Saturday, July 12, 2008

Steamboat Springs City Budget Crunch - According to Rob Douglas

Rob Douglas: Something’s got to give
By Rob Douglas
Friday, July 11, 2008

Rob Douglas
Rob Douglas’ column appears Fridays in the Steamboat Today. Steamboat Springs — This week, the rejuvenated Steamboat Springs City Council heard the most refreshing words spoken in Centennial Hall since voters expressed their displeasure with the profligate spending habits of the last council by electing five new faces in November 2007.

In fact, on Tuesday evening the phrase “something’s got to give” echoed through the Citizens Meeting Room, not once but twice.

Those sobering words were occasioned by the council’s first glimpse of just how bare the city’s financial cupboard is when illuminated by the harsh light of a stagnant economy. The lagging national economy now is impacting a city hobbled by previous councils that threw dollars at wish-list projects — instead of prudently building reserves — as though Rabbit Ears Pass would inoculate us from any economic downturn.

Specifically, Tuesday saw the first public review of the Preliminary 2009 Revenue Projections and Funding Requests Report. The report anticipates 2009 revenue to decline by 4 percent with potential increased losses in 2010.

The knee-jerk reaction by many to learning of a projected decline of 4 percent will be the same as mine: “No big deal. A cut here and a cut there, and we’re home free.”

Not so fast, kemo sabe.

Hold your horses a few more moments and you’ll understand why — when the council asked city finance staff how to bridge the gap between decreased revenue and increased spending requests — city Finance Director Lisa Rolan and Deputy City Manager Wendy DuBord proclaimed “something’s got to give.”

With revenue projected to decrease 4 percent next year, city departments — as instructed by the Finance Department — requested 3 percent operating increases. Reasonable from a preliminary budgeting perspective and manageable with well-placed cuts and line item budget transfers.

However, non-city departments — community groups seeking your tax dollars to fund their organizations — requested an aggregate 31 percent increase.

Yes, you read that right. Community groups that are not directly a part of core city-run operations are seeking 31 percent more for 2009 than they received in 2008. The requested increase follows several previous years of dramatic increases.

Since 2003, community support has received the following percentage changes: 2003 (plus 3 percent), 2004 (plus 16.2 percent), 2005 (minus 4.4 percent), 2006 (plus 13.3 percent), 2007 (plus 12 percent) and 2008 (plus 1.3 percent).

Quite simply, the city is on a path where declining revenue is about to collide head-on with a growing population’s need for essential city services, compounded by outsized community support requests. And, as though that were not enough, the city’s reserves are far below where they should be, and essential capital projects including road, water and other core infrastructure maintenance are long overdue for attention vital to preserving a safe city.

Given the current financial reality, there are two courses of action the council can take.

The first is to follow in the footsteps of previous councils by patching together a budget for next year that further deflates reserve funds and allows continuing infrastructure deterioration while spending funds on utopian projects and community groups — long addicted to public funds — instead of pushing them toward self-reliance and private funding.

That path entails gambling with the financial health of the city by betting the local economy will rebound overnight. Politically, it is the easy path as it will satisfy the special interest groups parading before the council with their hands out.

The second course of action takes political courage. It requires throwing out the failed budget practices of previous councils and a return to what government was meant to be — a provider of services and infrastructure that individuals and the private sector can’t provide, coupled with aid for the truly needy. This path would immediately free funds to build appropriate reserves for future economic downturns.

The financial detritus of past councils now lies at the feet of the current council. The council must choose whether to continue the policies of the past or make their mark by returning city government to providing services only government can provide while allowing the free market to operate.

There is reason to believe there are some on this council who seek to rein in government spending, but the reality is that on Tuesday evenings they are far more likely to hear from those seeking public funds than those seeking limited government.

The squeaky wheel is the one most likely to get greased.

That’s how we got where we are today.

Rob Douglas can be reached at

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