Steamboat City Council debates using reserve funds to balance 2013 budget

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— At a budget workshop Tuesday night, some Steamboat Springs City Council members saw a proposal to reduce free bus service as a possible route to balance the 2013 budget.

Others on the dais said the $725,000 cut was unnecessary and could be mitigated by tapping into the city's reserve funds.

“Why are we going after the services and products so hard when I don't think we need to right now?” council member Kevin Kaminski asked.

The philosophical debate about whether to cut services or continue saving reserves for future years guided much of the council's preliminary budget workshop. By the end of the session, many council members advocated for enacting a combination of cuts and service reductions to make the 2013 budget work.

The city is working to eliminate a $611,000 deficit from its budget before council approves it next month.

Included in the deficit are the city's requests to spend $192,717 next year on raises for firefighters and paramedics, $163,732 on deferred maintenance projects, $283,511 for a cost-of-living adjustment for employees and $176,437 from the general fund on capital projects.

The council decided last month to spend $330,975 of reserve funds on a debt payment for the Iron Horse Inn.

At the start of Tuesday's budget hearing, Steamboat Finance Director Kim Weber told the City Council there are three ways the city can bridge the funding gap and stick to its conservative budget. She said it can use this year's budget surplus that is estimated to come in at $1.3 million, pull from the city's unassigned reserve funds or reduce service levels.

Weber then presented the council with a list of possible service reductions the city could enact next year to close the funding gap. They included the proposal from the city's transit department to consolidate some of its bus stops and cut low-frequency lines as well as an option from the city's Parks, Open Space and Recreational Services Department to cut all recreation programs to save more than $100,000.

Council members then debated whether they should embrace cuts or pull from the city's unallocated reserve fund that totals $9.7 million.

“I don't think I want to make this major slash to transit,” council member Walter Magill said. “I don't think we want to impact our visitor experience to show we can cut the budget.”

But council member Cari Hermacinski advocated for continuing to build up the city's reserve funds for a rainy day.

“We're making tough choices for 2013,” she said. “We knew five years ago they were going to come. We do have some reserves, but let's remember there are still some upcoming challenges in the future.”

At a meeting last month, council decided to plan conservatively for the 2013 budget, but not all members agreed on how conservatively. They then voted to budget flat compared with the 2012 projected budget.

Council will resume its budget discussions next month.

To reach Scott Franz, call 970-871-4210 or email scottfranz@SteamboatToday.com

Comments

Scott Wedel 2 years, 3 months ago

Instead of an honest budget we get one with two fundamental lies. They decide to budget "conservatively" and budget according to a zero percent increase in sales tax despite best guess of a couple percent.

Thus, since they are actually expecting more revenue than in the budget then they are willing to create a budget spending from reserves because they expect revenues to come in high enough so that reserves are not actually spent.

The consequence of these pair of lies is that it creates a fiction that no revenue growth is expected. Thus, if revenues actually come in less than expected and show 0% growth then they can pretend there is no reason to make budget cuts. And it allows some members of City Council to press for additional spending if actual revenues come in as expected 2% higher.

If there is really zero revenue growth then it would be crazy to accept spending a million of reserves (Iron Horse plus general fund). That would allow spending from reserves when the next year's budget is millions out of balance.

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rhys jones 2 years, 3 months ago

If they cut bus service, they will make more on DUI's. Win-win. What are they thinking?

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