Budget looking pretty good for Crested Butte in upcoming year

Surprise sales tax revenues help with financial confidence

[ By Mark Reaman ]

Crested Butte’s 2021 budget projections are looking better than anyone would have expected just a few months ago. Town staff and council are putting the finishing touches on the document and despite a pandemic that in the worst case scenario was expected to cut 2020 sales tax revenue by more than half of the 2019 figure, the numbers are actually expected to top last year’s.

The somewhat surprising sales tax collection is putting the town in a continued excellent financial situation but the staff is remaining conservative, given the unknowns of what to expect with tourism and sales tax this winter. Finance director Rob Zillioux is also consolidating some town reserve funds from different accounts and that will bolster the 2021 general fund reserves to more than $6.2 million—or more than a year’s worth of operating revenue.

“September sales tax collections were up 20 percent over 2019,” Zillioux told the council at a November 2 work session. “That is pretty remarkable when you think back to March and brings us to being just 2 percent off year-to-date. I think October will be pretty strong too, given the weather. I fully expect us to catch up.”

Zillioux’s figures show that in September, grocery sales tax revenue was up 40 percent, retail sales were up 39 percent and lodging was up 25 percent. Even the bars-and-restaurants category was up 10 percent in September.
In a memo to council, Zillioux said the numbers are coming in thanks to people visiting the area longer and even moving here. “It is a reflection of the Zoom Boom and people wanting to be in places with more space,” he said.
The other town fund that is booming is the Real Estate Transfer Tax (RETT). A 3 percent RETT is collected with every property sale in town and there is almost $2 million in the fund through October. “There have been 27 properties in town that have sold for more than $1 million. Eight properties this year have gone for more than $2 million and three have topped the $3 million mark this year. Crested Butte free market real estate is now officially only affordable for the wealthy,” Zillioux commented. “And this puts more pressure on housing everywhere in the valley. The flow moves down valley and all prices are going up. It is more and more difficult for a working person to buy a house in this end of the valley.”

As for proposed expenditures in 2021, the budget is calling for an electric-powered police vehicle worth $110,000, the purchase of a unit in Red Lady Estates mobile home park for $105,000, and lots of studies, including a comprehensive “Community Compass” planning process meant to gauge community values and a study on how to maximize housing opportunities in the Slate River annexation. One planner position will be replacing Bob Nevins, who left this year, and an engineer position is being considered as well, but no other personnel is expected to be hired next year. Water and sewer rates will go up $2 each per month due to costs of recent facility improvements in both those areas.

Zillioux explained the town expects that implementing the Climate Action Plan will cost $915,000 but town will pay only a small part of that. He explained that $300,000 will come from grants and $600,000 through a so-called “contingent payment performance contract” where the contractor makes improvements that will save the town money on energy costs and those savings are then used to repay the up-front costs put up by the contractor. “They get the financial benefit we derive from savings and we get a project without big costs up front,” he said. The town is expected to spend about $73,000 in Climate Action Plan expenses.

Looking a little further down the road, the council hopes to have money set aside to purchase more snow storage space if and when something comes available; planning for a new skate park to replace Crank’s Tank will begin in 2021 with construction slated for 2022. Parks and Recreation director Janna Hansen said the current skate park is at the end of its life so a “design-build” is scheduled for 2022. That is expected to cost about $550,000.
Another contributor to the positive revenue flow for Crested Butte is the newly implemented nicotine tax. Zillioux said he expected that source to bring in another $170,000 to the coffers this year.

“Given what we are seeing now, we are confident the 2021 general fund budget will be up another 2 percent,” Zillioux said. “That seems a realistic view of what to expect. Departments are planning for conditions to be more normalized in 2021, although that is still speculative.”

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