of future projects. They voted unanimously to re-evaluate spending $345,000 in Colorado Lottery Conservation Trust Fund dollars on lighting, communication and timing equipment at Howelsen Hill and for the city-owned ski hill’s Centennial Campaign projects.
They also voted 5-2 to freeze $300,000 in city funds to use as leverage for a $1.5 million grant that would help pay for a road to the new Bear River Skatepark as well as other improvements. Hermacinski and council member Jon Quinn opposed the motion.
City Council member Walter Magill argued that the skatepark site could become an amenity for west Steamboat as the planned Bear River Park, which also was slated to include ball fields.
“I think it’s a community investment, and I think you’re right, it does take long-term maintenance, as does anything,” he said.
Council member Scott Myller added that the project would create the necessary access for emergency service vehicles, which currently use the Yampa River Core Trail when responding to a call.
City Manager Jon Roberts said the development-related funding sources for the Capital Projects Fund weren’t financially sustainable long term.
“I do not think that that formula or structure will work going forward for 10 years,” he said, suggesting the city needs to look at how it funds capital projects or curtail them.
That’s part of the reason why the city’s 2012 budget will start to look at what Finance Director Deb Hinsvark called “long-term strategic considerations.” They include privatizing operations, finding new revenue sources, restructuring, replacing manual operations with technology, collaborating with other organizations, reworking existing contracts and leasing rather than purchasing equipment.
Hinsvark added that in the near future, Steamboat’s reserves were in good shape. She said the city projected 2012 year-end reserves to exceed $15.7 million, $9 million of which are unrestricted.
While Hermacinski was concerned about using reserves, Quinn said he didn’t think it was true deficit spending.
“Looking at the unrestricted general fund reserves we’ll have at the end of 2012,” he said, “I think we’ve done a fine job with this budget.”