Snow Removal, More Transit Cuts Predicted

TELLURIDE — The town’s 2010 budget won’t look much different than it did in 2009, Town Manger Frank Bell told the Telluride Council on Tuesday during the first in a series of budget work sessions it will hold over the coming weeks as it grapples with the reality of the new, leaner economy.

“You’re essentially going to see your 2009 budget with the dates changed to reflect 2010,” said Bell.

“We’re not projecting any increase or decrease in revenues even though we’re beginning to see some recovery,” he continued, alluding to a possible stabilization in the town’s sales tax revenue over the past three months.

If Telluride’s budget were a physical body then the town’s Capital Fund would be its heart, responsible to pump money into vital organs. In this case those organs are other funds including Debt Service, Transportation, Open Space, the Municipal Building Fund, and the General Fund that “keeps the lights on and the employees paid.”

Additionally, it pays for major capital improvement projects.

But to do so, it must first collect revenue that is generated by sales and use tax, to a lesser degree, grants, and most of all from the 3 percent Real Estate Transfer Tax added to every property sale within town boundaries.

As long as real estate is selling, the Capital Fund thrives. But RETT, which provided the town with about $3 million in revenue against a projected $4.7 million in 2008, will be lucky to generate $1 million against a much-revised estimate of $1.5 million for 2009.

“The Capital Fund is suffering and it’s having a very difficult time making all these transfers,” Bell said.

As a result the town will have little money for capital improvement projects in 2010, getting by with basic maintenance and services.

“The budget will be very short,” he said.

In the wake of eliminating the equivalent of eight full-time staff positions in 2009, Bell told council that at this time he does not anticipate a need to make further town staff cuts in 2010; neither are furloughs nor facilities closures currently being considered.

“Those triggers are always on our option list,” he said.

In the meantime the decision to replace staff that leave by attrition will be closely considered.

The public can also anticipate slower than typical snow removal this winter since the town eliminated one equipment operator from the Public Works staff last year.

“It’s one of the pains that we have to go through with the service cuts the economy demanded,” Bell said.

Council reviewed several funds, notably the Debt Service Fund which pays most of the town’s annual debt excluding the Valley Floor bonds that are paid from the Open Space Fund.

Bell anticipated $1.15 million in debt payments in 2010 (excluding the Valley Floor bonds) that the town has no option but to pay, lest its credit rating be downgraded.

“They are what they are,” he said.

Bell said he would recommend a $50,000 transfer from the Capital Fund into the Municipal Building Fund, that although originally set up to raise money for a new Town Hall, has never achieved that goal.

It is instead used to do significant repairs on municipal buildings.

The Conservation Trust Fund was essentially set up as a mechanism to accept about $23,000 in annual revenue from state lottery proceeds that is earmarked for parks and may not be used for any other purposes.

The town’s enterprise funds are self-sustaining and the revenue they generate cannot be used for other purposes.

The Water Fund is expected to earn $2 million in revenue in 2010 (rates are not anticipated to increase) with expenses of $12 million.

The $10 million difference is in bonds that were approved by the voters to build the Pandora water treatment plant but have not yet been sold.

While the town has done limited pre-construction work, “We would like to get it going in 2010,” Bell said.

“It’s a big project, it’s a complicated project and it will cost more than $10 million,” he said, adding that he believes the town will be able to manage any costs beyond that.

“At long last we’re beginning to se the sunrise over the Pandora treatment plant,” he said.

The Sewer Fund operates the town’s wastewater treatment plant, which is expected to earn $1.3 million in revenue in 2010.

Expenditures are anticipated at $2 million, but include $600,000 to construct a 106-kilowatt solar array on the site.

Although the revenue that could be generated by the project is unknown, “We have plugged it into the budget because we want it to be there and we want people to know that we’re trying to get some things done with alternative energy,” said Bell.

The Shandoka Fund is expected to earn $1.6 million in revenues in 2010 and faces $1.7 million in expenditures as a result of necessary building maintenance including roof work and painting.

Bell said that after years of wait lists the affordable apartment complex has vacancies for the first time.

“Obviously if we have a high vacancy rate then that jeopardizes our revenue projections,” he said, recommending that the fund be closely monitored in 2010.

“It’s not a huge concern yet, but it’s just different than in the past when we had people fighting over units.”

The town’s operational expenses for the Galloping Goose are largely funded through a Capital Fund transfer into the Transportation Fund.

Although service cuts have already been implemented this year, San Miguel County, which helps fund the transit service, is contemplating reducing its contribution, Bell said.

“There’s not a lot of room to reduce operational expenses without reducing service,” he explained. “ You will probably see some additional service cuts in 2010.”

In the event that the town collects some unanticipated revenues, Bell recommended that it use those monies to recharge reserve funds it has dipped into as a result of this year’s revenue shortfalls.