Property tax hike could be on Mt. CB ballot

“I see wonderful progress”

The town of Mt. Crested Butte held a special meeting on Friday, May 29 to discuss the state of the town’s finances and recent progress made on action items in the town’s 2007 Community Plan. There were 15 people in the room and the town’s financial situation was looking tough, but the group was in good spirits—even with the notion of a property tax increase on the ballot this fall.

Town manager Joe Fitzpatrick and council member Gary Keiser started the meeting by highlighting progress on some of the 98 action items listed in the Community Plan. Keiser said, “We decided we ought to do a comprehensive review of the action items to see what we’ve done and what we haven’t done.” Keiser noted that a number of the items had been completed, and more than half were in progress.
Some of those highlights include the construction of the stage/amphitheatre area at the base of the Red Lady Lift, improvements to the towns’ Web site, improvements to town signage, the development of a five-year capital improvements program and the new year-round Adventure Park at the ski area.
Other in-progress items included the ongoing construction of the town’s new affordable housing at Homestead, ongoing revisions to the town’s zoning code, the development of an energy action plan to reduce the town’s carbon footprint, and the implementation of a noxious weed management program.
Mt. Crested Butte resident Jim Sharpe complimented the town staff and council on the update. “This is long overdue —just a checklist of our progress. Great job,” Sharpe said.
Sharpe asked about the progress on an extension of the town’s recreation path from the intersection with Moon Ridge Lane, a private neighborhood road, out to Gothic Road.
Fitzpatrick said the extension must be completed by 2012 due to the town’s agreement with the neighborhood.
Sharpe asked if the tax revenue issue affected the completion of the project. Fitzpatrick said the town was required to complete it and would have to find money somewhere, possibly from the road maintenance fund.
Sharpe also raised concerns about the need for around-the-clock police protection and quick-fire response.
Mt. Crested Butte community development director Bill Racek noted that the Crested Butte Fire Protection District is a separate entity from the town.
Keiser said the council and town staff have had discussions about increasing police coverage.
Fitzpatrick said the police have on-call coverage around the clock, but many officers live out of town.
He said it costs about $100,000 to hire a new officer, which would be necessary to cover 24 hours on-site. Fitzpatrick said one potential solution is for the town to hold one of its affordable housing units for a future officer to reside in. Police chief Hank Smith has announced an intent to retire, but when is unknown.
Sharpe also suggested improving the signage near the Snodgrass trailhead, which is in town limits, with a map and information stand similar to other trailhead areas.
But overall Sharpe said, “I see wonderful progress.”
The discussion then veered to the town finances. After a property tax/mil levy increase was rejected by voters last fall, the town switched over to its “Plan B” financial plan, which budgeted for a lower revenue stream and other financial cuts. The town’s sales tax rate dropped from 4.5 percent to 4 percent, and even when adjusted, sales tax revenues are coming in low for 2009. The fund balance, built up several years ago largely due to a spike in construction, is being eaten away due to the low revenue stream and operational expenses.
Trujillo said the town ideally needed the fund balance to be equal to 25 percent of the $3 million-plus general fund. They were headed for a 4 percent fund balance by 2012.
For 2009 Trujillo said the town had pay freezes in place, temporary workers were cut, the town flowers would not be put out, and the biggest cuts were to the road improvements budget. He said the town was on track to meet the 2009 Plan B budget, but he was a little concerned about building revenues coming through.
Trujillo outlined the town’s proposed ballot issue, and two revised financial plans up through 2014.
The Town Council has not officially endorsed a specific ballot issue to increase revenue, but the town did inform the county clerk of its wish to participate in the November election. Specific questions do not have to be finalized until later this summer. There could be at least two questions on the ballot.
The first question would ask voters to raise the sales tax rate from 4 percent to 5 percent, and de-bruce the town’s existing capital mil levy. The revenue generated by the mil levy is restricted due to the Taxpayers Bill of Rights (TABOR) amendment, so while the town has an approved 5.37 mil rate, it can use only about 3.1.
The second question, although unrelated to the general or capital improvements fund and only briefly mentioned at the meeting, may ask voters to reauthorize the town’s admissions tax, a 4 percent tax on admissions related events like concerts and lift tickets. The revenues from this tax go into a restricted fund that is allocated 25 percent toward transportation expenses and 75 percent for marketing.
If the mil levy and sales tax questions are approved by voters, Trujillo said the town would base the 2010 budget on a revised Plan A financial scheme. This plan would lead to an increase in the cash reserve from 12 percent in 2008 to 25 percent by 2014. It also provides bonding capability for $2.6 million in road improvements by 2014. Items cut in the 2009 budget, such as flowers and landscaping personnel, would be restored.
If the ballot issue doesn’t pass it’s on to a new Plan B, which would require a reduction of $200,000 a year in operating expenses. Trujillo said those cuts have not been formulated yet. There would be no bonding for road improvements and the cash reserve could continue to decline.
Mt. Crested Butte resident Bob Goettge asked if the town had any concerns about property values actually dropping in the next five years and affecting property tax revenues.
Trujillo said the town was considering that possibility.
Goettge also complimented the town. “This is well prepared. You got hit with the perfect storm… yet the town in my mind has really bounced back,” he said.
“It looks amazingly fiscally responsible,” Sharpe said. Sharpe asked if de-brucing the capital mil levy would actually lead to a small increase in his tax bill, since there would be no TABOR refund.
Trujillo said yes.
“That amount of increase seems well worth it. It looks like you’re spending it on sensible things,” Sharpe said.
Future discussions of the ballot issues have not been scheduled.