Council considers cuts
With a drop in property sales in Crested Butte and a related decline in transfer tax revenues, the Town Council is struggling over how to fund capital projects for 2008.
Real estate transfer tax revenues were budgeted at $750,000 for 2007, but the projected amount is only $350,000, a significant shortfall, according to Crested Butte financial director Lois Rozman. The Town has budgeted transfer tax revenues for 2008 at $450,000. Real estate transfer taxes account for approximately 60 to 65 percent of the general capital fund revenues. Total revenues for the general capital budget for 2008 are projected just under $1.3 million, but projected costs exceed income by $200,000, excluding outside requests. The general capital fund pays for capital projects, capital equipment and parks and recreation salaries. During the first budget work session held on October 9, town manager Susan Parker presented the 2008 budget with a general capital fund showing a deficit of $725,000, which included personnel costs for park maintenance, costs of carry-over projects such as Rainbow Park, and requests from the Center for the Arts and the Nordic Center. In an effort to reduce the shortfall, town staff made several recommendations for the council to consider, including moving capital projects under $5,000 to the general fund, deferring several town capital projects, and eliminating funding for the Nordic Center, the Center for the Arts and the new ice rink and sports complex proposed by the East River Skating Association. Even with those cuts, the fund still experienced a deficit of $202,594, and when the capital requests for the Nordic Center, the Center for the Arts and the new ice rink and sports complex are included, the deficit is closer to $600,000, Rozman says. To cover the difference, the council would have to transfer money from the general capital fund balance, which is projected at just under $2.2 million—a decision the council will make on Monday, November 12, Rozman says. With the deficit facing them, the council met with the Nordic Center and the Center for the Arts to gather further information on their capital requests and how the funds would be spent. The Center of the Arts requested $15,000 for various capital and operating expenses, and the Nordic Center is requesting $20,000 to help pay for night staff, trail expansion and maintenance, and center upgrades. Parker said during the second budget meeting the Town encourages sustainability and would like to see the Arts Center and the Nordic Center become self-sufficient; hence, the recommendation to remove the funding. "We need to wean them off of the Town of Crested Butte," Parker said. Nordic Center executive director Keith Bauer agreed during the budget meeting with Parker that sustainability is important, but said cutting funding now would severely affect the Nordic Center’s budget. The Nordic Center’s fiscal cycle is different from the Town’s and runs from June to July. "If we would have known about (the possible cuts) back in April, we could have adjusted ticket prices, but now it’s too late," Bauer explained of the impact of possibly losing funding. Crested Butte mayor Alan Bernholtz reassured Bauer the meeting was for information gathering and no decisions had been made regarding the funding. "The message is not ‘the funding is going to be pulled’—we’re just in a funding situation and we are trying to figure it out," Bernholtz said. A similar message was relayed to Pat Crow, director of the Crested Butte Center for the Arts, during her presentation to the council at a previous budget meeting. Funding for the new ice rink and sports complex is also contributing to the potential $600,000 deficit and was discussed by the council at a regular meeting on Monday, November 4 after a presentation by the East River Skating Association. Previous councils promised $350,000 to the skating association for capital expenditures related to the project; the current Town Council granted the funding in 2007. However, the council is now considering whether to roll over the funds that were not used, reduce the funding or cut the funding all together. The Town has allocated approximately $1,500 to the association this year thus far. The Town Council tentatively decided to line-item about half of the $350,000 for infrastructure work for the ice rink and to earmark the rest for possible use later in 2008. The council did not make any final decisions regarding the general capital fund during the budget meetings. In order to have enough time for public hearings, the council will have to finalize the budget on Monday, November 12 and decide whether or not to cut funding or use monies from the fund balance to cover the deficit. State statute requires the Town Council to adopt and approve a budget prior to December 14, when the mil levy has to be certified by the county commissioners.