The impact of the recession continues to linger in Mountain Village and this fact is reflected in the town’s 2011 budget. Essentially the town has a three-legged stool to finance services: property taxes, sales taxes and development-related taxes and fees such as building permits and construction use taxes. Traditionally, property taxes are a stable source of income, but municipalities nationwide have experienced a decreasing property tax base due to lower home values. To date, the town has not felt this impact, although it has built in a level of property taxes reserves in anticipation of declining real estate values. As for sales tax, Mountain Village collected less in 2009 than in previous years, but experienced a rebound in 2010, which the town believes will remain stable in 2011. The slow pace of construction, both for single-family homes and commercial development, reminds the town continuously of its high reliance on development-related revenues. This declined income amount is the most dramatic of the three. In the past 10 years, projects such as Capella Telluride, lumière hotel, condos and large homes have added more than $200 million in assessed valuation. For 2010, building permits will total approximately $25 million in valuation and a modest $21 million is projected for 2011. With the three forms of town revenue combined – property taxes, sales taxes and development taxes and fees – the town has reduced funding for town services and expenditures, accordingly.
To help make appropriate financial adjustments, for the past three years the Mountain Village Town Council and management team have significantly amended the town’s budget process. They have set departmental goals, objectives and priorities using departmental performance measures. And the town has joined the Colorado Performance Measurement Consortium and the International Association of City/County Management Association Center for Performance Measurement in order to improve the way each department prioritizes, manages and measures its goals and objectives. In addition, the management team continuously measures the effectiveness of town services and raises the standards for those services without increasing spending. In fact, most departments have seen significant reductions in their operating and capital budgets. The process of increasing the quality of services with declining financial resources has been a significant challenge. But despite this challenge, the town’s 2010 Community Survey results demonstrate the public’s satisfaction with traditional municipal services such as law enforcement and street maintenance to definitely less traditional services such as the gondola and Dial-A-Ride.
Other ways the town has made strides to improve its budget sustainability is by focusing on priorities rather than simply raising taxes and fees. In late 2009, the town signed a contract with Alchemy Hospitality Group to operate the Telluride Conference Center. This resulted in a first-year savings of approximately $150,000 and a projected second-year savings of over $200,000. Also, the town seriously researched the option to contract with a third party to run its Dial-A-Ride program. After further study, it didn’t make financial sense to do so, but the town will continue to keep its options open for this program and others where there may be a cost-savings for its taxpayers. One topic the town has discussed exhaustively, and made the decision to move forward with this year is paid parking in the Gondola Parking Garage (GPG). This decision will yield significant revenues for late 2010 and 2011. Working with real numbers, it costs Mountain Village taxpayers, in bond payments for facilities, $800,000 a year in addition to the operation, maintenance, and repair of the facilities annually. The town now charges motorists $5 a day to park in the GPG (rates will be evaluated during and at the end of the ski season) and provides free options for its residents who already pay for the facilities through taxes. The desired goal is that user-fees will eventually move parking to self-sufficiency.
Another significant move the town made to ensure its budget remains balanced was to enact a general employee wage freeze. This next budget year, 2011, marks the second year for the wage freeze. With that, the town has been able to avoid furloughs, which have been common in many municipal governments, and has eliminated positions and reorganized departments resulting in an 18 percent reduction of the full-time workforce since late 2007.
In closing, the Town of Mountain Village is well aware of the financial realities that have impacted the way it does business. The town has responded to those changing realities in a proactive manner for the past three years and will continue to do so. Lastly, I would like to personally thank the voters of Mountain Village, San Miguel County, and those throughout the state who overwhelmingly rejected Amendments 60 and 61 and Proposition 101. Those measures, taken in entirety, would have crippled state government and greatly impacted the level of services Mountain Village provides. Because of your vote, the Town of Mountain Village will continue to forge ahead under these hard economic times, and do its best to serve the needs of its taxpayers, residents, business owners and visitors.