Our View: Conservatism key to budget

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Editorial Board, May 11 through Sept. 21, 2011

  • Scott Stanford, general manager
  • Brent Boyer, editor
  • Tom Ross, reporter
  • Laura Schmidt, community representative
  • Jim Miller, community representative

Contact the editorial board at 970-871-4221 or editor@SteamboatToday.com. Would you like to be a member of the board? Fill out a letter of interest now.

As another local election cycle nears, it’s worth applauding the Steamboat Springs City Council and city staff for their continued pragmatic and conservative approach to budgeting and fiscal responsibility.

Despite one of the worst economic periods in city history, our elected officials and top city leaders have demonstrated how government should function from a fiscal standpoint. While many municipalities and states across the nation have depleted reserves or run up deficits, Steamboat Springs has managed its budget as it should — by setting conservative revenue estimates and making necessary and appropriate spending cuts without significantly affecting the core services that keep our city and its residents functioning and safe.

The council’s wise approach again was on display this past week when it suggested that Finance Director Deb Hinsvark revise her 2012 sales tax revenue projections to be 5 percent below 2011 projections. Hinsvark, who has impressed us in her role as head of city finances, had suggested 2012 revenue projections at 2 percent below this year.  

The city projected 10 percent year-over-year sales tax revenue declines in 2010 and 2011 after an 18 percent decline forecast for 2009. Those conservative projections, coupled with cost-cutting measures like postponed projects, employee furloughs and reduced staffing, have resulted in annual revenue surpluses.

According to the Steamboat Springs Finance Department, sales tax revenues increased 3.4 percent in July from the same month last year, marking the third straight month that Steamboat sales tax collections have increased from the corresponding month in 2010. Collections were up about 7.5 percent in June and nearly 2 percent in May.

The city collected $1,512,460 in July 2011 compared with $1,462,498 in July 2010. That brought year-to-date sales tax collections to more than $10.2 million — compared with nearly $9.9 million by this time in 2010 — which translates into a year-to-date increase of 3.25 percent.

This summer’s increases in tax receipts could tempt city leaders into loosening the constraints on the budget. But they’ve wisely chosen to plan for hard times and make prudent decisions about how to spend any excess revenues that materialize.

By deliberately underestimating revenues, City Council has had the luxury of revisiting its unfunded budget requests in midsummer and using sales tax receipts that exceed the budget to act on supplemental budget requests. That gives the city the flexibility to absorb the additional cost of removing snow from city streets in a record winter, for example.

No matter how individual council races are decided come Nov. 1, it’s appropriate to thank the current council for its effective fiscal leadership.

We would urge the next council to follow in the footsteps of the current council when it comes to fiscal policy.

Comments

Steve Lewis 3 years ago

As the election nears, it’s worth applauding the incumbents.

You guys at the Pilot just can't resist yourselves.

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rhys jones 3 years ago

lewi -- Please, we NEED the press, to guide us through these troubled times. Who else, but the self-appointed Guardians of the Truth, should we trust, to tell us what is right and wrong? What other motive could they have, besides what is best for all? We should trust the Pilot implicitly, in all affairs, after all, Truth is their job!!

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rhys jones 3 years ago

Pilot: Go ahead, strike that if you want, I'm getting bitter in my old age.

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1999 3 years ago

" their continued pragmatic and conservative approach to budgeting and fiscal responsibility."

HAHAHAHA

OMG

BAHAHAHAHA

I couldn't read too much more ...the tears in my eyes from laughing .........

hahahahahahahah

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Scott Wedel 3 years ago

It is silly for politicians to tell experts to go back and recalculate their numbers. If the finance director's best estimate is 2% decline then the City Council should not claim to be greater experts by telling the finance director that they had a different number in mind.

A more responsible action would be to simply decide they were not going to budget to 100% of revenues and instead put 3% of budget towards reserves.

And there is a self-serving reasons to not accept the best predictions and budget towards reserves because by writing a budget based upon a 5% decline gives them "excess revenues" to spend as free money when actual revenues exceeds the doctored projections.

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mtntrekker 3 years ago

Good thing we spent that $1M to buy the Orton land.

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BeCoolHoneyBunny 3 years ago

Really? Conservative? Really? Talk about short term memory.

Remember this headline? Steamboat closes Emerald land deal for $1.3 million http://www.steamboattoday.com/news/2011/mar/16/steamboat-closes-emerald-land-deal-13m/

From that article: Steamboat Springs City Council approved a purchase contract of about $1.3 million Oct. 19. The purchase includes a $600,000 Great Outdoors Colorado grant approved in December and about $755,000 from the city’s capital improvements fund. That fund faces shrinking reserves and is projected to have about $2 million available annually from 2013 until at least 2016. “There are going to be a lot of mothballed projects to do this,” City Finance Director Deb Hinsvark said in February, referring to the Emerald purchase.

That's almost 40% of the annual reserves for the capital improvements fund. Now city council wants to pay for that purchase by cutting more services (i.e. programs, staff, and maintenance).

I don't think anyone believes that buying that land, which by the way was already open to the public, was part of the "core services" the city wants to focus on maintaining.

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BeCoolHoneyBunny 3 years ago

"While many municipalities and states across the nation have depleted reserves or run up deficits, Steamboat Springs has managed its budget as it should — by setting conservative revenue estimates and making necessary and appropriate spending cuts without significantly affecting the core services that keep our city and its residents functioning and safe."

? Really?

Except that the city has run up deficits and has depleted reserves!

  1. They spent $755,000 from the capital improvements fund for the Emerald purchase (Orton Meadows land). Plus the fees for the grant and the master plan, those cost thousands.

  2. The city's volunteer firefighter pension is almost half a million underfunded right now. Cuts have to be made or revenue has to increase to cover this. If these firefighters start to collect soon, the city's in trouble.

  3. What is harder to see is that although most core services have been maintained to some level, what has been put off is maintenance to city properties. The dollar amount on deferred maintenance for the city is big $$. That will have to be funded sometime in the near future.

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