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Budgets — balancing with less
By Norma Engelberg
It’s budget time and local cities are trying to balance their 2010 budgets with fewer dollars.
Woodland Park, Victor and Cripple Creek city councils have begun budget hearings and are giving and getting an earful about budget cuts. Cripple Creek and Victor have suspended budget hearings until after the Nov. 3 election at which time Cripple Creek will have two new councilmembers. Victor will have an almost entirely different council. Woodland Park elections won’t take place until April.
Copies of proposed budgets and meeting schedules are available at the respective city halls.
Woodland Park
Woodland Park City Manager David Buttery introduced the city’s 2010 draft budget earlier this month with words of caution.
“The 2008 budget was introduced with an overarching feeling of excitement,” he said. “There was an overarching feeling of security for the 2009 budget, but this year the overarching feeling is one of caution.”
On paper, Woodland Park has a fairly healthy fund balance or reserve for emergencies, but Buttery said there will be changes in that account this year. Previously, when there were fewer financial worries, the city kept a reserve based on 10 percent of its total budgeted expenditures. These expenditures include personnel, operations and maintenance, capital leases and the revolving loan fund.
In his introduction summary, Buttery said he is rethinking that strategy and plans to keep enough money in the reserve to fund all of the expenditures except the revolving loan fund, which is used to replace equipment and the projects portion of matching funds for grants. Everything else he considers “people, parts and promises” — obligations that have to be paid.
Previously, the city reserve included the $1 million due to the budget from the Downtown Development Authority, but this money is not a “liquid asset” so Buttery wants to begin putting $200,000 a year into the reserve to replace this money. The new budget proposal reflects that plan.
The proposed budget includes no raises for city personnel and no beautification projects. Vehicle and equipment replacements would be put on hold, and the annual Christmas parties are canceled.
Buttery proposed cutting out entirely the city’s community investment program, but he was overruled by city council. The fund will have about $20,000 instead of the $45,000 that was available for 2009. Councilmember Jon DeVaux said the Community Investment committee also can begin a fundraising campaign of its own while encouraging the entities that usually benefit from community investment to redouble their fundraising efforts.
Councilmembers said that without some level of community investment, certain traffic-drawing events could disappear, which would have a negative impact on already slim revenue.
The new budget proposal will not mean layoffs, but with one possible exception, there also will be no new hires. The exception is a part-time employee to work in the development authority and economic development offices. The part-time employee’s salary would come out of both budgets. This would still mean a cut in personnel expenditures because the full-time contract with Bob Harvey, authority projects manager, was not renewed.
With the loss of gaming impact funding next year, the Woodland Park Police Department might have been faced with the loss of an officer but Police Chief Robert Larson cut the department’s uniform budget and curtailed discretionary training to save enough money to keep the patrol officer on the payroll.
Some streets and sidewalks projects still will take place because they were funded by grants and the matching funds were already budgeted in 2009.
Most of the city’s revenues come from sales and property taxes. Of these, sales tax is the most volatile, said Mayor Steve Randolph.
“That’s true,” said city Finance Director Kellie Case. “But the city has an advantage in that much of its sales tax revenues come from grocery store sales. That’s the reason we still have food tax — people still have to eat.”
In an emergency, with no revenue coming in at all — something that would be extremely rare, Buttery said — the city has enough money in reserve to keep services going without detrimental effect for about five weeks.
“We’re not in any danger of going bankrupt,” he said. “If there is a catastrophe we would have helpers. We have insurance, there would be government help and short-term loans are also a possibility. We are positioning ourselves for sustained operations. We’re capping spending, making conservative revenue predictions and building our reserve.”
There will be several more work sessions on the budget as the state-mandated, balanced-budget deadline nears. Municipalities have to approve a balanced budget by Dec. 15.
Cripple Creek
In Cripple Creek, cuts are considered inevitable, as the city grapples with dismal gaming tax and device fee revenue and large projected infrastructure expenditures. There are several factors involved with losses in these revenue sources.
In his summary of the proposed 2010 budget, Cripple Creek Finance Director Paul Harris said the change to 24-hour gambling, a $100 bet limit and the addition of new games hasn’t had the positive effect its proponents hoped it would. Also, although the opening of the Wildwood Casino brought in 700 new gambling devices, the total number of devices actually decreased because the local market couldn’t absorb all the new devices, and some marginal operators went out of business.
