Town Council putting finishing touches on 2008 fiscal plans

Capital purchases delayed again
The Crested Butte Town Council will delay some major capital purchases for a second year in order to present a balanced 2008 budget to the public on Monday, December 3 at its regular meeting.

A drop in property taxes and stagnate sales tax revenues have proved challenging for the Crested Butte Town Council throughout the 2008 budgeting process. According to town manager Susan Parker, the revenue projections required Town staff to cut a half a million dollars in expenditures to balance the budget. The Town anticipates $300,000 less in Real Estate Transfer Taxes than in previous years and just under $2 million in sales tax.
The Town has budgeted almost $11 million in expenditures, similar to last year’s figures. Some of the capital purchases and projects deferred include the Park Shop replacement, Skate Park addition, a document management system and truck replacement.
"Basically we had to decide what we could defer, and what was essential," Parker said. "It came down to what we really, really needed to do, and employee and public health and safety."
Crested Butte finance director Lois Rozman said department heads prioritized expenditures and no additional staffing requests were granted. In addition to the cuts made by staff department heads, the Town Council agreed to juggle parts of the budget.
Specifically, Rozman said the council agreed to move snow removal to the more stable Street and Alley Fund rather than the General Fund. The street and alley fund receives funds from its own mil levy as opposed to property taxes. Rozman said the stable funding is needed to help with the increased cost of street maintenance.
"There’s more and more pressure for more and more snow removal," Rozman added.
The Town also decided to increase water and sewer user and tap fees to help generate additional revenues. Tap fees are charged once to new customers as they connect to the sanitary sewer collection system, while user charges are periodic charges for ongoing use of the system, and are designed to recover operations and maintenance expenses.
User charges will increase by $1, from $43 to $44, and tap fees will go up $1,000, from $13,500 to $14,500. The last time the tap fee was increased was in 2006. The increased fees are needed for the $350,000 in capital expenditures planned for 2008.
To cover the shortfall in revenues, funds will be transferred from the general Capital Fund, Street and Alley Fund, and Affordable Housing Fund balances. During the budget process, Town Council members questioned whether or not transferring funds from the fund balances was good financial practice.
In response to the council concerns, Rozman created a Financial Plan and Policies Reference Guide for the Town Council. The policies are the first written fiscal guidelines created by the Town. The policies provide recommendations on the budget process, fund balances, debt management, capital improvements, and investment opportunities. Parker says the document allows for long-range planning.
"Basically, it’s a tool and guide to help the council make decisions that are in the best interest of the town," Parker said. "It’s just makes fiscal sense."
Parker encouraged sustainability throughout the budget process. The Town Council made several commitments within the budget contingent upon specific efforts were made towards sustainability.
"We have to be sustainable and live within our means. We can’t expand services unless we have a stable revenue source to support it," Parker said.
Parker said the Town plans to look at new sources of revenues in the coming fiscal year to prevent another tight budget that limits needed projects and purchases. Parker noted that while revenue projections were capped at 2 percent, fuel, construction and wage costs are expected to experience double-digit inflation.
The Crested Butte Town Council will hold a public hearing on the 2008 budget on Monday, December 3.

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