GLENWOOD SPRINGS — A proposed $11.8 million budget to run the city of Glenwood Springs next year falls about $1 million short in the projected revenue department, according to City Manager Jeff Hecksel.
That deficit, which will require either cuts, new revenues, use of some of the city’s general fund reserves, or a combination thereof to make up, will be a primary topic of discussion as City Council begins its 2014 budget sessions this week.
“That’s a lot of money, and not something we can make up over the course of a year,” Hecksel advised council members during a preliminary budget presentation Oct. 3.
“We have had good oversight and management practices, and we have been diligent about managing our resources,” he said. “The reality is that the city is in the service business, and it takes people to provide service.”
As a result, any significant cuts would likely impact jobs, Hecksel.
It’s a question that doesn’t necessarily need to be answered until early in 2014, after the final numbers for this year are in, he said.
Contributing to the problem, though, is a $93,400 decrease in property taxes, a $46,700 decrease in mineral lease revenues that come to the city, and a $189,700 drop in severance tax receipts, according to Hecksel’s budget report.
Sales taxes, which make up the bulk of the city’s general fund revenues, while projected to be up about 2 percent this year, are still down about 12 percent compared to 2008 levels, he said.
Several things could happen over the next three months to help improve the city’s budget situation, Hecksel said.
One would be voter passage of the proposed 2 mill property levy to maintain city fire and ambulance services, which is on the Nov. 5 ballot.
“That will make a meaningful difference in that [$1 million shortfall] number,” Hecksel said of the proposed fire tax, which would raise about $350,000 annually.
Also at the Oct. 3 meeting, council unanimously passed a resolution supporting the new fire department tax, which is proposed to sunset after five years. The rural Glenwood Springs fire district is also asking for a 2 mill increase in its existing mill levy.
“Should this pass, it does shore up funding for fire and EMS, and we won’t have to transfer money out of the general fund to cover that shortfall,” Mayor Leo McKinney said. “It comes down to two choices, we either increase revenues or we cut services.”
The proposed fire tax, at 2 mills, would cost the owner of a $250,000 home about $40 per year, and about $90 on a $500,000 home, according to backers of the tax proposal.
The risk of reducing fire protection services, if that results in slower response time, is an increase in homeowners insurance, Councilman Stephen Bershenyi said.
“That could be a lot more in a year’s time than the cost of this tax increase,” he said.
Added Councilman Matt Steckler, “I’m not a big fan of tax increases, but this is unfortunately a necessary one.”
In addition to increased expenditures in the city’s general fund, expenses are also projected to go up in the city’s water/wastewater and electric funds, Hecksel said.
City Council will begin to dig into the details of the proposed 2014 budget at a series of upcoming work sessions, beginning at 5:30 p.m. Oct. 10 and continuing Oct. 17 and 24.