STEAMBOAT SPRINGS — As effects of COVID-19 first began to impact the community in March, Steamboat Springs City Council anticipated a heavy hit to the city’s general fund, which relies on sales tax revenue.

Several months of the pandemic took a toll on Steamboat and its sales tax revenue, prompting the city to decrease its budget by $2.5 million — about a 6% decrease to all departments. But sales tax collections began to pick back up in the summer months, disproving the council’s original estimates for its revised 2020 and 2021 budgets.

While council originally predicted about a 20% decrease in revenue, it was only about 12%, according to Kim Weber, city finance director.

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“We wanted to take a conservative approach because we are so sales tax dependent,” Weber said. “We anticipated going into reserves, but we wanted to make some quick changes to account for what we might lose in sales tax.”

Seven months into the pandemic, council is discussing its 2021 budget with city entities decreasing their budgets by about 5% to 10%. While city employees took about a 10% reduction in hours and pay in March, cuts to the 2021 budget will instead come from training, traveling and operational equipment.

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If council approves this version of the budget, city employees would return to their normal pay and hours Nov. 8.

“I’m thankful that we’re in a situation where we can return our employees to 40 hours,” Weber said.

While departments did receive cuts earlier in the year, Steamboat City Manager Gary Suiter said impacts of budget reductions were not noticeable to the public.

“The impacts to the community haven’t been felt in a major way,” he said. “Staff has stepped up to maintain high levels of services consistent with the expectations of the community.”

While council members recognized summer brought more business than they anticipated, Suiter said the jury is still out on how much the winter season will bring in, particularly because of Steamboat Ski & Resort Corp.’s changes to resort usage due to COVID-19.

“This is the first time I’ve heard locals hoping for winter,” Suiter said.

In a virtual budget retreat meeting Tuesday, Weber described three scenarios for how the winter season could look in Steamboat.

The best case scenario predicted lodging occupancy down about 30% to 50% from where it was in 2019, with snow sports at about 60% to 70% of where they were in 2019. Outcomes of this scenario include slight service level reductions, reduced or delayed capital projects and a moderate tap into the city’s savings.

Scenario two, described as “cloudy,” involves unfavorable weather, businesses closing and lodging occupancy down 60% to 70% from 2019. If the winter season follows this projection, Weber anticipates more furloughs for city employees and deeper service cuts that will be more noticeable to the community.

The final scenario, described as “stormy,” includes closure of the ski mountain, sales tax revenue down 40% from 2019 and closed businesses. In this scenario, the city would conduct furloughs and layoffs and essential services would be severely impacted.

The council will meet twice more by video conference before voting on the proposed budget.

To reach Alison Berg, call 970-871-4229 or email aberg@SteamboatPilot.com.

To reach Alison Berg, call 970-871-4229 or email aberg@SteamboatPilot.com.