As Steamboat Springs’ capital needs grow, city manager suggests new revenue source may be needed
March 18, 2014
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.
Steamboat Springs — 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.