MOUNTAIN VILLAGE – Facing precipitous drops in property tax revenues, the Town of Mountain Village is ready for yet another fiduciary wrestling match as town staff and the town council grapple with the 2012 budget.
In the midst of recent budgetary work sessions, Town Manager Kim Montgomery, Finance Director Kevin Swain and the Town Council Finance Committee have taken a hard look at the town’s bottom line, and while the picture that has emerged isn’t exactly rosy, it isn’t dire either.
In the words of Finance Committee councilmember Richard Child, “There is a silver lining.”
As he explains it, the town has met the adverse economic climate precipitated by falling property values, and is emerging as a leaner, more efficient government.
“When the community is cutting back and tightening their belts, the town should be doing the same – and hopefully more,” Child said, speaking of the town’s fiscal philosophy as it prepares to present a first reading of the 2012 budget to the public on Nov. 17.
The town began its budget process with special work sessions back in September, which is earlier than typical for Mountain Village, Montgomery said. Those sessions offered “broad brushstrokes” to what is steadily emerging, thanks to more detailed recent work sessions with all of the town’s departments, as a workable budget for the coming year.
“This may be the most financially difficult budget Mountain Village has had to work on, but the process itself has really been really seamless,” she said.
Swain reports that next year’s budget is nearly $24 million, with approximately $24.6 million in projected revenues. Mountain Village is unusual in that in addition to traditional governmental expenses like police, road and bridge, utilities, and administration, the town also subsidizes amenities like the a daycare and preschool and the Telluride Conference Center.
“For a small government, we’re actually pretty big,” Swain said.
The 2012 budget does not anticipate receiving any revenues from grants, unlike in years past.
“We’re really putting extra pressure on the town budget to make it though without grants. If they come, it will be a windfall, enabling us to address other pressing issues. But the days of budgeting expenditures with grants – taking grants for granted, no pun intended – are over,” Child said.
Mountain Village has also taken the stance that in the scenario of better-than-projected revenues, its government will continue to stick to a conservative spending model. “Regardless of the ups and downs of our property valuations, the town really looks at maximizing the value of taxpayer dollars. Just because the town has more money doesn’t mean spending will go up proportionally. The town is very diligent about managing its expenses… without injuring critical services necessary to maintaining the highest quality levels possible,” Child said.
Swain explains that this year’s budget process actually began years ago, at the height of the national financial crisis. At that point, under the direction of Mayor Bob Delves, Child, and then-councilmember Dan Garner, the town council began preparing for drastic decreases in its property tax revenues by creating a policy that aimed to set aside 35 percent of the next year’s budgeted expenses in the general fund; so that in the event of a “total bottoming-out of the economy, we’d be able to sustain [Mountain Village’s] government for at least six months before we’d have to turn the lights out,” he said.
Mountain Village has thus far nearly reached that goal, reserving close to 30 percent of 2012’s budgeted expenses in its general fund.
Swain estimates that ongoing macro-scale economic turmoil will continue to keep property values lower than pre-recession levels, thus making the exercise of trimming down Mountain Village’s 2012 budget one that will likely be repeated in the coming years.
“We’re continuing to reflect those larger scale economic trends with our budgets,” Montgomery said. “We’re trying to be more proactive, and stay ahead of the curve,” noting that there have been many years of delayed capital improvements; this year’s budget will tackle one of those looming endeavors, however, with $300,000 budgeted for road and bridge department projects.
Child adds that the town will not defer or delay any critical maintenance projects, however.
“We’re attempting to be as cost efficient on the operations side of things as possible, at the same time contingency planning for a very tough situation. If things improve, we’ll do OK. If things get tough, we will be able to manage,” Child said.
As the town’s finance department and town manager prepare to present the 2012 budget’s first iteration at the Nov. 17 public meeting, its architects express confidence that the budget reflects responsible fiscal policy in light of continuing financial turmoil.
In Swain’s words; “Nobody’s been hiding with their head in the sand… We’ve been expecting this, and the council hasn’t been bashful or afraid about demanding that staff come up with ways to get more money to follow the town’s bottom line – and we have.”
A second reading of the budget will be presented prior to the budget’s formal adoption, which is slated for Dec. 8.
This story has been corrected. Due to an editing error, an earlier version of this story incorrectly reported that the Town of Mountain Village did not budget making grants to nonprofits next year. In fact, the town is awarding grants to several nonprofits and did not budget in anticipation of receiving grants. The story also contained errors about funding for the gondola, which is not funded by the town but is funded by the Telluride Mountain Village Owners Association. Mountain Village cable and internet are not subsidized, but are self-funded.