Crews install a pedestrian footbridge in 2011 that connected the Yampa River Core Trail in front of the Depot Art Center to West Lincoln Park. In her state of the city report, City Manager Deb Hinsvark suggested that the city will need a more reliable source of revenue for future capital improvement projects.

File/John F. Russell

Crews install a pedestrian footbridge in 2011 that connected the Yampa River Core Trail in front of the Depot Art Center to West Lincoln Park. In her state of the city report, City Manager Deb Hinsvark suggested that the city will need a more reliable source of revenue for future capital improvement projects.

As Steamboat Springs' capital needs grow, city manager suggests new revenue source may be needed

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— In her first state of the city report, City Manager Deb Hinsvark praised the city's continued financial strength but suggested the city someday will need a more reliable source of revenue to fulfill a long and growing list of capital needs.

She said the current system of depending mostly on new development to maintain and improve the city's infrastructure is a community issue.

“We're moving forward, and the economy is growing, but we've got infrastructure that's aging and no real way of addressing the needs,” she said Tuesday.

Capital projects in the city currently rely mostly on funding from grants and building use and excise taxes that are generated from development.

When that isn't enough, as has been the case during the recent downturn in which development slowed, more money was needed from the general fund.

Hinsvark said the grants and taxes from development have “a potential end of life” that leaves the capital projects fund “very vulnerable.”

She added that she hopes the issue is something the Steamboat Springs City Council and the community start talking about this year.

Most cities in Colorado can count on revenue from a property tax that is dedicated to capital projects.

Hinsvark said that according to a count she got from the Colorado Municipal League, Steamboat is only one of four municipalities in the state that does not collect a property tax.

Its general fund mostly is supported by a 4 percent sales tax.

In 2012, the city started prioritizing its six-year capital improvement program based on how much funding was projected to be available and put projects that couldn't be funded on a “parked projects” list.

The six-year capital improvement program approved by the council last year includes $46 million worth of projects through 2019 and is headlined by the construction of a new police station.

But the city's list of parked projects is far more substantial.

It includes millions of dollars' worth of sidewalk improvements, $8.1 million in improvements to infrastructure on Yampa Street, a $1 million project to add shoulders and bike lanes to Burgess Creek Road and $4.4 million worth of extensions to the Yampa River Core Trail, among other things.

“There's just so many capital needs right now, and it's not just building new stuff, it's taking care of what we have,” she said. “We can only do so much right now.”

Hinsvark said the future funding of capital projects could be something the City Council discusses when it considers the six-year capital improvement program again in the fall.

In her report, Hinsvark also touches on the city's reliance on sales tax, saying it isn't uncommon for municipalities.

However, she said with such things as a new look at affordable housing, aging infrastructure and more demand for transit services “there is concern about how much fiscal pressure the city's (sales tax) can handle."

She noted that Glenwood Springs and Steamboat collect the same amount of sales tax, but Glenwood Springs also has a property tax of 5 mills.

She said that same amount of a property tax in this city would increase general fund revenue by $3.5 million and it “would still be one of the lowest-taxing areas in the state.”

Whether the city should change its tax structure has been a topic of discussion in recent years, with two volunteer committees not recommending any changes.

The outlook on funding for capital projects and the comparisons to other city's revenue sources were highlights of Hinsvark's report that concludes the finances of the city currently are strong, and Steamboat weathered the economic recession without having to dip into reserves.

The city recently had its credit quality upgraded, and sales tax, the city's primary revenue source, continues to show steady growth.

The report was one of three Hinsvark presented to the City Council on Tuesday night.

Council members did not offer much feedback on the reports, but some members said they would want to discuss them at future meetings.

Other agenda highlights from Tuesday's council meeting

Performance review: The council conducted Hinsvark's annual performance review in executive session. Immediately after the review, the council agreed to meet in two more executive sessions in April and May to discuss personnel items. Asked about the additional executive sessions, council President Bart Kounovsky said the closed meetings would be related to the city manager but wouldn't comment further. The additional executive sessions come as some council members have said they'd be willing to meet more in the closed sessions to discuss sensitive items regarding personnel or real estate transactions.

Goal setting: The council agreed to hold a work session April 15 to discuss and identify measurable goals the body would like to accomplish by 2015.

Coffee with council: Council members had mixed feelings about Scott Ford's idea to start a new informal series of monthly meetings with constituents over coffee. Members Tony Connell, Walter Magill and Sonja Macys praised the idea and said they'd be open to starting a new way of engaging with the community. Council President Bart Kounovsky said he was "lukewarm" to the idea and was concerned about the time commitment.

Kenny Reisman also said he saw "certain limits on my time."

Reisman and Kounovsky said they thought they already were accessible and meeting with constituents at community events.

The council agreed to discuss the idea further at its next meeting.

To reach Scott Franz, call 970-871-4210, email scottfranz@SteamboatToday.com or follow him on Twitter @ScottFranz10

2013 State of the City Report

2013 State of the City Report

Comments

scott bideau 6 months ago

The list of projects (core trail, new police station, etc) all seem to be "nice to haves," not absolutely necessary.

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Thomss Steele 6 months ago

Nice try Deb... No way we are going to be taxed on our land here in Steamboat...

