The Crested Butte News Serving the Gunnison Valley since 1999
Hold off until spring and look for more cuts?
By Mark Reaman
There was little enthusiasm last week by members of the Crested Butte town council to increase the street and alley mill levy to raise funds to continue maintaining the roads in town. Council will discuss the issue again at the December 2 meeting and decide whether to raise the current eight mills to nine, while there will be another discussion in the spring of 2025 to determine if the staff recommendation to raise it three mills is a needed course of action.
According to a lengthy staff report presented during a work session on November 18, if council does not raise the mill levy, the town will have to dip into General Fund reserves to cover the increasing costs of street maintenance. That is anticipated to take the town budget into the red on a regular basis. A three mill increase would bring in about $550,000 annually and allow the town to continue regular maintenance and then do a major $1.5 million Full Depth Reclamation (FDR) street reconstruction project every five years.
“We typically do a large capital project every five years or so,” said town manager Dara MacDonald. “Expenses for street and alley maintenance is outpacing revenues. There has been a 386% increase in the cost per block for the major projects between 2017 to 2024.”
MacDonald said staff took a deep dive into cutting expenses and increasing revenues to make up for the proposed mill levy increase. She presented five options with varying increases in the mill levy between zero and three mills along with suggested cuts, basically centered around reductions in routine expenses for supplies and staff education and not filling some staff positions. She said implementing some cuts and raising the mill levy from eight to 11 mills would be sufficient to keep the street and alley fund solvent into the foreseeable future.
Responding to a council inquiry if the major projects could be put off longer than five years, Public Works director Shea Earley said they could be put off a year or two but he emphasized the need to keep a regular maintenance schedule or else the town would begin to experience failing roads. “The roads would fail and fall into disrepair quicker if we pull back too much.”
“We can start having worse roads if people want that,” said Early. “We can have more potholes and bumpier roads. Right now, a good portion of our roads are in good condition.”
In the staff memo to council, it was explicit that staff recommended the council “consider maintaining the established practice of funding the Streets and Alleys fund with the voter approved property tax established for that purpose.” Voters in the 1990s approved using up to 16 mills for streets and alleys. It was last increased in 2014 from six mills to eight. Staff pushed for a three mill increase starting in 2025. Three mills would add about $190 a year for every million dollars of actual value for residential property. Commercial property would get tagged for about $811 annually for every million dollars in value.
Several members of council including Mallika Magner, Beth Goldstone and mayor Ian Billick brought up the idea of changing the town policy of holding 100% of operating costs held in reserve in case of an emergency. Billick noted that the town has sufficient spendable resources to allocate money toward future road and alley projects in 2025, though that would not be sustainable in future years without changing the policy requiring maintaining 100% of a year’s operating expenses for each fund in reserves.
That change would allow the council to move money from the general fund reserves without needing to hold more than approximately $7 million in each of the next few years.
“I would like to see no mill levy increase. I would like to see no current jobs cut. I would like to take a portion of the general fund reserves and over the next year look at how to further reduce expenses and increase revenues,” said Magner. “My understanding is that holding 100% of operating costs in reserve is not standard practice for towns. I would use reserves this year to give us time to look closer at things next year.”
“It seems like a stop gap move and the mill levy will have to be raised at least a bit next year,” said councilmember Kent Cowherd.
“If so, so be it,” responded Magner. “But I don’t want people paying more taxes this year given some of the hits they’ve recently taken.”
“I also don’t want to increase the mills but there are a lot of pulls on our general fund,” said Goldstone. “We are discussing how to increase funding to the Housing Authority which is important as well.”
“This is a big discussion, and we don’t want to move too fast on anything, including adjusting the reserve fund policy,” said Billick.
“Considering the last mill increase was in 2014 there has been lots of changes since then,” said councilmember Jason MacMillan. “I feel some sort of increase is needed in the future. And I don’t anticipate there is a lot of fat to cut.”
“I agree and could see doing a one mill increase right now,” said Billick.
“I like the idea of giving the community time to discuss this issue more in depth,” said councilmember Anna Fenerty.
“While the mill levy hasn’t been increased since 2014, there has been an increase in out-of-pocket expenses for property owners,” said councilmember Gabi Prochaska.
MacMillan again advocated for pushing ways to “ease the burden” of a mill levy increase for people “that would feel it the most.”
“We have talked about the danger of an ‘amenities trap’ as town changes and wealthier people approve new amenities that they can afford but hurt people on fixed incomes,” said Billick. “The difference is that roads feel like a ‘need.’ They aren’t just a ‘want.’”
“I would say the recent library vote that rejected a new facility in CB South indicated that feeling,” said MacMillan.
“Talking about raising taxes is a tough conversation,” said Prochaska who suggested not filling a town staff communications position along with a property management position that could be hard but necessary.
Council agreed to not eliminate an unfilled deputy marshal’s position.
“If a job is not filled that seems a place to move forward,” agreed Fenerty.
Community development director Troy Russ emphasized the need for a communications position given upcoming discussions over the Community Compass and things like potential major zoning changes. MacDonald acknowledged town was doing an inadequate job managing its 54 properties and said the need for a focused property manager would be beneficial.
Councilmember Kent Cowherd agreed. “I’d support the property manager position. town needs to be responsible for town assets,” he said. “I could go with a small one mill increase this year.”
“It is inevitable, so I am in favor of an additional mill,” said MacMillan. “Sometimes it is irresponsible to not do something.”
“I can’t believe I’m saying this, but I’d advocate for one mill this year to help with the general fund,” said Goldstone.
“Or go with zero and take money from the general fund reserves this year to cover the Streets and Alley fund shortfall and spend next year really looking at expenditures,” said Magner. “And it’s not just people on a fixed income that will hurt. I heard from an irate constituent today with a commercial space who said another $1,000 a year will make him seriously think about relocating his business outside of town.”
Town finance director Kathy Ridgeway was clear that the staff’s work had resulted in deep cuts. “I think we’ve cut operational expenses as much as can be cut,” she said. “We can cut projects outside of the operational budget.”
“I’m at raising it zero right now. Our electorate doesn’t want a tax increase right now,” said Fenerty.
Billick summarized that the majority of council seemed okay not filling the communications and property manager positions but wanted a new deputy marshal. He said council would return to the idea of a small mill levy increase at the next meeting in December and then take a deeper look for a possible bigger increase next spring.
“Holding off right now gives us a chance to get public feedback and decide what to do at the next meeting,” he said. “Then in the spring we can more methodically look at the budget and decide how much to raise the mills.”