Taking its toll: County, city prepare for budget cuts due to coronavirus pandemic | SteamboatToday.com

Taking its toll: County, city prepare for budget cuts due to coronavirus pandemic

As officials project the coronavirus pandemic to take a major toll on public budgets, Steamboat Springs and Routt County are preparing to make cuts, predominately in operations and payroll.
Scott Franz

STEAMBOAT SPRINGS — Both the city of Steamboat Springs and Routt County are preparing for budget cuts following projections of major revenue shortfalls as a result of the COVID-19 pandemic.

Early calculations show the city’s general fund losing between $3.5 million to $4.5 million due to the novel coronavirus and subsequent lost sale tax revenue, City Manager Gary Suiter said in a report during a Steamboat Springs City Council meeting Tuesday.

Local officials are working to secure reimbursement from the $2 trillion federal stimulus package for certain expenses related to emergency response efforts, but those funds will not cover lost revenue, according to Suiter.

“That’s what everyone was hoping (would be reimbursed), but that’s not going to happen,” he said.

To account for the budget shortfalls, the city has identified about $1.5 million in operating cuts and a further $900,000 in payroll reductions, according to Suiter. That means a 10% pay decrease for salaried city employees, and hourly employees will go from working 40 hours per week to 36 hours per week.

All city offices will be closed on Fridays to account for the reduction in hours. These changes are scheduled to take effect April 12, Suiter said.

City staff recommended using unappropriated reserve funds, approximately $1.6 million, to cover the rest of the shortfall. If needed, the city also could consider cuts to this year’s capital projects budget. 

Suiter emphasized these changes are temporary, but his experience with past recessions has shown that taking proactive measures can help communities weather such crises. 

He added that the goals of these cuts are to retain as many staff members as possible, to maintain city services at the highest possible level and to avoid further layoffs or reductions in service. 

“That’s a big question mark because no one knows what will happen next,” Suiter said.

To help local businesses, the city has extended the filing deadline for February sales tax an extra month, from March 20 to April 20. Despite the extension, Finance Director Kim Weber urged businesses to report sales tax numbers as soon as possible so the city can have better projections of its budget going forward. 

Routt County is projecting similar budget decreases, Finance Director Dan Strnad told the Board of Routt County Commissioners during a special work session Wednesday. He estimates the shortfall to be about $3.8 million this year, with decreases in property and sales taxes driving the deficit. 

Strnad emphasized that number is a rough projection and is subject to change in the coming months as the pandemic either worsens or dissipates.

“We don’t really know how this virus is going to act this month, let alone what happens in the summer,” he said. “Right now, it’s early.”

On Friday, Strnad is scheduled to give another presentation on budget savings, which will look at potential cuts to capital projects, operations and payroll.  

Boosting the county’s budget is an improvement in the property tax collection system, Strnad said. The Routt County Treasurer’s Office has collected 42% of property taxes for the year, which he said are some of the best rates he has seen this early on. He attributed the improvement to better technology within the office.

Commissioner Doug Monger voiced concern about the long-term economic impacts of the crisis. 

“I’m usually the optimist,” he said, “but this thing has me financially scared to death.”

He expects a full economic recovery to take three to four years, with uncertainties about just how large the total impact will be when the dust settles. 

For the short term, newly appointed Interim County Manager Mark Collins said the county should be conservative in its spending and hold off on any unnecessary expenditures, such as vehicle repairs.

“The quicker we can get in that (conservative spending) mode, the better we are going to be,” Collins said.

To reach Derek Maiolo, call 970-871-4247, email dmaiolo@SteamboatPilot.com or follow him on Twitter @derek_maiolo.

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