Harris created a “middle of the road” projection for gambling in 2010.
“This ... is not the best case or the worst case,” he said. “The best case would be that Amendment 50 has such a positive impact that casinos have to add devices in 2010 or that the market would support the opening of a new facility.”
In contrast, Harris’ worst case would be the closing of another casino.
He had some suggestions to increase city revenues that include:
Increasing local sales tax by 1 percent — food is not taxed in Cripple Creek and would not be affected. An increase would have to be approved by voters in the 2010 November election.
Increase device fees. These fees haven’t been raised since 1991 when gaming began. This also couldn’t be done before 2011.
Adding a lodging tax. The city has never had a lodging tax, and Harris points out that this tax would be paid by visitors rather than locals. This would have to be approved by voters.
Reinstate the $6,000 water- and sewer-tap fee for residential, owner-occupied properties. In the past, the city has waived this fee.
Increase water and sewer rates. The city hasn’t raised rates in 15 years.
Sell water to outside users. The city is blessed with more water than it needs, Harris said, and this could become a source of revenue.
In the proposed budget, Cripple Creek has cut four of its five city funds. As it now stands, the General Fund, which covers the city’s overall operations, will be cut 3.4 percent; the Historic Preservation Fund, most of which comes from gaming taxes, will be cut 14.7 percent; the Economic Development Fund, the fund that is used for economic development projects, will be cut 18.6 percent; and the Medical Plaza Fund, which after a full year of operation came in at a loss of $182,000 and will need to be subsidized from the Economic Development Fund, will be cut 16.2 percent.
The one fund that is projected to grow is the Enterprise Fund, which encompasses water distribution, sewage collection and infrastructure improvement projects, such as curb and gutter, sidewalks, new water and sewer lines, and drainage improvements. This fund has a projected growth of 3.9 percent.
At the last three city council meetings, council and Mayor Dan Baader have been entreated to keep intact a variety of projects and services, especially the subsidy to the Thin Air Theatre Group, which runs entertainment at the Butte Opera House, and the city marketing department.
At the last meeting, Wes Kime, owner of Cripple Creek Coffee, said local small businesses rely on the city to market events and other attractions that bring in visitors.
“I have had a lot of local support but without visitors, I’m dead,” he said.
Marketing and events director Jan Hamilton outlined several funding options for her department, all of which would reduce funding to some of the city’s special events and other marketing projects. The options ranged from $700,000 to $300,000 that would cut funding to all events and to a variety of marketing media.
After Hamilton’s presentation, Councilmember Gary Ledford said none of the options fit the reality of the city’s financial situation and that he hasn’t seen any return for marketing dollars spent in the past and doesn’t expect to see any return in the future.
“Even if the city cut out all marketing there would still be marketing by casinos and the [Cripple Creek & Victor] mine,” he said. “Our marketing efforts just aren’t working, and we can’t afford to keep spending money on them.”
Baader said council doesn’t want to see events disappear, especially Donkey Derby Days, which has been celebrated for 79 years, and the Salute to the Armed Forces. But those were the only events he mentioned as being necessary.
Ray White, director of heritage tourism, gave three budget options for his department, which oversees the Pikes Peak Heritage Center, the Outlaws & Lawmen Museum of the Welcome Center. All three options include cuts ranging from 19 percent to 45 percent but the last option White called “toxic.” He also proposed collecting a $2 or $3 fee from Heritage Center visitors.
Later in the meeting, Tom Cooper, president of the Two Mile High Club, asked city council if they wanted the city to become a casino town with nothing to bring in other kinds of visitors.
Victor
Victor has the smallest budget but some of the biggest funding problems of the three cities. With a loss of gaming funds and mineral impact funds to the tune of $385,000, the city is looking for ways to replace that funding for its police, streets and fire departments.
Some projects will continue in 2010 because either the funds were budgeted in 2009 or they are funded with grants. These include water and wastewater plant improvements, drainage and sidewalk improvements and information retrieval systems.
The city also is faced with increasing its reserves while maintaining city services. There have been a number of meetings with a Colorado Department of Local Affairs representative to find solutions. In the final analysis, the city’s 2010 budget — with totals for all funds — is projected to have revenues of $1.9 million, expenditures of $1.7 million and a depleted general fund reserve balance of about $13,000.
There are reserves built in to other funds — the conservation trust fund, water fund and water and wastewater enterprise fund, to name the most prominent — that could keep these departments running for awhile in an emergency.
