Our View: Council losing credibility
At a City Council meeting in June, Councilman Towny Anderson warned his colleagues to be careful in their decision making or risk public perception that “we’re spending money like drunken sailors.”
Anderson’s comment is proving prophetic, given the council’s decision to spend $500,000 more on a new community center. That brings the total for the center, which was going to cost $1.7 million as recently as June 6, to nearly $3 million. This, for what boils down to a big room with a kitchen that nearly half the council members have reservations about.
The decision raises serious questions about how the city plans, budgets and pays for capital projects, and undermines what little credibility the city had in terms of telling the public how much such projects are going to cost.
A quick review of the community center decision:
– On June 6, a reluctant council voted 5-2 to build a $1.7 million, 5,250-square-foot community center at the Stock Bridge Multi-Modal Transit Center. The vote came despite many council members’ reservations about the site.
– On June 26 – when Anderson made the drunken sailor remark – the council changed its mind, settling on a $2.5 million, 7,300-square-foot building.
– On Sept. 19, the council approved spending an additional $477,000 for winterization, heating systems for the facility’s sidewalks and patio, a geothermal heating and cooling system and other materials used to meet environmental efficiency standards. (Why weren’t these costs in the original estimates?)
In essence, the community center’s price tag has nearly doubled in four months. This comes after the city had a 50-percent cost overrun on its last major capital project – the Tennis Center at Steamboat Springs. Thus, it seems reasonable to ask, “Why would anyone trust the city’s cost estimates on these projects?”
The city does not have a capital budget to speak of – funds are not specifically set aside to account for depreciation and prepare for replacement of existing equipment and major repairs on buildings. Rather, the city sets aside funds for long-term projects and applies excess funds to projects like the community center.
That system has worked well for the city for the past three years. Sales tax revenues rose 7 percent in 2004, 8 percent in 2005 and are up 12.5 percent through the first half of 2006. That has allowed the city to get away with doing a lousy job of planning these projects. The city can afford to write big checks to cover the mistakes without worrying that it will hurt the city’s bottom line.
Still, it’s no way to do business.
Council members would be wise to hearken back to those long-ago days of 2002 and 2003, when sales tax revenues failed to match the city’s 3-percent projections. Tax receipts declined in 2002 and were up less than 1 percent in 2003. The city was in such dire straits that it twice begged voters for a property tax that essentially was to pay for capital projects. The voters wisely rejected both proposals.
What happens when – notice we said “when,” not “if” – the economy goes south again? What happens when sales tax revenues don’t meet expectations? What happens when the City Council doesn’t have the money to double the cost of a capital project that is a necessity, not an amenity?
There’s a sobering thought for the current sailors on the council.
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After 11 years, Moxie Home Consign and Design owner Michelle Caragol has decided it’s time to close the doors on her west Steamboat Springs business.