Sales tax gains aid in planning city budgets
A rebound in retail sales this year could help ease at least some of the annual budget planning pain for municipalities in Garfield County, which are set to begin hashing out details for 2015 spending starting in early October.
Glenwood Springs City Manager Jeff Hecksel still cautions that, while he is optimistic about a 4.8 percent increase in sales taxes through July this year for the city, it’s difficult to plan budgets based on that until a more reliable trend is established.
“I am happy to report that things seem to be a little better than they had been, with the return of sales tax gains,” Hecksel said. “We do hope that trend continues.”
But sales tax revenues remain somewhat “volatile,” as evidenced in 2013 when the city barely met its projected 2 percent increase in sales tax revenues by year’s end.
This year’s budget was also based on a 2 percent sales tax increase, as will next year’s, Hecksel said.
Across Garfield County, proposed city and town budgets are expected to be made available to the public by Oct. 1, as required by state law and the city charters of both Glenwood Springs and Rifle.
Rifle City Council will likely begin reviewing 2015 budget figures at its regular Wednesday meeting next week. Rifle had a general fund budget this year of about $8 million.
Hecksel plans to give his introductory budget presentation to the Glenwood City Council during a pre-meeting work session on Thursday, Oct. 2. This year’s general fund budget for Glenwood was $11.8 million. That figure is expected to increase for next year, Hecksel said.
Likewise, the Carbondale Board of Trustees last week heard an overview of town finances to date, along with department budgeting goals and objectives for the coming year.
The Carbondale board is set to begin reviewing the proposed 2015 budget in earnest starting with an Oct. 7 work session to discuss the recreation and police department budgets. Carbondale has a general fund budget this year of about $7 million.
The smaller towns of New Castle, Silt and Parachute are on a similar track with their budget planning.
Glenwood electric costs increase
A particular concern going into 2015 for the city of Glenwood Springs is the ongoing increase in costs to run the city’s electric utility, Hecksel said.
The city was hit with a 12 percent wholesale electric increase in April from provider the Municipal Energy Agency of Nebraska, and just recently learned of another 6.5 percent interim rate increase.
“And we’re expecting another one in April of next year,” Hecksel said. “It’s not a good thing when we get these off-cycle rate increases, because it does throw our budget off.”
The city was able to pass along the earlier wholesale increase with a customer rate hike in July, but will have to absorb the interim increase until rates can be revisited again next summer.
“Our challenge will be to make sure we still have the cash flow going into next year, but we know our expenses are going to be more than our revenues,” he said.
As for the city general fund, Hecksel said he anticipates some increases based on an increase in demand for city services.
“Things have picked up, but our staffing is still at the same level as it was when we made cuts during the downturn,” he said.
Hecksel said the city was able to make up what had been about a $890,000 general fund deficit coming into this year with a combination of controlling expenses, pulling in more sales taxes than were projected, and some reserve spending.
Among the big questions for City Council to address will be how to meet a $1 million capital projects funding pledge in each of the next three years to help pay for the Grand Avenue Bridge replacement project.
At its meeting next week, City Council will set a budget work session schedule for October. A formal public hearing on the 2015 budget will be scheduled in November.
Carbondale weathering 133 work
The good news for Carbondale as it prepares its 2015 budget is that sales taxes are also up in that town, and the general fund balance remains healthy, according to Town Manager Jay Harrington.
That, despite the disruptions to business for much of the year and costs to the town related to the Highway 133 construction, he said.
“We have been using the general fund balance to support all capital work and most fleet purchases for the last few years,” Harrington said. The town’s share of the Highway 133 work is also paid for from general fund reserves.
The net impact is that the town is projecting a $4.3 million fund balance at the end of 2014, down from nearly $5.6 million at the beginning of this year, he noted.
That figure may change depending on reimbursements from Garfield County, which is also paying for a portion of the Highway 133 work. A Garfield Federal Mineral Lease District allotment for the project was also recently increased, Harrington said.
For 2015, the town will also need to reign in fund balance spending for park maintenance, which means the town has not been able to save for future parks projects, he said.
