Glenwood’s June sales tax revenues drop 17 percent, triggering furloughs |

Glenwood’s June sales tax revenues drop 17 percent, triggering furloughs

John Gardner
Glenwood Springs correspondent
Aspen, CO Colorado

GLENWOOD SPRINGS – A 17 percent decline in Glenwood Springs’ sales tax revenues for June was not what city officials were hoping to see.

Glenwood Springs Mayor Bruce Christensen said city officials were not expecting to see an increase, compared to June 2008, but were hoping for at least a “lesser decline.” That hope was based on June events such as the Strawberry Days Festival as well as two bike tours, which brought more than 4,000 cyclists through town. June is typically the third highest grossing month for sales tax behind July and August.

“It was really disturbing,” Christensen said about the declines.

Glenwood City Manager Jeff Hecksel agreed, noting a major contributing factor to the revenue loss is the lack of construction in the area. The decline in construction leads to fewer building materials being sold, which definitely has an impact on sales tax revenue.

“The June sales revenues were clearly a disappointment,” Hecksel said. “We are down everywhere, but we see a decline in building and supplies. Whether the visitors that were here didn’t spend as much as they normally would, or maybe we did have fewer visitors, I don’t know, but I think the lack of construction activity is the biggest contributor.”

The yearly declines have caused Hecksel to make some decisions, like city administration and staff furlough days, as a cost-saving step. And while he didn’t think furloughs would happen until September or October, Friday was the first of three scheduled furlough days for city administration. Hecksel was also on furlough that day.

Two more furlough days are scheduled for Sept. 4 and Oct. 2, Hecksel said. However, the difference will be that all city staff will be off on those days, basically shutting down city operations, except for essential personnel like fire, police, and a few other city positions.

Furlough days are days off without pay. According to Glenwood’s human resources director, John Angell, each furlough day could save the city up to $40,000.

June sales tax revenues brought in $1,284,041. Year-to-date data shows that the sales tax deficit fell only one-tenth of 1 percent in June, down 17.3 percent for the year-over-year comparison. However, June also was the third largest single-month decline for the year behind May, which saw a 21 percent decline, and March’s 19 percent decline.

Sales tax revenues go toward the city’s general fund, street tax fund, bus tax fund, capital projects fund, and acquisition and improvement fund.

Christensen said the City Council has requested Hecksel put together a plan on additional steps that could be taken, on top of employee furloughs, to cut expenditures in next year’s budget. Christensen said he hopes to have something in order within the next month.

The city’s 2010 budget is already completed by staff, as the city does a two-year budgeting cycle. However, Hecksel said he is looking to make some changes to it before approval in November.

“The 2010 budget was already put together last year, but because of the volatility in the revenues, I am now going through the budget and tweaking it a bit,” he said.

While Hecksel said some tweaks will be made in the budget, he doesn’t anticipate any “dramatic” changes to occur. However, he said that it’s hard to predict what revenues will be next month, let alone the rest of the year.

“It’s sort of difficult,” he said. “You are trying to figure out what is likely to happen next year, and it’s hard to say.”

Despite the large declines in revenues, Christensen said the city is still “financially sound.”

“But if we want to do some of the things we want to accomplish, things are going to have to turn around,” he said.

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