Woodland Park, Victor and Cripple Creek city councils have begun budget hearings and are giving and getting an earful about budget cuts. Cripple Creek and Victor have suspended budget hearings until after the Nov. 3 election at which time Cripple Creek will have two new councilmembers. Victor will have an almost entirely different council. Woodland Park elections won’t take place until April.
Copies of proposed budgets and meeting schedules are available at the respective city halls.
Woodland Park
Woodland Park City Manager David Buttery introduced the city’s 2010 draft budget earlier this month with words of caution.
“The 2008 budget was introduced with an overarching feeling of excitement,” he said. “There was an overarching feeling of security for the 2009 budget, but this year the overarching feeling is one of caution.”
On paper, Woodland Park has a fairly healthy fund balance or reserve for emergencies, but Buttery said there will be changes in that account this year. Previously, when there were fewer financial worries, the city kept a reserve based on 10 percent of its total budgeted expenditures. These expenditures include personnel, operations and maintenance, capital leases and the revolving loan fund.
In his introduction summary, Buttery said he is rethinking that strategy and plans to keep enough money in the reserve to fund all of the expenditures except the revolving loan fund, which is used to replace equipment and the projects portion of matching funds for grants. Everything else he considers “people, parts and promises” — obligations that have to be paid.
Previously, the city reserve included the $1 million due to the budget from the Downtown Development Authority, but this money is not a “liquid asset” so Buttery wants to begin putting $200,000 a year into the reserve to replace this money. The new budget proposal reflects that plan.
The proposed budget includes no raises for city personnel and no beautification projects. Vehicle and equipment replacements would be put on hold, and the annual Christmas parties are canceled.
Buttery proposed cutting out entirely the city’s community investment program, but he was overruled by city council. The fund will have about $20,000 instead of the $45,000 that was available for 2009. Councilmember Jon DeVaux said the Community Investment committee also can begin a fundraising campaign of its own while encouraging the entities that usually benefit from community investment to redouble their fundraising efforts.
Councilmembers said that without some level of community investment, certain traffic-drawing events could disappear, which would have a negative impact on already slim revenue.
The new budget proposal will not mean layoffs, but with one possible exception, there also will be no new hires. The exception is a part-time employee to work in the development authority and economic development offices. The part-time employee’s salary would come out of both budgets. This would still mean a cut in personnel expenditures because the full-time contract with Bob Harvey, authority projects manager, was not renewed.
With the loss of gaming impact funding next year, the Woodland Park Police Department might have been faced with the loss of an officer but Police Chief Robert Larson cut the department’s uniform budget and curtailed discretionary training to save enough money to keep the patrol officer on the payroll.
Some streets and sidewalks projects still will take place because they were funded by grants and the matching funds were already budgeted in 2009.
Most of the city’s revenues come from sales and property taxes. Of these, sales tax is the most volatile, said Mayor Steve Randolph.
“That’s true,” said city Finance Director Kellie Case. “But the city has an advantage in that much of its sales tax revenues come from grocery store sales. That’s the reason we still have food tax — people still have to eat.”
In an emergency, with no revenue coming in at all — something that would be extremely rare, Buttery said — the city has enough money in reserve to keep services going without detrimental effect for about five weeks.
“We’re not in any danger of going bankrupt,” he said. “If there is a catastrophe we would have helpers. We have insurance, there would be government help and short-term loans are also a possibility. We are positioning ourselves for sustained operations. We’re capping spending, making conservative revenue predictions and building our reserve.”
There will be several more work sessions on the budget as the state-mandated, balanced-budget deadline nears. Municipalities have to approve a balanced budget by Dec. 15.
Cripple Creek
In Cripple Creek, cuts are considered inevitable, as the city grapples with dismal gaming tax and device fee revenue and large projected infrastructure expenditures. There are several factors involved with losses in these revenue sources.
In his summary of the proposed 2010 budget, Cripple Creek Finance Director Paul Harris said the change to 24-hour gambling, a $100 bet limit and the addition of new games hasn’t had the positive effect its proponents hoped it would. Also, although the opening of the Wildwood Casino brought in 700 new gambling devices, the total number of devices actually decreased because the local market couldn’t absorb all the new devices, and some marginal operators went out of business.
Harris created a “middle of the road” projection for gambling in 2010.
