Salida City Council addresses operating budget May 18-19
The City council meets Monday night, May 18th, for a work session to discuss the 2015 budget shortfall resulting from the outcome of the recent ballot initiative that resulted in a $525,000 operating budget deficit. The Council proposes both operating budget cuts and increases in revenue to offset the gap. On Tuesday night the Council meets to make decisions on the budget.
Options identified in City Council package on City of Salida website include slightly over one million dollars in potential operating budget cuts, however each of these options results in a negative impacts on the community services and facilities that support our high quality of life. For that reason, many of them may be highly controversial or unpopular.
One of the proposals presented by City Council was a new ordinance which would redistribute $180,000 from the original 2% sales tax that currently goes to the capital budget to the operating budget. Some Council members would prefer to include this ordinance in the November election since it was Salida voters who passed the original tax. This would make a substantial step forward in covering the shortfall.
Public Safety may also be impacted with a proposed reduction in operating costs created through the reduction in staffing resulting in fewer officers on patrol and not having a code officer.
Other proposed budget reductions could negatively impact the City’s ability to function effectively. For example, reducing City legal services seems logical, however recent litigation and frequent legal questions by Council members demand quality legal counsel. Additionally, increasing the City insurance deductibles can cost the City more than it saves. Cutting City employee benefits by $242,000 reduces our ability to keep and hire qualified staff.
Major categories of impact are community and economic development, public service and safety, parks and staff. Reducing staff costs by $45,000 will impact the Public Works Department’s ability to do basic maintenance such as maintaining street markings, fixing potholes and street-sweeping. The City Planning Department’s ability to focus on long-range planning, such as affordable housing, is enabled by paid interns handling day-to-day permitting work. It appears that affordable housing may be delayed, potentially indefinitely, despite affordable housing being identified as the number one priority on the recent community survey. Housing affordability will impact our business community’s ability to attract, create and fill jobs.
The two biggest amounts on the list of proposed operating cuts include $200k for the Salida swimming pool and $88k for the SteamPlant. Each of these sees around 20,000 visits by local residents at reduced or free rates and both facilities are important drivers of our tourism economy. These facilities generate revenue covering approximately 75% of their respective operating budgets through fees.
Some council members propose that $145,000 in costs for dispatch and 911 emergency services could be reduced, but it is not yet clear how this would work.
Negotiating new contracts with the Airport could potentially save $40,000, but cannot be done until the current agreements expire.
Not watering Salida’s parks could save $38,000, but at a grave costs to the quality of our park’s existing trees and grass. Citizen water bills would have to be increased to cover the City’s share of the water supply infrastructure. Additionally, closing park restrooms seasonally would negatively impact both locals and visitors.
Community development support for non-profits, such as Family Youth Initiatives and Boys & Girls Clubs, will result in cuts to services to some of our community’s most vulnerable populations and who need our support the most.
Council suggestions for additional revenues total $1.3 million. One of these options includes taxes on recreational marijuana of $300,000; however, since the local tax rate may be set by the state, the legality of this proposal is being investigated.
Reinstatement of City property tax could bring in $250,000 although it would impact some homeowners already struggling with a rising cost of living. On a positive note, it is likely the City will see a $162,000 positive budget adjustment resulting from expected income from sales tax from the conservative 2% growth to 5.5% growth (which is less than what is now observed).
A street light surcharge of $2.50 per residential customer was proposed, which would offset the $90,000 now paid by the City.
In summary, Council set a goal of June 1 for solving the deficit because they agree that spending Reserves is poor fiscal management and unsustainable. It appears we will all need to be incredibly thoughtful about long term implications of decisions as the Council prepares to weigh these difficult trade-offs.