Steamboat Springs’ stretched capital improvements budget may not include funding for a delayed housing project designed for city and UCHealth Yampa Valley Medical Center employees.

Approved by City Council in 2022, the More Ranch Community Housing project would be constructed in a partnership with UCHealth and provide 21 housing units on land near the UCHealth Yampa Valley Medical Center and the Steamboat Springs Transit Building.

Deputy City Manager Tom Lesson said last week the city has lined up a contractor to perform the work after an initial bidding process fell flat.

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The $6.5 million cost to the city to construct the housing project would be paid with the help of a $1 million grant secured through the state and the Affordable Housing Development Incentives program, but City Council President Robin Crossan noted the grant could only be used if the city decides to fund the work in the next fiscal year.

In a presentation to City Council last week, City Finance Director Kim Weber laid out a list of 156 capital improvement projects ranked with the highest scores given to projects based on the city’s legal and contractual obligations and health and safety metrics, followed by projects concerning the maintenance and protection of city assets, equitable access and alignment with the city’s strategic goals.

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Although the More Ranch project ranked third among the potential projects, Weber’s presentation relegated it to the “unfunded” column because its projected cost would cause the city’s unrestricted fund balance to dip below a $1 million minimum that the city maintains each year.

Without funding the housing project next year, the unrestricted fund balance is projected to be $3.8 million.

“In order to make the capital fund balance, we unfunded the More Ranch Housing,” Weber said, adding that the process of balancing the city’s capital improvement project requires “tough decisions” and “trade-offs.”

High-ranking projects that are funded for 2024 include a transit bus refurbishment, the purchase of a replacement bus and phase two of the West Steamboat Trail Construction.

Each year, the city directs roughly $6 million in revenues from building use and excise taxes to cover capital improvement projects with additional money added for projects from the city’s general fund.

In order to fund More Ranch in next year’s budget, Weber pitched a solution whereby, along with reductions to other project’s costs, funding for improvements at Bear River Park could be reduced and “back filled” with 2024 accommodation tax revenues.

Eliminating the project’s cost from the budget would allow $2.8 million in “unfunded” projects to move forward in 2024, Weber added.

Crossan pointed out that the project, which would generate income for the city, could be financed with taxable bonds repaid with revenue collected from the housing units. She also noted the potential to receive funding from the Yampa Valley Community Foundation.

“There is some positivity around this conversation,” she said.

Council members agreed to revisit the More Ranch housing project in the coming months as they work through next year’s budget.

“Given that housing is a priority issue for council, I would really like to see us try to figure out how to make the More Ranch housing work,” Council member Gail Garey said.