Expecting to reach goal of 50 percent fund balance next year
The Mt. Crested Butte budget for 2014 suggests that the reduced staff and several years of living on modest means might finally be paying off for the town. As the Town Council and administration had hoped, financial reserves will be at 50 percent of annual expenditures next year and there’s promise that summer sales tax collections are starting to pick up where winter left off.
Town finance director Karl Trujillo told the council at a work session on Tuesday, November 5, the last few years of record-breaking summer sales tax has saved the town from the hard times coming on the heels of a drop in property tax collections. But another round of decreased valuation means the town is not exactly flush with cash quite yet.
The overview of the budget shows that the town’s property valuation is expected to drop another 29 percent in 2014. And while sales tax collected between June and September is on the rise—with September collections alone jumping 24 percent this year—it’s still not quite enough to keep pace with the long-term loss in property tax.
According to the preliminary budget, “Property tax revenue will drop from $479,322 in 2013 to $343,504 in 2014.” With that, Trujillo pointed out that property tax collections in 2012 were $536,000. “It’s quite a big drop,” he said.
A graph included in the draft budget shows the dramatic rise and fall of Mt. Crested Butte property valuations over the years, with a net assessed value of just over $20 million in 1992 rising gradually until 2005 when, after Crested Butte Mountain Resort built Mountaineer Square, it jumped more than $70 million for the next few years, peaking at around $175 million. Now the valuation is back to 2005 levels of just under $80 million.
At the tipping point in 2008, staff was forced to give up one senior position and reserves were only 12 percent of expenditures. But after a steady recovery, the town’s finances are giving staff a little breathing room.
“We’re projecting $432,000 over expenditures in 2014, so that allows us to transfer $384,000 over to the capital fund this year, if my projections hold,” Trujillo said. “What we were shooting for is that $1,184,000 for our ending fund balance, which is 50 percent of our expenditures for 2014. That’s what we’ve been shooting for in our five-year plan, is to get 50 percent of our expenditures on hand.”
In future years, Trujillo said any revenue the town brings in that exceeds what is needed to keep the reserve fund at 50 percent would be transferred into the capital fund to pay for projects like roads, the recreation path and upkeep of town property.
Every year, a minimum of $150,000 is budgeted for the maintenance of public roadways and infrastructure. But some parts of the infrastructure are luckier than others. It’s been about four years since the town hall got a fresh coat of paint and the roof is an original from 1974 that needs some work. Town manager Joe Fitzpatrick said some of the maintenance matters that need to be dealt with are long overdue, but he’s not holding his breath until they’re done.
“We want to paint, but we haven’t gone out to solicit bids. We have set aside some money in the capital budget for painting and we’re sure that at least the town hall will get paint next summer and we may be able to do the maintenance building also. But December is a critical month for us from the perspective of how much revenue it generates. So we’ll take a look at how much we can devote to those projects once we have those numbers right around the first week in February.”
With continued growth in the summer season, the appearance of town hall has only recently become an issue, with an increasing number of people congregating next door throughout the summer months.
In 2003, the town opened its Wedding Garden next to town hall to the public, hosting 10 weddings the first year. Then the number of weddings started to grow noticeably two years ago.
Last summer the town hosted 30 weddings in its garden that averaged around 90 attendees each, many of whom flew into the valley, rented accommodations and patronized restaurants, wedding planners, photographers and caterers.
“The destination wedding market is a big, big piece of summer business,” Fitzpatrick said. “It’s been really good for the whole valley.”
The only negative comment Fitzpatrick hears from guests related to the wedding garden is about the size and lack of amenities, like running water, available at the pavilion. “I have a good set of preliminary plans for expanding the pavilion—we just need a little more money. Actually, a lot more money,” he said.
And while the summer season has picked up considerably over the last few years, winter is still where the town makes its money. December brings the town its second-biggest sales tax collection of the year, second only to March, and that can make or break the projections the budget is based on. December’s sales tax won’t be finalized until mid-January.
The council approved the budget on first reading at a meeting November 19. An approved budget needs to be submitted to the county by early December. To get a copy of the budget call town hall at 349-6632.