Mt. Crested Butte 2015 budget continues strong financial trend

“We’re optimistic that summer will stay strong”

The Mt. Crested Butte Town Council began the approval process of its 2015 budget on Tuesday, November 18 with little discussion or debate. The numbers, however, speak for themselves. The town has successfully maintained general fund reserves at 50 percent of expenditures—something that hasn’t always been possible in recent years—and it will be able to fund capital projects such as roadwork next summer.

“The highlight of the budget is our general fund,” said finance officer Karl Trujillo. “Over the last few years, by keeping our fund balance at 50 percent of expenditures, we’ve been able to transfer a lot of money to the capital fund. Next summer we’ll be doing a lot of road work for cash instead of a bond, which would cost taxpayers money.”
Trujillo explained that when general fund reserves exceed 50 percent of expenditures, the difference is transferred to the capital fund. In the 2015 budget, the general fund balance is projected to start the year at $1,262,570 and finish at $1,264,422, with expenditures reaching $2,551,139. That will allow the town to transfer $257,000 into the capital fund.
This might sound like basic accounting, but the financial picture hasn’t always been so rosy in Mt. Crested Butte. After the real estate market crashed, Trujillo says the subsequent drop in assessed values and property tax income hit the town hard. Whereas the town could once expect around $800,000 in property tax income, it now gets about $340,000. At one point, the general fund reserves fell as low as 14 percent of expenditures.
Town manager Joe Fitzpatrick says the town had to take significant measures to continue operating under the reduced income. “We cut back expenses, we lowered staff, and we were frugal and we didn’t do things,” he said.
In 2011, the town adopted a five-year plan to get back on track and aimed to restore the general fund reserves to 50 percent of expenditures by 2016. They hit that milestone in 2013, three years ahead of schedule.
According to Fitzpatrick, year to date, 2014 sales tax collection is 13 percent higher than budgeted and September sales tax collection in Mt. Crested Butte was about 30 percent over budget. That kind of growth has certainly helped the town keep its budget on track.
The benefits are clear. Next summer, capital funds will be used to complete road maintenance after surveying company SGM finishes an assessment to help the town prioritize improvements. And having a healthy fund balance also made it possible to meet matching fund requirements for a grant that will enable Mt. Crested Butte to finish the recreation path between Marcellina Lane and Winterset Drive.
“That’s huge because with increasing summer activity, we have more people walking Gothic Road and way more cars,” Fitzpatrick said.
The question now becomes how much growth can be expected in the future. The budget calls for a 4 percent increase in sales tax collection, instead of counting on the 13 percent seen this year.
“We have to ask, is the 2014 summer our true summer, or an anomaly? Or should we really be averaging the last five years or so?” Fitzpatrick said. “We’re optimistic that summer is going to stay strong, and we’re taking the approach that summer will remain strong.”