Snowmass March sales tax revenues better than projected; town still in strong economic position
Although the town of Snowmass Village’s sales tax revenues took a significant hit in March due to the novel coronavirus pandemic, it was a little less severe than staff anticipated.
According to the town’s monthly taxes revenue report, the March sales tax revenues allocated for the general fund and the marketing fund dropped by 51.18% each compared with March 2019. Lodging tax revenue dropped 58.91% and real estate transfer tax revenue dropped 17.82%, according to town documents.
However, while these numbers are dismal, town staff originally projected a 60% decrease in sales tax revenues over March. And according to Town Manager Clint Kinney, Snowmass Village is still in a strong place financially to weather the continued negative impacts of the coronavirus pandemic in the months to come.
“We are in a strong financial position to move forward,” Kinney said. “But that doesn’t mean we shouldn’t be paying attention and that doesn’t mean we shouldn’t be looking at good opportunities to save money.”
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At the May 11 Town Council work session, Kinney and Marianne Rakowski, town finance director, went over the working 2020 town budget projections, mainly focusing on the town’s general fund. The general fund includes all town departments’ revenues and expenditures, except for housing, marketing, and group sales, along with all financial resources not accounted for and reported in other town funds, according to town documents.
The projections presented May 11 show two potential scenarios for the town’s 2020 budget: the first considers revenue decreases but no adjustments to town expenditures; the second considers both decreases in revenues and adjustments to expenditures (excluding personnel services and capital expenditures).
If town aligns with the first scenario, a $2.6 million loss in “funds available” — which aren’t appropriated for a specific purpose and accrue when the town spends under budget and/or sees revenues come in higher than expected — in the town’s general fund is anticipated. If town aligns with the second scenario, a $2.4 million loss is projected.
Rakowski and Kinney said the town is hoping to align with the second scenario, but emphasized that both options leave the town’s emergency reserves untouched.
They also said that while town staff is currently evaluating the expenditure adjustments it could make, these adjustments would not result in any staff layoffs, furloughs or changes to the town’s quality of services.
“Our approach so far is because of the reserves we’ve got. We’ve committed to not eliminating jobs, no furloughs, nothing along those lines. We think the value of our organization is in our employees and so we want to give them a very high level of confidence that their jobs are here,” Kinney said.
When considering all town funds, Kinney and Rakowski said a 13% decrease in revenues across the board, or $5.79 million loss, is anticipated in 2020 as of early May.
Town staff also still anticipates a 60% sales tax revenue decline in April, a 40% decline in May, June and July, and a 35% decline each month from August through December, Kinney said.
Kinney went on to explain that while 2020 will be a tough economic year for Snowmass Village, the Roaring Fork Valley and the entire country, the fact that the COVID-19 crisis is hitting hard in the summer is fortunate for the village.
“April and May is obviously our offseason no matter what; those are smaller dollars even if we’re way off on those,” Kinney said. “This is hitting us in our lower revenue seasons and we got through a pretty solid winter, so that also helps put us in the strong position we are now. If the COVID-19 shutdown had happened Nov. 15 and gone to Feb. 15, this would be a very different discussion.”
Despite Snowmass’ relatively solid position, the town finance department is constantly updating the anticipated revenue and expenditure actuals to reflect the evolving local, state and national COVID-19 crisis and its related response efforts, Kinney and Rakowski said.
The department will continue to monitor town revenue and expenditure trends on a near-daily basis, but said they do not feel any official budget amendments need to be made as of early May.
“I feel a high level of confidence that we’re in a good position,” Kinney said.
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