The town’s recreation sales and use tax fund balance has also been depleted in recent years, resulting in some items being paid for out of the general fund and no new park projects for the town.
The good news for Carbondale is that sales taxes are up 8.9 percent for the year through July, and the town brought in almost $300,000 more in FMLD funds than budgeted. The town also has a healthy streetscape fund balance, Harrington said.
Following the Oct. 7 meeting, Carbondale trustees are scheduled to meet Oct. 14 to discuss public works and utilities spending; Oct. 21 to review capital projects; Nov. 4 for a general budget work session; and Nov. 18 and 25 to discuss community funding requests.
Rifle funds ‘healthy,’ but tight
Meanwhile, Rifle City Council has tentatively set aside six dates in October to discuss the city’s 2015 budget with staff, City Manager Matt Sturgeon said. Each meeting will be publicly noticed, as required by law, and open to the public, he said.
Sturgeon said the city has been “weathering the storm fairly well since the financial downtown in 2009.”
“However, most rural areas, with some exceptions like resort communities, are still struggling more so than urban areas,” he noted.
He pointed out that communities in Colorado rely heavily on sales tax revenue to fund operations, and rural areas in particular are struggling because state property tax formulas and Internet retail sales make it difficult for small retail businesses to survive.
“Small merchants struggle to compete with online vendors not collecting sales tax and who don’t face 29-percent property valuation when computing commercial property tax,” Sturgeon said.
Rifle has seen an uptick in overall retail sales this year over 2013, similar to the municipalities on the east end of the county. Through July, Rifle sales taxes were still running about 4 percent ahead of last year.
The general fund, which pays for everyday city operations and things like police and street maintenance, also has a healthy reserve, Sturgeon said.
The Parks and Recreation fund is also healthy, he said, but has seen a decrease in revenues with the large number of capital improvements over the last eight years.
That is leading the city to focus more on operations and maintenance for the coming year, with less money available for capital projects, Sturgeon said.
He said the city’s water and wastewater utilities are having a more difficult time for many reasons. The slowdown in construction has caused the customer base to remain flat, which makes paying for maintenance and regulatory compliance more challenging.
With or without growth, the utilities must replace failing pipelines and comply with state and federal regulations, Sturgeon noted.
“We have a creative bunch of staff who consistently perform at high levels with the resources this community can afford,” he said.
The Rifle city budget will be considered at a formal public hearing in November, where any member of the public is free to address council. Budget and finance information is also available on the city’s website, at http://www.rifleco.org.
New Castle, Silt hold steady
The town of New Castle expects to see only a moderate “upkick” to its budget for 2015, mainly driven by retail sales tax and construction activity.
“We expect to see about a 2 percent increase in retail sales tax,” said Town Administrator Tom Baker. “Property tax will stay flat, as there is no reassessment until 2016 and we’re expecting building activity to be up slightly with a lift in construction.”
One of those construction projects will be the senior housing project next year at Clubhouse Drive and Castle Valley Boulevard, which will generate building permit and water tap fees.
“We’re looking at a modest upkick in economic activity in town, but no big change, nothing dramatic,” Baker said.
The New Castle Town Board will be holding budget hearings through the month of October, the first and third Tuesdays and a special meeting from 9 a.m. to 2 p.m. Saturday, Oct. 18.
For more information, call New Castle Town Hall at 984-2311.
The town of Silt expects to see a 4.5 percent increase in its budget for 2015, which will include the hiring for an additional police officer, bringing the total number of officers to seven.
Budget meetings, which are open to the public, will be held through October. The enterprise/ special revenue fund will be discussed on Oct. 13, the water treatment plant on Oct. 15 and the general fund only on Oct. 27.
“All of our funds are pretty much in line with 2013,” said Town Administrator Pamela Woods. “We’re also going to have 2.5 merit increase for town employees, with board approval.”
(Glenwood Springs Post Independent reporter Will Grandbois and Rifle Citizen Telegram Editor Heidi Rice contributed to this report.)
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