Questions and Answers on Crested Butte sales tax increase proposal

Cutbacks looming if tax not passed

The town of Crested Butte is proposing a half percent increase in the town sales tax to fund parks and recreation. The sales tax in town would go from 4 percent to 4.5 percent and would bring in about $300,000 annually. That money would be specifically earmarked for parks and recreation, but that could free up money elsewhere in the town budget to address needed capital projects. We sent some questions we have heard concerning the issue to parks and rec director Janna Hansen and town manager Todd Crossett.

 

The town of Crested Butte is proposing a half percent increase in the town sales tax to fund parks and recreation. Will it be used only for maintenance?

The funding would go primarily to maintenance, renovation and replacement—as well as preserving facilities and services we currently provide. By enabling us to take care of what we have, it will also make it possible to consider the addition of amenities, facilities and services, essentially, enabling us to continue to work the Master Parks Plan.
When would the town first see the funds?
2015.

Where specifically would the additional money be spent?
• Deferred park maintenance
• Regular park maintenance
• Renovation of facilities at the end of their usable lives
• Would free up funds to continue existing services and amenities
• Would make it possible to consider the addition of amenities, facilities and services over time as the town becomes increasingly able to care for the facilities it currently has.

Is it enough money to eventually fund a swimming pool or recreation center?
No. Funding an indoor swimming pool or rec center are beyond the funding and finance means of the town of Crested Butte and would require a regional approach to funding. As determined by the 2010 Parks and Recreation Master Plan (a copy of which is available at the Old Rock Library and online at www.crestedbutte-co.gov under Parks and Recreation–Projects) the capital funding needed for a basic indoor pool is $5 million to $8 million.
In addition $2.5 million to $5 million would be needed  for an indoor recreation center. These numbers would most likely be significantly higher taking into account current rates for construction and materials. The annual operating budget for an indoor pool is estimated at $650,000 to $750,000, and $150,000 to $250,000 for a rec center. The findings of both the Parks and Rec Master Plan and the Mt. Crested Butte Aquatic Center Feasibility Study determined that a project of this scope was not feasible for one entity to complete alone and would require a regional effort.
A first step in that effort would be to set up a sustainable funding mechanism for maintenance and operations. A subsequent step would be to seek funding to construct the facility.
If the town can secure sustainable funding to meet its current parks maintenance needs, it would be in a better position to consider taking part in a regional dialogue on pursuing a pool or rec center.

So, can this sales tax money be used anywhere else in the town budget, ever, at the discretion of a future council?
No. It is specific to the Capital Fund Budget—not the General Fund or Enterprise Funds. And it is targeted at Parks. In turn, this frees up funds in the capital budget for other critical capital needs. Otherwise, we will need to address the problem by scaling back services and amenities supplied by Parks.

And if this is approved, will this money coming in just replace the current parks and rec budget line item as opposed to increasing that parks-and-rec line item significantly? In other words, will parks and rec funding stay the same or increase noticeably as a result of this money?
First, it will allow the Parks budget to not decrease. Otherwise it will. Second, it will allow the town to contemplate park-related projects that are currently perennially deferred for lack of funding and the ability to undertake and fund ongoing maintenance. Third, it will allow us to continue to pursue the recommendations of the Master Parks Plan, which leads to increased amenities and services. Otherwise the plan will be largely put on hold. Fourth, it will allow us to keep facilities online by providing necessary renovations. Otherwise they may need to be taken offline as they reach the end of their useful lives.
How much money is the RETT (real estate transfer tax) expected to bring in this year for the town capital budget?
In 2014 the 1.5 percent real estate transfer tax is expected to bring in approximately $500,000 to the capital budget. It typically brings in around $425,000 to $475,000 annually. The budget for park maintenance expenses is $370,000 annually. This is not sustainable, as it leaves very little funding for the growing list of capital maintenance, capital purchases and capital projects outside of parks.

Isn’t the town booming with additional sales tax that could be used for such projects?
Current sales tax is split 75 percent to the general fund and 25 percent to the transportation fund. General funds can be transferred into the capital fund and are, but this is also not sustainable because increased business drives increased service needs from the general fund as well. And general fund services, like all services, cost more to deliver each year just due to inflation. Robbing the general fund creates deficits in the general fund. Further, the significant amount of funding needed to keep parks facilities and services on track would not be sufficiently covered even if all of the increase in sales tax revenue were directed into the capital fund.

What about the Bud Light $500,000? Won’t that address some capital needs at Big Mine Park?
They could. But they are one-time monies. Using them to meet an ongoing need is not sustainable. In a short period of time, we would be back to the same decision we face today. And we would have no permanent facility to show for it. Spending the Bud Light money on an investment that continues to deliver value over many years would seem a better long-term strategy.

If this doesn’t pass, what would happen to the parks and rec maintenance budget?
The budget would be adjusted accordingly, likely resulting in reduction in services in the near term and eventually facilities being taken offline as they reach an untenable level of disrepair. And further movement on the parks master plan would cease outside of dedicated funding sources like grants or gifts.

If the town recreation side is getting out of hockey and soccer as municipal programs, wouldn’t that free up time and money in the department?
It will free up administrative time, but will not free up funding. Program revenue supports program delivery and does not fund the budget to maintain facilities. The revenue generated by running these programs will be lost along with the management of the programs. Recreational programming is a service to the community and the cost to offer these programs far outweighs the revenue generated by them. In 2014 recreation expenses were budgeted at $461,901 and recreation revenue was budgeted at $155,550. That leaves over $300,000 that comes out of the general fund to support recreational programming.

If it passes, will it be enough to take care of and expand the town parks as the community grows or will the town come back and ask for more money in ten years?
We believe that as this revenue grows and the backlog of maintenance projects is completed, this will be enough to carry forward for many years into the future. A good example of this is the 1 percent sales tax for transportation that funds the Mountain Express, which was the last town sales tax increase back in the 1970s. Revenues have successfully kept pace with service demands over the past 30 plus years.