Budget will need complete rework if 2A/2B fails

Mt. Crested Butte expecting flat revenues aside from property tax

A lot of work has already gone into the formation of the town of Mt. Crested Butte’s budget for 2009, but if voters choose not to pass the town’s tax increase and bond issuance on next week’s ballot, the process may have to start all over.

 

 

 

Budgeting typically starts in late August as each town department estimates its upcoming financial needs and forms a proposal, which the town Finance Department and town manager then compile into a draft budget for the Town Council’s review. On Tuesday, October 21, the Town Council held its first work session to discuss the 2009 budget draft.
But as things got under way, town manager Joe Fitzpatrick pointed out that the draft budget was based on the success of the town’s upcoming ballot issues. Next week Mt. Crested Butte voters will be asked to approve a mil levy increase for the general fund, and “de-Bruce” the existing mil levy (restricted by the TABOR amendment) for capital expenditures.
The two adjustments to the mil levy will raise property taxes by $44 per $100,000 of assessed valuation. The town is also asking to continue a 0.5 percent additional sales tax that will sunset at the end of the year. All three tax adjustments will fall under a single ballot question—2A.
A second question, 2B, asks voters to approve the town’s issuing $8.6 million in bonds for a handful of capital improvements projects, such as an extension of the recreation path.
Council members and town staff have previously stressed that without the additional financial support of 2A, the town will be hard-pressed to continue funding its departments, even at the 2008 level.
Finance director Karl Trujillo says, “If those don’t pass we’re coming up with a whole new budget. We’ll end up cutting a bunch of stuff. Everything would change from revenues to expenditures… If things pass, we’ll keep going with this budget.”
The town will be entering 2009 with just over $435,000 in cash reserves.
Provided the ballot issues pass, the town is expecting to take in $4.97 million in revenues, nearly $2 million of which would come from property taxes. But aside from a potential increase in property tax revenues, Trujillo says, the remaining revenues in 2009 are flat or lower when compared to 2008.
Although the town is expecting nearly $2 million in sales tax collection for 2008, in 2009 the budget is calling for approximately $1.66 million.
The town’s active departments include the Mt. Crested Butte Police, Community Development, Maintenance, Parks and Recreation, and Administration.
Each department has budgeted for various operational cost increases in 2009, with 5 percent increases in salaries and wages and an 8 percent increase in benefits on average. Trujillo said increased costs for fuel and insurance are also leaving some department budgets higher than last year.
Community development has $40,000 budgeted for consulting purposes for planning projects such as Mountaineer Square North, which is expected to enter the final planning stage sometime in 2009. Some $15,000 of that is for a special retail consultant, and the amount of retail that should be included in Mountaineer Square North has been a hot topic during previous planning meetings. Fitzpatrick said, “We don’t want to build too little and we don’t want to build too much (retail).”
The town’s increased expenses in 2009 also contain about $310,000 in payments on the upcoming bond issue, if passed.
Trujillo says snow removal costs are pretty flat compared to what was budgeted last year and they’re hoping for a “normal” snow year. The town went $160,000 over budget last year to cover snow removal costs.
Altogether, the town is currently budgeting expenditures of approximately $4.4 million.
One of the more debated items at Tuesday’s work session was a line item for the annual Fourth of July fireworks display. Fitzpatrick said he was suggesting the $7,000 line item be added to prevent the yearly battle between the two municipalities and local business as to who should pay what for fireworks, but he said it was up to the council whether or not to include the expense in the budget. A contribution for the fireworks display has typically been drawn from the town’s donations line item, which totals $20,000 in 2009. “The reality of it is we need fireworks. It’s a major piece of the Fourth of July,” Fitzpatrick said.
However, council member Dave Clayton said, “They’re not doing (a line item) down in the town of Crested Butte. They’re going to give whatever they want and we may end up giving four times that amount.”
Mayor William Buck said he wasn’t too supportive of a line item for fireworks. The council did, however, agree to organize a joint meeting with the town of Crested Butte and the Crested Butte/Mt. Crested Butte Chamber of Commerce to work out a better agreement for the Fourth of July celebrations.
The town will continue its budget discussion on Wednesday, November 5, the day after the election. A public hearing to discuss the budget is tentatively scheduled for Tuesday, November 18, and final passage is expected by December 2. Trujillo says if the ballot issues do not pass on November 4, the town may need to hold additional meetings to re-work the budget.

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