The Crested Butte News Serving the Gunnison Valley since 1999
“Deeper discussion” coming next spring
[ by Mark Reaman ]
The Crested Butte town council will not raise the street and alley mill levy for 2025 in order to give Crested Butte property owners some tax relief for at least a year. They will have a deep discussion next spring on how to fund the town’s street and alley budget, and councilmembers indicated they would be willing to lower the amount of the town fund balances and reserves Crested Butte has traditionally held. Fund balance includes restricted TABOR and debt service reserves, 100% of its annual operating budget and additional unrestricted funds.
While formally agreeing with a 6-1 vote to not raise the mill levy, the general council sentiment was closer to 4-3 as the council voiced a need to eventually have streets and alleys pay for themselves again through its own fund and not continually borrow from the spendable reserves in the general fund. But current spendable reserves in the general, and operating reserves in the street and alley funds, could backfill an expected 2025 deficit.
Crested Butte finance director Kathy Ridgeway on Monday presented the council with four options: 1) Have zero street mill levy increase and backfill the fund with the General Fund; 2) Have no street mill levy increase and backfill the deficit through the street and alley operating reserves; 3) Implement a one mill levy increase and backfill with the General Fund or 4) put in a one mill increase and backfill with the street fund operating reserves.
In 1987, Crested Butte voters approved using up to 16 mills in property tax a year for streets and alleys. The rate charged property owners currently sits at eight mills. A one mill increase in 2025 would generate about $201,651 over 2024 revenues. It would cost residential property owners about $63 per million dollars in assessed value and commercial property owners approximately $270. Council ultimately chose option 2 with the understanding they could decide in the spring where to take the money to fund the deficit.
“For me the major question is do we want the street and alley fund to be self-sustaining and to pay for its endeavors,” Ridgeway asked the council. “If we don’t, how do we backfill it?”
Ridgeway and the staff had made some budget cuts including not filling some currently open positions (a proposed property manager and communications specialist) in order to close the gap between what would be generated by a staff recommended three-mill increase to fund street maintenance and major repairs. Most of these cuts will remain in the budget for now until council has time to discuss long-range financial planning in the spring.
“I think it is important to get streets and alleys to be a self-sustaining fund,” said councilmember Kent Cowherd. “The question is how. Maybe one way is reducing the amount of general operating fund reserves we have been holding. I also want to state clearly that I think we should have a property manager position to safeguard our assets as we build more of them (affordable housing units) this year. Ideally, I would go with an additional one mill now, reduce the general operating reserves from 100% to 90%, and go with at least a part-time property manager.”
“I’m okay with zero at this time,” countered councilmember Beth Goldstone noting there were adequate reserves to comfortably cover the expected deficit for at least the following year.
“I’m a pretty solid zero at this point,” agreed councilmember Gabi Prochaska. “I want to see the streets and alleys fund be self-sustaining, but I would love to ease into it more. With the recent valuation increases property owners have experienced, I’d like to soften that blow. I too would like to talk about our operating reserve percentages and maybe have different percentages for different funds.”
“I’m in favor of zero,” said councilmember Anna Fenerty. “It makes sense to keep the backfill in the street and alley fund and have a deeper discussion in the spring.”
“I’m at one,” said councilmember Jason MacMillan. “Originally, I was at one, two or even a three mill increase but I appreciate the burden people are feeling. At the same time, I feel that if we keep digging a hole it will be harder to get out of it. I feel like one mill would be an appropriate baby step. Town could be facing bigger costs and bigger cuts to make that fund whole and self-sustaining.”
“I remain at zero,” said councilmember Mallika Magner. “The GCEA is contemplating another 4.5% electric rate increase. I don’t want to add more to that burden as town continues to push electric. I am happy to see my colleagues more appreciative of a zero increase in the mill levy.”
“I’m okay with zero but prefer one because I’m concerned that the street and alley fund has to be self-sustaining at some point,” said mayor Ian Billick. “I’m afraid of big jumps. We’ve seen that result when councils put off hard decisions. Given cost escalations, I’m not sure how we deal with eventual bigger jumps. We have had some good sales tax increases so being slow to raise the mill levy is appropriate. We will have to have that deeper discussion in the spring.”
Billick added up the council preferences and concluded “it looks like council is at zero. I would suggest for budget purposes leaving the deficit backfill in the street and alley fund.” It was clear the budget could be amended if council decided to use the General Fund instead in the spring. Hence the council went Ridgeway’s option 2.
Magner said when it was time for the deeper discussion, she wanted to know what towns like Crested Butte used percentagewise for operating reserves.
Cowherd again asked that council approve at least a part-time property manager position for town in 2025. Billick said there didn’t seem to be a majority of council feeling the same way.
“It is an important and possibly useful position but not next year given the discussion,” said Goldstone.
“I would be cautious that something that is blooming in front of us turns into something critical,” said Cowherd.
Ultimately the council voted 6-1 to not raise the mill levy for 2025. Cowherd voted against the motion and indicated he will likely bring up the position again in the spring.
