The Crested Butte News Serving the Gunnison Valley since 1999
Cash reserves climbing toward 50 percent
Mt. Crested Butte town officials are keeping a conservative outlook going into 2012, proposing a budget that would trim a little from this year’s general fund commitments and continue to rebuild reserves lost in the recession.
Town finance director Karl Trujillo points out the proposed reduction of about $16,000 in general fund expenditure is a relatively minor shift in the $2.7 million general fund budget, but says it still reflects a future with potentially less cash coming in.
Assessed property values in Mt. Crested Butte dropped by a third this year, cutting the town property tax collection $245,000, to less than $522,000 from more than $767,000. That loss will be spread out between the general fund and the Capital Projects fund, which has road repairs and vehicle purchases coming up next year.
The decline in property values has also hit the Downtown Development Authority, which guides growth in the town’s business center, particularly hard, stripping about $366,000 from its budget.
“We’ve been prepared,” Trujillo says, citing a reduction in the number of town employees over the last few years, to 19 from 24 and a five-year financial plan that projected the town’s revenues to be close to where they are.
“It’s been a pretty easy process because of [the plan],” he says. “We did really well this year. In 2010 we budgeted down 5 percent for winter months and we ended up being above that.”
The town is taking the same approach to sales tax projections this year, planning for a 3 percent drop in sales tax collections through January, February and March and an improvement to maintain current sale tax levels through the rest of the year.
“We’d rather be budgeting a little bit down in the winter and be high” than the other way around, he says. So far this year, the town beat its sales tax projections in every month except May.
Mayor William Buck asked why the proposal holds sales tax projections steady through most of the year after beating the projections consistently over the last 12 months. “What was the thinking going flat for those months?” he asked.
Town manager Joe Fitzpatrick echoed Trujillo, saying, “I’m more comfortable once again hoping we underestimate sales tax.”
Trujillo says building revenues are “starting to pick up a little.” As the current year comes to a close, Trujillo told the council at a meeting on Tuesday, November 15 the community development department had already surpassed its budgeted revenues of $100,000 from permit and inspection fees this year. Next year, the finance department is budgeting building revenues to be 20 percent higher.
Fitzpatrick and Trujillo are also taking advantage of an opportunity in the additional revenue to continue rebuilding reserves lost in the last few years.
“Reserves have been really small because we got hit with a downturn in the economy and sales tax revenues dropped,” Trujillo says, which had a big impact on the town’s biggest funds.
This year, the town was able to push its fund balance to almost $1.1 million, or about a third of the town’s operating expenses, and town officials are pushing to bring the amount of money in reserve up to 50 percent of expenditures to keep vital functions running for half a year if cash were to stop coming to the town.
The extra cushion gave the Town Council room to discuss, and ultimately earmark, the $5,000 contribution that was requested by the newly formed Economic Development Council. Each of the towns is considering similar requests; Gunnison County put $35,000 for the EDC in its budget. The town will also continue its role in the development of the Mt. Crested Butte Performing Arts Center, with $20,000 committed to the effort.
The council will vote on the final budget for 2012 at its regular meeting on December 6.
