CB council discusses project priorities and mill levy

Raising property tax one or two mills…

By Mark Reaman

As part of ongoing 2026 town budget discussions, the Crested Butte council confirmed this week it will reduce its policy of holding extensive annual operating costs in reserves. General Fund operating expenses for 2025 were budgeted at $7.2 million. For years the town held 100% of general fund operating expenses in reserve and last month agreed to lower that to 75%. The council confirmed at the October 6 meeting it is ready to drop that percentage down to 50% which would still be considered a robust bank account by any government standard. 

Such a move would potentially free up a one-time amount of an additional $1.8 million in the general fund and close to $3 million when adding in reducing the capital reserve. That is on top of a spendable fund balance that comes with larger than anticipated revenues in recent years, primarily through sales tax. So, if approved by council, town would see a windfall of more than $6.2 million available in the general fund projected for the end of 2026.

The council basically liked the idea of lowering reserves, which was the staff recommendation, especially if some of that freed-up money was transferred to the street and alley fund to mitigate a potential property tax increase that appears to be looming in order to keep up with street maintenance in town. 

Councilmembers are sensitive to any mill levy increase but at least a small one appears likely for the street and alley fund. Currently that mill levy is set at eight mills. Voters have approved a levy that could rise to 16 mills. Staff has in the past year recommended another three mills be added in order to keep up with needed street repairs but council has pared it down to considering a one or two mill increase. 

Two mills would raise about $196,000 per mill or close to $400,000 total per year. Each individual mill would cost residential property owners about $68 annually for every $1 million their home is valued at or approximately $136 for two mills. For commercial property owners, the hit would be about $290 annually for every $1 million in value.

Public works director Shea Earley has told the council that given rising costs, the old model of saving $1 million for a major street project every five years no longer goes far. He said that the last project used the same money as five years before but was only able to do a portion of the work. He submitted a budget request for $1.5 million to be used for the next big project four years from now. 

Mayor Ian Billick said to be realistic, he didn’t think budgeting even $1.5 million was enough to keep on top of major road repairs.

Painting a bleak picture, Earley said that was probably true and said it now costs about $150,000 per block for the major street replacements some areas in town need. He estimated there were about 10 such blocks. Another 35 or 40 blocks need overlays, which cost approximately $50,000 per block, to keep them in decent shape. And if those were ignored too much longer, he indicated those streets would need the more expensive major overhauls in the future. “So, to minimally stay on top of the situation $2 million is probably appropriate for the five-year timeline,” Earley said at a September work session. 

The council all appeared comfortable raising that budget figure.

“Can we not only move some of the saved money from reducing reserves, but can we save money every year in operations to address some of that?” asked councilmember Mallika Magner.

“I can’t see not raising the mill levy at least a mill but maybe not three if we can find cost savings and use some of the reserve money,” said councilmember John O’Neal.

As explained by Billick at the October 6 meeting, the council could transfer some of the general fund money generated from lowering the reserve policy to reduce the need to raise the property tax to meet street and alley maintenance needs. He said by moving $1.4 million and raising the tax by two mills, the town would have enough money to cover expected road costs and have a small fund balance at the end of the five-year plan. If they transferred $2.4 million and added one mill, a similar result would occur.

Based on 2025 property valuations, each mill generates about $196,000. 

Town finance department staff will model more specific numbers based on those scenarios for the council to evaluate at its next meeting.

Council also agreed to fast forward major street repairs and instead of waiting five years to do major projects, they will do some major work next year in order to take advantage of lower costs.

Other than streets…

Looking at the town’s five-year capital plan there are several projects in the queue, but several have been there for years, and others have very loose cost approximations. Council discussed their immediate capital priorities at the September 15 council work session and there seemed to be a focus on three in particular: a renovation and expansion of the current marshal’s building; a significant upgrade to Jerry’s Gym in the town hall; and how to at least minimally maintain the current fire station after the fire district moves into its new campus later this year.

Parks and Rec director Janna Hansen said Jerry’s Gym in the town hall was almost 100 years old and was crumbling apart. She said it is an existing amenity and one of the few indoor recreation spaces in the North Valley. The council seemed to agree it was a priority.

“Do we have to do the gold standard with improvements?” asked Magner. “Can we do modest improvements. Something that seems more Crested Butte than Telluride?”

“There are minimum standards for public buildings,” said councilmember Kent Cowherd. 

“It would be nice to fix it up enough so it could be used for another 100 years,” said councilmember Anna Fenerty. “We’ve been putting band aides on it so long that now it is a big project.”

“I agree we should consider various design alternatives but just the base improvements will probably be a lot,” said Billick. 

“It’s an existing asset and we should make the most of it,” said O’Neal. 

The increasingly crowded marshal’s office is overdue for an upgrade, which will start next summer. 

“That project has been in line for years and it will take the facility from about 2,000 square feet to 4,000 and include a garage for vehicles,” explained town manager Dara MacDonald. “It is a cheaper direction than having the marshals go to the old fire station. That would need a lot of work just to meet codes.”

She explained that a change in building use triggers building code compliance. The fire hall was built in the 1970s which had very different (and very few) building codes. 

But council expressed awareness that the public is disappointed that the old Center for the Arts building was left to degrade to a point it probably has to be demolished to be useful and they did not want a deteriorating empty building on their hands. They want to make sure the town spends money on keeping the fire station building intact.

MacDonald said the building won’t fall down tomorrow, and the plan was to have the marshals temporarily move into the space while renovations were being done on the current facility. They would likely be in there through the summer of 2027. It was a matter of how much money to spend on upkeep. She said that for example, new windows were needed throughout the building. But staff was wary of spending a lot of money before knowing what would go eventually into the building.

“I think it’s important we reach out to the public and see what they want in the old fire hall,” said councilmember Gabi Prochaska. 

“I’m not ready to have that public discussion until we can use it after the marshals leave,” said councilmember Beth Goldstone.

“I think spending money to gather information from the public soon is money well spent,” said Prochaska. 

O’Neal said he desired more complete information on what costs would be. “What will it cost to keep it stable and then what will it cost to make it useable,” he asked.

“Is there an opportunity for Mountain Express to use the building?” asked Fenerty.

“I have no doubt that you will see public works equipment in that space as soon as the fire department leaves,” said MacDonald. 

“To me the priorities are Jerry’s Gym and the marshal’s office,” said Billick. “Along with maintaining the old fire hall and not putting the mills up too much.”

“We don’t want to burden the residents more,” agreed Magner.

No official budget decisions have been made by the council and their discussions will continue into November.