Snowmass Village takes an “optimistic” — but still conservative — approach to annual budget

Town council requests additional detail on capital improvement projects

Snowmass Town Hall on May 3, 2020.
Maddie Vincent/Snowmass Sun

The town of Snowmass Village’s number-crunchers have long taken a fiscally conservative approach to the municipal budget. Underestimating revenue and overestimating expenditures keeps the town’s coffers in check and ensures that there isn’t more money going out than there is going in; the town also implements financial “safety nets” like reserves and other checks and balances on spending.

That approach is no different with the 2022 budget, which was introduced to Town Council at a regular meeting Oct. 4 and which will be a topic of discussion for at least the next month in council chambers.

But this year, that conservatism also comes with an attitude that wasn’t so present when the 2021 budget was presented mid-pandemic in October 2020: optimism. The estimates on spending and revenue were calculated with the notion of “relatively normal operations” in mind thanks to a “continued concentration on vaccination,” the introductory budget letter reads.

Town Manager Clint Kinney, who presented the budget alongside Finance Director Marianne Rakowski, reiterated that positive uplook throughout the meeting.

“We’re (looking at) very strong long term financial projections right now, trying to be conservative but making sure we’re realistic in those expectations as well. … We think we’ve got a number of years that revenues will grow or exceed expenses,” Kinney said.

In light of those uncertainties back in 2021, last year’s budget made “very conservative projections” that ensured that “going forward, we think we’re in a good place to make capital investments,” Kinney said.

“I think that served us well, with resources coming from the federal government that helped a lot, other resources that were developed over time, it put us in a very strong financial position,” Kinney said.

The budget letter projected that the town will end 2021 with $1.7 million more than expected in revenue, primarily thanks to boosts in sales taxes and building revenue. And after one year of allocating one-time development and building fee revenue to ongoing expenses, the town can now move those funds back toward one-time expenses, which reinstates another financial safety net that prevents overspending.

(A similarly uber-conservative approach to the revised 2020 budget was so effective that the town exceeded even its pre-pandemic budget expectations by $13.83 million, aided in part by reduced spending and more than double the anticipated revenue from the real estate transfer tax in 2020.)

So what does optimism look like in a sea of numbers and spreadsheets? In terms of revenue, it meant the town’s finance-oriented staff took a best of three approach to estimating sales and lodging tax.

Staff looked at the highest sales tax numbers for each month in 2019, 2020,and 2021, then reduced it by 3% for the months of January through May and increased it by 3% for the months of June through December. (So if one month’s sales taxes were higher in 2019 than they were in 2020 or 2021, for instance, staff would use that 2019 number as the baseline for that month; if they were higher in 2020, staff would use the 2020 number as a baseline.)

On lodging taxes, staff used January 2019 numbers minus 10% for the January 2022 projections, then again applied the best of three approach for the rest of the year, with a 3% reduction for the February through May 2022 projections and a 3% increase for the June through December 2022 estimates.

“We didn’t want to be ridiculously low, and we obviously don’t want to be overly optimistic, so we did a little bit of art, a little bit of science, a little bit of math” to land on those numbers, Kinney said. The 3% adjustments were deemed a “reasonable number” to hedge the 2022 estimates, he added.

The town expects about $48 million in revenue this year, including $11 million in grant funding for the transit center at the Snowmass Mall; on the spending side, Snowmass Village is looking at $63 million in expenditures.

While that may look like a net-negative approach to spending compared to next year’s budgeted revenue, it won’t actually put the town in the red; more than half of that spending ($32 million) is for capital projects, purchases and repairs that will be covered by reserves, funds carried forward into the new year and other monies already set aside specifically for those purposes.

Town Council members agreed with the optimistic outlook at the coming year and how that was factored into revenue estimates.

But on the expenditure side, members said they would like a lot more information about some of the capital improvements that have been budgeted for 2022, like an expansion of the town’s fiber broadband network, the first few phases of the Town Park entryway project and designs for not-yet-approved changes to the Owl Creek Road and Brush Creek Road intersection.

Those details will come in the next several weeks; ongoing budget review is on the draft agenda for several upcoming meetings, including a work session coming up Monday.