The Crested Butte News Serving the Gunnison Valley since 1999
“The de-Brucing is the hardest to sell”
For the second year in a row the town of Mt. Crested Butte’s budget for the coming year will be greatly affected by the success or failure of several ballot issues. The town is asking its residents to approve three tax questions this fall, and those residents who showed up for a public hearing on the town’s five-year financial plan last Tuesday were in full support of the issues.
On Tuesday, November 3 the town will ask voters to approve an increase in the town’s sales tax to 5 percent from 4 percent. The town is estimating that the sales tax increase will cost local residents about $10 a year.
Another ballot question will ask voters to “de-Bruce” the town’s capital mil levy on property values, effectively raising the mil levy rate to 5.37 from 3.09. “De-Brucing” refers to eliminating the restrictions on property tax revenues imposed by the state’s Taxpayers Bill of Rights, or TABOR, amendment. The extra funding the town would get through a passage of this question could be used only for capital purchases and improvements. Passage of this question would cost property owners about $20 a year per $100,000 in valuations.
Finally, the town will ask voters to renew the admissions tax, a 4 percent tax on items such as lift tickets and concert tickets, used to support marketing and advertising efforts for the area, as well as help fund the Mountain Express bus service.
Mt. Crested Butte resident Richard Dobbin said he was in support of all three ballot questions.
“Any time you look at a situation to increase town taxes, you want to look a little askance initially. In looking at the admission tax, it seems like a no-brainer. I enjoy the Mountain Express as much as tourists do. Even though I have to pay the tax to buy lift tickets, it’s well worth it,” Dobbin said.
Dobbin said he supported the sales tax increase in order to keep the town’s high-quality employees, and to help build a financial reserve.
“The de-Brucing is the hardest to sell,” Dobbin said. “In the greater scheme of things it’s not costing that much. The benefit, which is good roads, is well worth the amount of money. Thank you for all the work you’ve done on this. I fully support a yes vote on all three.”
Resident David O’Reilly also spoke in favor of all three ballot questions, and asked the town to continue to try to work on an extension of the recreation path. There were no other members of the public present.
Councilman Gary Keiser presented the update to the town’s five-year financial plan.
The plan makes a number of assumptions about town finances. Some of the general assumptions are that property tax valuations will remain flat for 2010 and 2011, drop 2 percent in 2012, and increase 2 percent in 2014—essentially staying flat over the course of the plan.
Sales tax revenues are assumed to increase by 3 percent per year between 2011 and 2014.
The town’s agreement with Gunnison County to provide police coverage north of Round Mountain expires at the end of 2009, and the financial plan assumes that this policing will continue. “If there are changes, we’ll have to deal with that one when we find out what they are,” Keiser said.
Financial Plan A assumes that all three ballot issues will pass this November. Under Plan A, the town intends to take out $2 million in bonds during 2010 for road improvements. During the last election cycle, voters approved a question that authorizes the town to take up to $6 million in bonds for capital improvements.
The $2 million “would bring all our roads up to a class 4 or 5 and keep them at that level during the whole five-year period,” Keiser said.
Plan A would also allow the town to restore cuts made during the 2009 budget process, including $56,000 that was cut in landscaping expenses, $10,000 to repair the town pavilion, $10,000 for weed control, $52,000 for repairs to town hall, and $11,600 to be given out in donations.
Under Plan A, the town’s cash reserves will increase from $326,000 at the beginning of 2010 to $987,000 at the end of 2014. “We are so dependent on sales tax and building revenues and those can fluctuate a lot,” Keiser said. “Having 11 percent reserves is not really adequate.” Plan A will boost the reserves above 25 percent of the yearly operating budget.
Plan B assumes the ballot issues will fail, particularly the sales tax question and the de-Brucing question.
Road repairs would be limited to $300,000 a year under Plan B. Keiser noted, “It would provide some funds for roads, but not enough to maintain them as they are now. So over the five year period the roads would be deteriorating.”
Operating expenses would have to be further reduced below the 2009 level, which already had $140,000 in cuts. Additional cuts would include $50,000 in the recreation department, the loss of two full-time employees, losing the lease on the Snowmass parking lot (the free lot near the Firehouse Grill), eliminating a yearly donation to the Nordic Center to groom the rec path, and eliminating any contracted snowplowing work. The additional cuts would amount to a savings of $172,200.
However, Plan B still allows room for the cash reserve to increase. The reserve is expected to increase to $887,000 at the end of 2014 under Plan B.
While separate from the town’s general operating fund, should the admissions tax question fail, there would be no funds for marketing and the Mountain Express bus service would be significantly impacted. The town gives out nearly $400,000 a year in admissions tax grants to businesses looking for extra advertising funds. Keiser said the admissions tax also makes up about 10 percent of the Mountain Express budget. “With that kind of loss they would probably have to cut some routes,” he said.
The Town Council will have a work session on the 2010 budget on Tuesday, October 20.
