Better than expected: Routt County’s budget ahead of COVID projections
STEAMBOAT SPRINGS — Despite COVID-19 dealing widespread economic blows, Routt County’s budget is looking better than local experts predicted at the start of the pandemic.
Back in April, when the county was under a statewide stay-at-home order that tanked the economy, Finance Director Dan Strnad projected revenue shortfalls of about $3.96 million, according to a presentation he gave to the Routt County Board of Commissioners on Monday. His most recent assessment shows the shortfall to be much lower, about $660,000.
With grants from the CARES Act and a loan payoff from the Yampa Valley Regional Airport, the county’s revenues actually increased $971,190 more than originally budgeted for 2020 before the pandemic.
“That is quite amazing,” Strnad said of the numbers.
Expenses also are faring relatively well, he said, due mostly to about $1.6 million worth of personnel and operating cuts the county implemented in April. These expenses do not take into account pandemic-related costs since April 17, Strnad explained, which now fall under a separate budget. The county will receive special reimbursement for those costs associated with COVID-19.
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Breaking down the revenues and expenses, the finance director said it’s a tale of “the good, the not so good and uncertainty at the best.” Some sources of revenue have rebounded since April, while others continue to struggle.
Sales tax revenues are up about 3% over what was budgeted, which Commissioner Tim Corrigan, in previous interviews, has attributed largely to income from newer regulations that allow the county to collect tax on online sales. Better-than-expected summer tourism also played a role, Strnad said.
Future sales tax revenues largely will depend on the extent of winter activity, Strnad said. Uncertainty still clouds the state of operations at Steamboat Resort and other services that bring business to the area during the snowy months.
Commissioner Beth Melton said the unpredictability over the ski season has had a major impact on local lodging companies that are trying to improve consumer confidence.
“They have had to basically throw out their cancellation policies,” Melton said. “I imagine the same will be true of the ski area as well.”
Alterra Mountain Co., which owns Steamboat Resort, implemented a deferral option to its Ikon Pass that acts as a form of insurance for pass holders. The company calls it Adventure Assurance, and it allows skiers and riders who purchase a pass for the 2020-21 winter season to defer the pass until the next season “for any reason, with no fee.” Skiers and riders have until Dec. 10 to defer.
Looking at the state of other revenue streams, property tax revenues should remain down about 3%, or $506,000, according to Strnad. A hot real estate market has increased real estate fees, a source of income for the county. The clerk’s office, which handles those fees, has revenues 14% above the 2020 budget.
“People are wanting to live here. People are buying property here,” Strnad said.
On the downside, the county has seen the biggest blow to its highway user tax fund, the state’s largest source of transportation funding that people pay at the gas pump. Strnad expects a 21% reduction in the tax for Routt County, a decrease of about $721,000 to the general fund.
A major contributor to the reduction is a decline in commercial freight, Strnad explained, something experts have been noticing for years. He also listed people’s wariness of traveling amid a pandemic as another factor.
Strnad also predicts a 17% decline in severance tax revenue, or a $102,000 budget shortfall.
All of this makes for quite an economic rollercoaster, he said, emphasizing that these numbers are predictions. Only time will tell how deeply the pandemic affects the local economy.
“We still have a whole lot of uncertainty coming at us in the future,” Strnad said. “We will just have to see how it turns out.”
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User Legend: Moderator Trusted User
Routt County’s COVID-19 incidence rate is increasing exponentially and is now among the top three in Colorado behind only Moffat and Kit Carson counties.