Steamboat City Council backs conservative budget
Finance Director Deb Hinsvark presents midyear update, 2012 sales tax projection
September 8, 2011
Steamboat Springs — Steamboat Springs Finance Director Deb Hinsvark's midyear financial report to the City Council this week affirms year-to-date sales tax revenues that have exceeded the 2011 budgeted amount by about 13 percent.
That's good news for city coffers through July, according to her report, but Hinsvark is scaling back her projection for next year. She has forecast 2012 sales tax revenue to decline 2 percent next year. The city forecast a 10 percent decline this year
City Council members, however, preferred a more conservative approach. They directed Hinsvark to budget revenues at 5 percent less than the 2011 projection.
"I'm not comfortable with next year forecasting a 2 percent drop from our actuals this year, and I know that makes the numbers bigger," council member Bart Kounovsky said about potential 2012 budget cuts.
The city relies primarily on sales taxes for its general fund revenues. When those revenues decline, there are limited solutions, including cuts and dipping into reserves. Cuts in recent years include the city switching to a four-day work week, a 10 percent reduction to managerial salaries, eliminating vacant positions and holding existing service levels.
Most City Council members said Tuesday that they didn't favor using reserves to balance the budget next year, citing concerns those funds might be needed in the future. Only council member Jon Quinn thought differently.
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"I think it would be unwise for us to balance that strictly with services cut," he said. "I think there's a point at which we should dip into that pot. I would be in support of a balanced approach."
In 2010, the city collected nearly $16.7 million in sales tax revenue. It budgeted to generate nearly $14.6 million this year but is on pace to collect more than $16.9 million.
City Council President Cari Hermacinski asked whether the 2012 sales tax projection could remain at this year's level.
Hinsvark said she had to request supplemental funding for providing services the city didn't expect to address this year from the heavy snowfall and subsequent high water. She said without the reduction in services or use of reserves next year, the city wouldn't be able to cover its expenditures.
City Council member Kenny Reisman said it was problematic that generating revenue wasn't being discussed.
"Across the board, we can't dismiss the revenue possibilities that might be out there at our fingertips. That may be an aside, but that's a part of the conversation that I think needs to be included," he said
After the meeting, he suggested the possibility of departments pursuing public-private partnerships.
Hermacinski suggested reducing services that aren't core government functions. That concerned City Council member Scott Myller.
"I think our budget needs to include some reinvestment, too," he said and mentioned the USA Pro Cycling Challenge and other bike-related efforts. "I don't think we can cut, cut, cut, cut, cut. I think we need to look toward the future. I think we need to look at marketing and investing in some things we've already started."
Hinsvark said after the meeting that presenting the report allowed her to get feedback before she presents the city's budget Oct. 4.
— To reach Jack Weinstein, call 970-871-4203 or email jweinstein@SteamboatToday.com