With no strong sense of confidence that real estate transfer assessments will quickly rebound, the board of the Telluride Mountain Village Owners Association on Wednesday discussed the need to make sharp cuts in its budget.
As each board member in turn addressed the question of his priorities, a consensus emerged recognizing the legal requirement to continue to pay for the operations of the Telluride-Mountain Village gondola at a cost of more than $3 million a year, through 2027, though possibly at reduced levels. An agreement to run the gondola at a minimal level, at no cost to passengers, was a condition of approval for Mountain Village, when San Miguel County first approved it.
Along with running the gondola, debt service on gondola construction bonds can’t be shirked. And the gondola requires annual maintenance, too. Total unavoidable gondola expenses add up to just over $4 million a year.
On the other side of the discussion, the first large TMVOA expense likely to be cut is funding for events like the Sunset Concert Series, this coming weekend’s Festival of the Arts and Gay Ski Week, members of the board agreed, especially absent a clear case that they generate a measurable return on investment.
Some board members expressed more support and some voiced less support for economic development activities, but all agreed that the TMVOA won’t be able to afford all of the activity it has previously undertaken in that area. Cuts will have to be made somewhere.
Telluride Ski and Golf Co. CEO Dave Riley, who is a member of the TMVOA board, made the argument that the community must take the opportunity to rethink how its economy functions, specifically to lessen its dependence on real estate transfer assessments, which he likened to an addiction to crack cocaine. He argued further that cuts should commence immediately, and not be deferred to next year’s budget.
TMVOA CEO Erin Neer earlier in Wednesday’s meeting presented financial reports showing that the TMVOA is just over $1 million behind its budget at midyear, primarily due to a collapse in RETA. Without new revenues or budget cuts or a combination of both, Neer made it clear that the TMVOA will burn through its cash reserves quickly.
Even at just 32 percent of what it has produced on average over the last nine years, RETA still generates over 50 percent of TMVOA’s revenues, Neer said. Meanwhile, other sources of revenue – investment revenue, membership dues and rents – are also under stress, with a growing number of property owners in arrears on their dues and both rental and investment revenue falling.
Penelope Gleason, a former TMVOA president and co-owner of Bootdoctors, made a plea for continued funding of events, arguing that they are a lifeline to struggling businesses, which might well fail without them, which would leave the community in even worse shape. While Riley said “this is not an appropriate time to do a special assessment or increase dues on our community,” resident Don Orr said that a one-time special assessment ought not to be ruled out – after all possible cuts are imposed.
Several residents suggested a couple of possible new revenue streams: a donations box at gondola stations, inviting riders to voluntarily contribute, and advertisements in gondola cabins were both suggested.
The board took no action to cut spending. Instead, the discussion will continue, TMVOA president Nelson Sharp concluded. “We need community input,” he said.
A Safer, Greener Gondola
Even faced with economic distress, the Telluride Mountain Village Board of Directors on Wednesday approved a budgeted $20,000 installation of a video surveillance system on the gondola system. But in a sign of the financial times, the TMVOA board cut back a staff budget request for a replacement snowmobile from $9,000 to $7,600.
The system operates a fleet of three snowmobiles, which are used for opening and closing and to address emergencies. The gondola is owned by the TMVOA and is operated under an agreement by the Town of Mountain Village.
The TMVOA board also gave its blessing to “further investigation” of a proposal from The New Community Coalition to solicit donors to pay for solar panels, to be located on the roofs of public buildings, to offset electricity usage by the gondola.
The near-term goal is to offset 20 percent of the gondola’s electricity consumption, at an estimated cost of $1.5-$2.2 million in panels. It would take between $7.5-$11.2 million in panels to cover 100 percent of the gondola’s power needs.
The so-called Green Gondola initiative is being proposed by Ben Williams of Getting Climate Change Handled, LLC.
The proposal will go to the Mountain Village Town Council for its consideration at its meeting on Aug. 20.