Glenwood Springs prepares for ‘year of reckoning’
October 7, 2011
GLENWOOD SPRINGS – The city of Glenwood Springs will take an even more conservative approach to budget revenues for 2012 than it did heading into this year.
But the coming budget year will be “a year of reckoning for the city,” according to City Manager Jeff Hecksel.
On the one hand, “The local economy has improved in 2011 and, in general, revenues have started to rebound,” Hecksel notes in his 2012 budget message to the City Council.
However, city sales taxes, which make up roughly half of city’s general fund revenues, have not rebounded to pre-recession levels, and may not for years to come, he said.
As the city cuts back on its spending of reserve funds, that will mean about a $1 million reduction in general fund expenditures for 2012, including some staff reductions, Hecksel recommends in the proposed budget.
Hecksel is proposing an $11.3 million general fund budget for next year, down from $12.25 million this year and about $521,031 less than requested by department heads.
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All funds included, including utilities and other enterprise funds, special revenue funds such as tourism promotion, streets, public transit and capital projects, the city is looking at a total of $51.6 million in spending for 2012.
“The most notable changes on the expenditure side can be seen in the sales tax supported funds,” Hecksel explained.
That would include the elimination of the equivalent of eight full-time staff positions in city operations.
“Five of these are through attrition, and three through layoffs,” he writes in the budget recommendation. “In the short term, public safety services (police and fire) are affected … in the long term, development, public safety and recreation services will likely be affected.”
But that also depends on how much sales taxes and other revenue sources continue to rebound into next year, Hecksel said.
At this point, 2011 sales taxes are expected to come in about 1 percent over last year. But they remain about 19 percent below 2008 levels and are down about 13 percent compared to 2006, he said.
The proposed general fund budget for 2012 anticipates sales tax revenues of about $5.5 million. That would reflect about a 2 percent increase over this year, based on current trends.
That’s a more conservative approach than the city took last year, when it initially projected sales taxes would increase 5 percent over 2009 levels.
The city began to show positive gains over 2010 early in the year, but didn’t start to surpass 2009 collections until July and August. The city implemented a series of budget reductions after the first quarter to reflect the lower numbers.
When the impacts of the recession began to hit Glenwood Springs in mid-2008, the city developed a strategy to draw down some of its reserves for a range of capital projects.
“The two primary benefits anticipated were employment, and taking advantage of lower prices in the construction industry,” Hecksel wrote in his budget summary.
Among the projects completed or still under way have been the Donegan Road improvements, the Atkinson Trail, the new wastewater treatment plant, the whitewater park, the LOVA trail, and the 27th Street bridge repairs.
A copy of the proposed 2012 city budget can be found on the Glenwood Springs municipal website at http://www.cogs.us/. The City Council is scheduled to have a public hearing on the budget at its Oct. 20 meeting.