CB begins budget process with more details coming October 5

Sales tax slightly down, capital budget not keeping up

by Mark Reaman

It is budget time in local government-land and Crested Butte held its first work session on the 2027 budget on September 21. Town finance and administrative services director Lauren Hawcroft provided the council a background memo on the Community Compass priorities outlined by the council, the fund balances and projections, and the five-year capital plan.

In her memo she mentioned that the council last year reduced the amount of reserves each fund needed to hold, shrinking it from 100% of operational reserves to closer to 50% for most town funds. They also increased the street and alley mill levy from 8 to 10 mills for 2026. And the council has chosen to put on this November’s ballot a potential excise tax on non-primary homes in Crested Butte. Hawcroft said most town funds are expected to end the year in a healthy position. “The Capital Fund remains the one fund of real concern into Fiscal Year 2027, as major projects are drawing the fund down faster than incoming revenue can keep pace,” her memo stated.

She said staff is budgeting 2026 sales tax collections, the town’s major revenue source, to be down 1.6% this year based on what has been collected through July. (Editor’s Note: Preliminary August sales tax revenues in Crested Butte were also down to bring year-to-date collections off 2.9% compared to 2025. There are some late filers influencing those early numbers). The downturn is mostly blamed on last year’s lean ski season, especially in March. Most other tax revenue is flat or slightly up compared to a year ago. The “spendable reserves” in the general fund will amount to approximately $7 million at the end of 2026 with town’s overall total spendable fund balance at $10,722,000 in fiscal year 2027.

“Sales tax is trending lower to budget right now,” said town manager Dara MacDonald. “We will update it accordingly if the numbers come in better for August.”

As for expenditures, Hawcroft said the town is taking the expectation that overall operating costs will rise about 3%.

“Combining that increase with our decrease in sales tax, that is an almost 5% hit in real purchasing costs,” noted mayor Ian Billick.

While they have not yet received an insurance quote for 2027, staff is penciling in an expected 15% increase in that cost. That would amount to a $200,000 impact. No new employees will be hired but wages for those already there will likely go up an average of around 4% overall.

Councilmembers had initial questions on the size of the town vehicle fleet, the future costs to upgrade Rainbow Park playground equipment and the potential Irwin Lake work.

Major capital projects on the immediate horizon include a big upgrade to the marshal’s office and a renovation of Jerry’s Gym. Billick said the town could use up most of its general fund reserves paying for those two projects. The marshal’s office project has always anticipated a financial boost from the general fund and the hope is that the Gunnison County MetRec District will contribute to any upgrade for Jerry’s Gym. MacDonald said it is also time to refresh the Community Compass, and the continuing Gunnison Valley Corridor Plan will take staff time and money as will some work on the town property at Lake Irwin.

The retail cost of all desired capital projects in the five-year plan amounted to about $58 million. It was made clear that the $58 million would likely come in less based on things like grants received to help pay for projects and deferring projects that aren’t a major priority. Staff said they would break out capital projects that weren’t part of maintaining current core services and be more detailed on possible financial assistance with projects.

Many of the people appointed to the citizen’s budget review committee attended the work session by Zoom.

“We’ll have a much better handle on the actual numbers once the draft budget is presented on October 5,” concluded Hawcroft.