Our View: Steamboat’s fiscal health may require service cuts
September 11, 2012
The city's plan to spend nearly $1 million next year on a combination of cost-of-living pay increases for all employees, raises for firefighters and paramedics and deferred maintenance and capital projects should be accomplished without the use of reserves. Further, the Steamboat Springs City Council needs to seriously consider cuts to city services to make the new expenditures possible.
Another 2013 budget workshop ended last week with council members essentially directing city staff to prepare a list of options for how the new spending requests can be made by using combinations of 2012 surplus revenues, cuts to other budget line items and money from the city's unallocated reserves.
As we said several weeks ago, the decision ultimately boils down to the council's philosophy on spending and saving taxpayer money. A conservative approach to budgeting during the past four years has helped the city build healthy reserves, but we don't think now is the appropriate time — nor are the proposed new expenditures the appropriate way — to justify raiding the emergency fund. The council already approved allocating $330,000 from reserves to make a debt payment on the Iron Horse Inn.
The city instead could use surplus revenues from the current budget year to make up the spending deficit, but there are issues with that decision, as well. A strong case could be made for allocating any surplus monies from 2012 to reserves or to the city's capital fund, which has been depleted by years of declines in building-use tax revenues stemming from the collapse of the construction and real estate industries.
A conservative budget approach then would leave the city with a final option — cutting existing expenses to make room for the new ones. That's always easier said than done, but this council needs to give possible service cuts more than just lip service. At its meeting last week, the council was presented with several options, including consolidating some bus stops and eliminating low-performing bus routes, and cutting all recreational sports programs. These aren't the only, or perhaps even the best, options, and we implore the council and city management to consider others.
Perhaps it's not ultimately realistic to accomplish all of the savings through cuts alone, but the city owes it to taxpayers to realistically evaluate that option. Truth be told, the city largely has escaped having to make any significant service cuts during the past four years. And because growing — and unfunded — capital infrastructure needs might soon swallow any surplus revenues from future city budgets, this council might not be able to afford to kick the can down the road.