“This ... is not the best case or the worst case,” he said. “The best case would be that Amendment 50 has such a positive impact that casinos have to add devices in 2010 or that the market would support the opening of a new facility.”
In contrast, Harris’ worst case would be the closing of another casino.
He had some suggestions to increase city revenues that include:
Increasing local sales tax by 1 percent — food is not taxed in Cripple Creek and would not be affected. An increase would have to be approved by voters in the 2010 November election.
Increase device fees. These fees haven’t been raised since 1991 when gaming began. This also couldn’t be done before 2011.
Adding a lodging tax. The city has never had a lodging tax, and Harris points out that this tax would be paid by visitors rather than locals. This would have to be approved by voters.
Reinstate the $6,000 water- and sewer-tap fee for residential, owner-occupied properties. In the past, the city has waived this fee.
Increase water and sewer rates. The city hasn’t raised rates in 15 years.
Sell water to outside users. The city is blessed with more water than it needs, Harris said, and this could become a source of revenue.
In the proposed budget, Cripple Creek has cut four of its five city funds. As it now stands, the General Fund, which covers the city’s overall operations, will be cut 3.4 percent; the Historic Preservation Fund, most of which comes from gaming taxes, will be cut 14.7 percent; the Economic Development Fund, the fund that is used for economic development projects, will be cut 18.6 percent; and the Medical Plaza Fund, which after a full year of operation came in at a loss of $182,000 and will need to be subsidized from the Economic Development Fund, will be cut 16.2 percent.
The one fund that is projected to grow is the Enterprise Fund, which encompasses water distribution, sewage collection and infrastructure improvement projects, such as curb and gutter, sidewalks, new water and sewer lines, and drainage improvements. This fund has a projected growth of 3.9 percent.
At the last three city council meetings, council and Mayor Dan Baader have been entreated to keep intact a variety of projects and services, especially the subsidy to the Thin Air Theatre Group, which runs entertainment at the Butte Opera House, and the city marketing department.
At the last meeting, Wes Kime, owner of Cripple Creek Coffee, said local small businesses rely on the city to market events and other attractions that bring in visitors.
“I have had a lot of local support but without visitors, I’m dead,” he said.
Marketing and events director Jan Hamilton outlined several funding options for her department, all of which would reduce funding to some of the city’s special events and other marketing projects. The options ranged from $700,000 to $300,000 that would cut funding to all events and to a variety of marketing media.
After Hamilton’s presentation, Councilmember Gary Ledford said none of the options fit the reality of the city’s financial situation and that he hasn’t seen any return for marketing dollars spent in the past and doesn’t expect to see any return in the future.
“Even if the city cut out all marketing there would still be marketing by casinos and the [Cripple Creek & Victor] mine,” he said. “Our marketing efforts just aren’t working, and we can’t afford to keep spending money on them.”
Baader said council doesn’t want to see events disappear, especially Donkey Derby Days, which has been celebrated for 79 years, and the Salute to the Armed Forces. But those were the only events he mentioned as being necessary.
Ray White, director of heritage tourism, gave three budget options for his department, which oversees the Pikes Peak Heritage Center, the Outlaws & Lawmen Museum of the Welcome Center. All three options include cuts ranging from 19 percent to 45 percent but the last option White called “toxic.” He also proposed collecting a $2 or $3 fee from Heritage Center visitors.
Later in the meeting, Tom Cooper, president of the Two Mile High Club, asked city council if they wanted the city to become a casino town with nothing to bring in other kinds of visitors.
Victor
Victor has the smallest budget but some of the biggest funding problems of the three cities. With a loss of gaming funds and mineral impact funds to the tune of $385,000, the city is looking for ways to replace that funding for its police, streets and fire departments.
Some projects will continue in 2010 because either the funds were budgeted in 2009 or they are funded with grants. These include water and wastewater plant improvements, drainage and sidewalk improvements and information retrieval systems.
The city also is faced with increasing its reserves while maintaining city services. There have been a number of meetings with a Colorado Department of Local Affairs representative to find solutions. In the final analysis, the city’s 2010 budget — with totals for all funds — is projected to have revenues of $1.9 million, expenditures of $1.7 million and a depleted general fund reserve balance of about $13,000.
There are reserves built in to other funds — the conservation trust fund, water fund and water and wastewater enterprise fund, to name the most prominent — that could keep these departments running for awhile in an emergency.
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