EDITORIAL: Considering the Pagosa Springs Town Budget, Part Two
Tonight’s the night; it’s gonna be alright
‘Cause I love you, girl; ain’t nobody gonna stop us now…
— Rod Stewart, ‘Tonight’s the Night’
Tonight’s the big night for the Pagosa Springs Town Council, when all their training and intelligence comes to bear on the 2018 Town Budget — the approval of which will define the Town’s operations for the coming 12 month.
The Town Council also serves as the Board of Directors for the Pagosa Springs Sanitation General Improvement District (PSSGID) — a semi-independent sewer treatment district that no longer treats sewage — and the budget for that district is also scheduled for possible approval tonight.
(I’m planning to post a personal photo essay about one particular PSSGID project this morning…)
My focus this morning, however, is the Town’s budget, rather than the sewer district’s budget.
I had stated yesterday in Part One that the 2018 budget was written by our new Town Manager, Andrea Phillips, but that statement was probably inaccurate. In fact, a hefty portion of the annual budget creation falls to our Town Clerk, April Hessman, who serves as the Town’s chief financial officer. Ms. Hessman has been serving in that position for (I believe) somewhat longer than a decade, and — considering the fact that Andrea Phillips is now the fourth Town Manager to take the helm at Town Hall during that decade — we should probably credit Ms. Hessman with being the primary holder of the Town’s “institutional history.”
And since we’re on the subject of Town history… a few interesting facts.
From the Town budget narrative, discussing the “General Fund” — the fund that covers most, but not all, of the Town’s day-to-day operations:
As indicated above, the main sources of revenue for the General Fund is sales tax. The sales tax rate in Archuleta County is 6.9%, and of that 6.9%, 2.9% is allocated to the State of Colorado and the remaining 4% of sales tax proceeds is split equally between the Town and Archuleta County. Of the 2% that goes to the Town, the revenues are evenly divided between the General Fund and the Capital Improvement Fund.
The total projected revenue in the General Fund in 2018 is estimated to be $3.28 million, not including the carryover cash from the prior year. Of that amount, 77% or $2.52 million is anticipated to come from sales tax. For 2018, sales tax is projected to increase 2% above the year-end estimate for 2017.
The Town collects relatively little revenue in the form of property tax: only about $85,600. Other forms of revenue include state and federal grants, fees, and of course, traffic tickets.
As we witnessed during the Great Recession, (and as we discussed yesterday) tax revenues can be volatile. Here in Archuleta County, we saw declines in both property tax collections and sales tax collections during the Recession (which I’m defining as between 2008 and 2014). Property tax revenues dropped because the sales prices of homes and land — and thus, the legal valuations of all real estate — dropped by about 35 percent. The overall valuation of Archuleta County property dropped from a high of $424 million to $289 million.
Much of that drop can likely be attributed to foreclosure “fire sales” made by banks, rather than to typical real estate transactions. But private homeowners also dropped the sales prices of their homes.
Sales tax also declined during the same period, but not by so drastic an amount. For example, the Town’s sales tax collection in 2006 was about $3.3 million. By 2009 it had fallen 8 percent, to about $3.0 million.
What, then, have been the overall trends with spending habits of the Town of Pagosa Springs during this roller coaster ride? The following is a very brief (and incomplete) analysis.
I picked 2006 as the peak of the Archuleta County economy just before the Great Recession, and then picked 2010 as the bottom of the Recession. I also compared the 2006 budget items to what they would be if the Town budget had merely kept pace with inflation between 2006 and 2017.
As you will notice, while the community was riding the Great Recession roller coaster, some Town departments were riding a financial ski lift to the top of the mountain, with their expenditures more than double what they would have been if the Town had simply budgeted for inflation.
2006 (in 2017 dollars): $196,784
2006 (in 2017 dollars): $261,922
Parks & Recreation
2006 (in 2017 dollars): $353,603
Building & Planning
2006 (in 2017 dollars): $240,421
2006 (in 2017 dollars): $399,116
2006 (in 2017 dollars): $672,209
2006 (in 2017 dollars): $137,994
2006 (in 2017 dollars): $350,901
How many businesses in Pagosa Springs have expenditures double what they were in 2006 — after accounting for inflation? I cannot say. We will only conclude that, even in a roller coaster economy, our Town government has come out ahead.
The rest of today’s editorial is quoted from the Town’s 2018 budget narrative.
In 2018, the Town will employ 43 full time employees, three part time employees and approximately 32 seasonal employees. For 2018, there are three planned staffing adjustments:
1. Reclassify the position of Human Resources/Records Clerk to Human Resources/Records Administrator. The type of duties performed by the individual in this position has changed over time and are now beyond the scope of a clerk position. In 2018, the title will be amended and the pay grade will be adjusted accordingly to grade 18. The increased cost in 2018 for this adjustment is estimated to be $4,920.
2. Adjust the pay grade and the status of the Court Administrator/Probation Officer. Based upon on an analysis of the pay schedule and the duties required for both functions, the pay grade will be adjusted from 20 to 22 and the status of the position will be amended from non-exempt to exempt. The increased cost in 2018 for this adjustment is $3,967.
3. In the Lodger’s Tax Fund, a new position of a Content Marketing Manager is budgeted at a salary of $42,000. The Tourism Director requested this position to assist with social media, video and outreach.
The budget for 2018 assumes a pay adjustment based on the consumer price index (a measure of inflation) of 2.772% for all employees beginning January 1st. Employees may be eligible for a merit increase based on their annual evaluation of 0 to 3%. For budgeting purposes, an assumption of a 2% average merit increase has been included.
To assist with police officer recruiting, $5,000 has been included in the Police Department’s budget to provide one-time hiring bonuses at the discretion of the Police Chief.
Approximately $12,500 is budgeted for an update to the 2012 compensation survey. This study is needed to determine what, if any, adjustments should be made to the Town’s compensation structure. Human Resources staff will work closely with departments to review organizational needs and position descriptions.
If you want, you can attend the 5pm Council meeting at 5pm in Town Hall, to hear the 2018 Budget get its approval.