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Scott Wedel 6 months ago

And no requirement that City must have revenues to do all these nice projects at the same time. If city council can control spending on other items then soon enough there could be the money for these projects.

Good news is that Colorado requires a public vote on tax hikes so a proposed tax hike is a nonstarter.

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mark hartless 6 months ago

Municipalities almost always spend their revenue on the "nice-to-haves". Then they come back to taxpayers and have the nerve to look them right in the eye and ask for money to fund the things they then claim to be "top priorities"; usually with phrases like "...it's for the children..." or "... CRITICAL infrastructure..." . This is a tried-and-true method of "revenue enhancement". After all, they are generally dealing with a local electorate made up of suckers and of those who gain disproportionately to their own personal outlays required by those additional revenue enhancement "ideas".

That they do this is no surprise. That taxpayers fall for it over and over and over reflects on their naivete.

Also notice the second paragraph of the story. When your community is hostile to growth you WILL eventually have revenue problems. When you spend primary dollars unwisely, those chickens come home even quicker.

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mark hartless 6 months ago

They not only do that, Steve. They raise taxes on building materials, tap fees, etc. They advocate for stricter (read more expensive) building codes and support "open space" and conservation easements; all of which drive prices through the roof.

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Neil O'Keeffe 6 months ago

We have many second and third homes/condos in the city that are occupied only a few months of the year. The Colorado Homestead Act does not address property taxes but what if it did? What if primary residences within the city could be exempt but the vacation condos/homes were subject to a minimal property tax? After all they use the same roads/services that we support with our county property taxes only for free. I'm sure there are too many road blocks to keep this from happening and maybe a very logical reason as to why it hasn't been considered, I also wouldn't expect that the real estate sector would be too supportive. Enlighten me!

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mark hartless 6 months ago

Many of those folks with the second homes don't have kids in Steamboat schools. They don't use the roads more than a few days/yr, and when they ARE here they spend disproportionnate sume of money into the local economy. Seems like the last thing you'd want to do is drive those type folks away.

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cindy constantine 6 months ago

How about if the city just pursued all the lodging tax owed by owners using their homes/condos for short term rentals, like VRBO listings, etc. I am sure that would add up to thousands of $$.

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rhys jones 6 months ago

Fortunately we have TABOR and any tax increase must be approved by the voters; unfortunately, as Mark points out, the voters are often duped by the claimed necessity of this new tax, and there have been many.

Our poor public servants are getting rich already on our hard-earned money, laughing at us behind our backs, for funding their party. They take care of their own, first and foremost. The salaries of most middle- and upper-management are OBSCENE.

I say vote NO on whatever bill of goods they try to sell us this time.

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bill schurman 6 months ago

Tabor is in Court and may well be ruled unconstitutional.

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Scott Wedel 6 months ago

You talking about Kerr v Hickenlooper? A claim that requiring the voters approve tax increases is anti-democratic? That is a long shot because they are asking a federal court to rule that Colorado initiative has made Colorado insufficiently a republican form of government by giving too much power to the public.

And overruling TABOR would also set the grounds to invalidate every voter approved initiative in Colorado's history. No way the court is going there.

Assuming the court is willing to step in and not dismiss, I could see a ruling that says something about how the courts could handle a future Colorado where voter approved spending initiatives lack the money due to voter approved tax hike limitation (TABOR).

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Neil O'Keeffe 6 months ago

Mark, it has no ill effect throughout Florida as second homeowners pay a higher property tax via the Homestead Act than do primary residences. You really think those owners having to pay a couple hundred dollars more a month will take their homes elsewhere? Not likely.

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rhys jones 6 months ago

I could relent on this issue if any new taxes were levied on second (and absentee) homeowners only and not primary residences...

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Dan Kuechenmeister 6 months ago

The city says we need more revenue. Is it possible they could cut spending?

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Scott Wedel 6 months ago

Dan, that may be the dumbest question you ever asked.

Odds of "could cut spending" is about the same as picking a perfect bracket and winning a billion dollars. Come to think about it, a billion dollars is about what it would take for city government to say they now have enough money for all of their projects.

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Dan Kuechenmeister 6 months ago

Scott, dumb - yes. Wishful thinking - you know it, Rhetorical - absolutely

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Scott Wedel 6 months ago

And reading the city manager's annual report is deeply disappointing with over half of it looking at the property tax rates of other cities.

The lack of objective analysis and the lack of providing alternatives shows a city manager of limited capabilities and greatly biased towards tax increases. Okay, SB's financing of capital improvements is largely ad hoc and ends up mostly being the difference of what is budgeted vs actual revenues. But only a person deeply philosophically addicted to tax hikes would suggest that argues for a property tax. Seems to me that the most obvious solution would be to budget a hunk for capital improvements and pay for lower priority items as money came available.

Likewise, why would anyone do a survey on the property tax rates of many other Colorado cities without also the question of how much money they have per resident the cities have to spend? Per resident, SB has more money to spend than 95% of Colorado cities. Oak Creek has a property tax, but has a tenth as much money to spend per resident as City of SB.

This city saying it needs more revenues is like Larry Ellison saying he needs a pay raise because buying a Hawaiian island and financing the winning America's Cup yacht is expensive. Just because the city can spend more money doesn't mean the public wants to pay more money in taxes.

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