The Crested Butte News Serving the Gunnison Valley since 1999
Big projects have lasting costs
By Mark Reaman
As the Crested Butte Town Council moves through its budget process for 2020, town finance director Rob Zillioux is expecting sales tax revenues to increase by just 1 percent next year. He has consistently warned that an economic pullback is likely, given the length of the most recent expansion, and so he has argued that the council should take a conservative view of the budget.
How conservative to be was a point of discussion at the council’s September 16 budget work session.
Councilwoman Mallika Magner wanted the town to be in a position to add to its reserves, especially in the general fund. Currently such reserves are at about 77 percent of a year’s operating budget, but the council wants to take that up to 100 percent.
“This is a tight and thrifty budget,” Zillioux told the council. “But this is the tail wagging the huge capital costs the town has taken on the last few years. All of these things the town is doing have to be taken care of and that costs money,”
Responding to a question from mayor Jim Schmidt, Zillioux said the purpose of a reserve fund was to maintain town services even in an economic downturn. “We would want to maintain the level of the marshals and the level of the parks without cutting back on people or services,” he said. “Not to mention a catastrophe like a wildfire in July or a drought in a ski season that would keep people from coming here. I would rather have money to pay the bills instead of cutting services or shutting down programs. It’s a rainy-day thing and we are in good shape, but the capital expenditure trajectory of the last three or four years has been big.”
Councilman Paul Merck pointed out some budgetary items, like an eighth marshal, have been in a holding pattern for years.
“The town staff has been great in putting some things off to stay thrifty,” said Zillioux.
Magner questioned the need to raise the base water and sewer monthly fees next year by $1. The base sewer fee will increase to $38.50, while water fees will increase to $29. “Every time those kind of fees go up it makes it more expensive to live here.”
Zillioux agreed but said that was the cost of the system. He also noted that one of the big revenue sources in both water and sewer was tap fees and that as the town approached build-out, those contributions would decrease.
“I’m not a fan of raising rates. Are there other alternatives?” asked Magner.
Zillioux said the increase amounted to a 3 percent rise in the bill. “Having a 3 percent increase when both the water treatment plant and wastewater treatment plant had major upgrades is pretty good,” he said. “Shea [Earley] and the Public Works is pretty tight but for now, it is what it is.”
Zillioux also told the council that the town was raising the street mill levy property tax from 8 mills to 10 mills. Voters have approved that it could rise to as much as 16 mills. He said each additional mill would bring in approximately $100,000. It would cost the owner of an average house in town about $80 per year for each one mill increase. “The need is in part from deciding to pave the alley one block off of Elk. I’m concerned that once we pave one we will have to pave them all. And that can be expensive. So we need to be thoughtful,” he said.
The council ran out of time to discuss that dilemma but will hold another work session on the 2020 budget on October 7.
