Sales tax revenues drop $3.2M in 2009
City collections down about 16.3 percent from 2008
February 2, 2010
The city of Steamboat Springs collected about $3.2 million less in sales tax revenues in 2009 than it did in 2008, but the decrease falls within expectations and will not require reserve spending, a finance official said Monday.
A preliminary report from the city's finance department states that total sales tax collections for 2009 are about $16.7 million, down from about $19.9 million in 2008. That's a decrease of about 16.3 percent, which falls within the 18 percent sales tax shortfall city staff placed in the 2009 budget.
"As long as our other revenues come in close to projected, which they are, there's no need to go into reserves for 2009," city revenue supervisor Kim Weber said.
The report also states that December 2009 sales tax revenues were about $2.1 million, a 10.6 percent decrease from the nearly $2.4 million collected in December 2008.
"It was actually probably a little better than I expected — I wasn't too disappointed in the number because it enabled us to come within budget" for the year, Weber said about the December figures.
The year's total decrease in sales tax collections drops to 14.9 percent, rather than 16.3 percent, when considering only the city's general fund. That fund did not return any revenue to the Steamboat Springs Redevelopment Authority this year.
The city returns money to the SSRA when sales tax revenues at the base area are greater than a baseline amount set in 2004. Money returned is used for redevelopment projects at the base of Steamboat Ski Area. In 2008, for example, the city returned $320,463 from its general fund to the SSRA.
But because sales tax revenue at the base area did not exceed the baseline this year — and actually fell below it by about $460,000 — the city did not return any funds to the SSRA, creating the 14.9 percent drop in sales tax revenue in 2009 compared to 2008.
Weber said the difference between the 14.9 actual decrease and the 18 percent decrease planned for in the city's budget amounts to about $800,000.
That money likely will be used to shore up other faltering revenue streams or unexpected costs, Weber said.
"It will be used to offset other revenues and the possibility of additional expenditures that may have occurred during the year," Weber said. "We really don't know what the savings are going to be until we look at the budget as a whole."
The city has budgeted an additional 10 percent decrease in sales tax revenues for 2010. That decrease is on top of the 18 percent decrease planned for 2009. City Manager Jon Roberts said Monday that the projection protects the city against a "double-dip recession."
"We feel comfortable that we've budgeted conservatively enough to ride out another tumultuous economic downturn," he said.
Roberts added that if the economy and city revenues are trending upward deeper into 2010, the city could look at restoring some programs.
At the top of the list, he said, would be ending the furlough program and restoring salary increases for city employees.
"There have been no cost-of-living increases, and there have not been any merit increases (in 2009), either," Roberts said, adding that no such increases are budgeted for 2010. "We do have employees that have rolled up their sleeves and picked up the additional duties … having a merit compensation program that recognizes the outstanding employees in the organization is important."
But he echoed Weber's sentiment that the city won't know exactly where it stands financially until 2009 revenues and expenditures are finalized, which Roberts said should happen within 30 days.
"These are positive numbers on the sales tax, but we have to look at all of the numbers," he said.
The city has begun releasing preliminary sales tax reports that use a majority of sales tax collections to state monthly and year-to-date figures. Weber said the city will continue collecting December sales taxes, but those payments will not significantly alter the announced totals.
"I would say that I estimate maybe a 2 percent change at most in the (December 2009) number," she said.
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