City staff say an anticipated 2% increase in sales tax revenues means Council members are facing “hard decisions” as they work to approve next year’s budget.
The theme of Steamboat Springs’ 2025 budget is “Navigating the Seas,” a phrase that city officials chose as they anticipate a meager 2% increase in sales tax revenues in the next year. Staff warned council during its budget retreat on Tuesday that they had some “hard decisions” to make.
In his introduction to the discussion, City Manager Gary Suiter said Steamboat has been able to invest in capital projects and city personnel due to higher than expected sales tax revenues after the pandemic.
“That period of unexpected growth has ended,” Suiter said. “Although revenue is expected to increase slightly, it is not keeping pace with the rising costs needed to provide our current service levels.”
City staff delivered a 2025 draft budget with a roughly $150,000 surplus on Tuesday, a number that quickly dwindled as council deliberated through the afternoon. Council eventually agreed to allocate a portion of this to avoid reducing transit service levels.
The budget adds the equivalent of two and a half employees to the city’s ranks, which stands at about 360 total full-time equivalent positions. This is an increase of less than 1% over the current staffing, after the number of city staff has grown by 6% in each of the last three years.
But the balancing act over next year’s budget often strayed into talk of sustainable funding for the future, a conversation that has surfaced several times this year. Council members have discussed ideas like pitching a property tax to support parks and recreation, or consolidating the city’s portion of Steamboat Springs Fire Rescue with the broader fire district, a move that saves general fund revenues by funding fire services with new tax revenue.
Suggestions of ballot measures continued on Tuesday, being brought up right at the start of the day by City Manager Gary Suiter.
“I’d strongly recommend that the council continue to investigate diversifying the city’s revenue sources,” Suiter said, mentioning capital purchases the city is considering and the prospects of funding these long term. “Ask the electorate to fund these purchases and their continued operations with dedicated taxes or funding mechanisms to be considered as ballot issues in the November 2025 election.”
Steamboat Springs voters are likely to see multiple requests for new tax revenue in 2025. In addition to a question to support services in Steamboat Springs, voters could be asked to approve for funding for a Regional Transportation Authority.
The concept of creating new revenues continued throughout Tuesday’s Budget talks and Council discussed spending $75,000 on a study to poll the community about potential new revenue sources. Council members Dakotah McGinlay and Bryan Swintek had an exchanged related to transit funding, with Swintek suggesting they could better fund that service with new voter approved funding. (Steamboat Springs Transit gets roughly 12 cents of every dollar in the general fund.)
During a discussion about providing support for The Veterans Center, Swintek said the city could better support efforts like this if they pitched a ballot measure to voters to create dedicated funding.
“How many ballot initiatives to you want Bryan?” McGinlay asked.
“I would love to see at least one,” Swintek responded.
City’s allocation to Steamboat Chamber to increase by $50k, including small marketing push
Caption: This graph depicts city of Steamboat Springs funding for the Steamboat Chamber, with the allocation for 2025 representing the $700,000 in funding requested. (Steamboat Chamber/Courtesy)
One lever that could be pulled to theoretically alleviate the budget crunch would be to increase sales taxes. Put another way, solicit more tourism.
But Council has gotten public pressure in recent years to curb tourism, which spiked during the pandemic and helped fuel the sales tax windfalls in 2021 and 2022. That pressure led to lower funding for the Steamboat Springs Chamber and a shift toward destination management, rather than direct marketing of Steamboat as a destination.
This year’s request from the chamber was for $700,000, an increase over last year’s $600,000 but still below the 2019 high of $850,000. In her presentation to council last month, Laura Soard, the Chamber’s senior director of destination development and communications, told council part of the plan for 2025 would be to market Steamboat as a destination during shoulder seasons. Soard said this is still a very small portion of the Chamber’s request, representing roughly $10,000.
City staff allocated $650,000 in the budget draft presented Tuesday. Council member Michael Buccino said this would likely lead to the Chamber pushing off redesigning its website for another year.
McGinlay initially lobbied to reduce the allocation to the chamber, potentially down to $400,000, saying that she felt there was little difference between destination management efforts and overt pushes to increase tourism. She also pointed other priorities in the budget like Steamboat Springs Transit that she would rather fund.
“We’re looking at increasing chamber funding this year, but lowing transit levels,” McGinlay said. “It just blows my mind that we would do that to our community.”
The majority of council members said they favored staff’s recommendation or even increasing chamber funding to the full $700,000 request.
“If we cut that back when sales tax revenue is under pressure, we are cutting off our nose despite our face,” Council member Steve Muntean said. “I just think that is a mistake.”
Council agreed to keep Chamber funding at $650,000 for now, though the topic is likely to surface again as council approves the budget later this month. They also agreed to maintain transit service by using almost all the $150,000 surplus in the budget presented by staff.
Council removes Stone Lane Bridge from capital projects list — for now
Caption: the proposed Stone Lane Bridge project would extend the road across Walton Creek to connect with U.S. Highway 40. (City of Steamboat Springs/Courtesy)
Council members agreed to remove a project to build a bridge over Walton Creek on Stone Lane from the city’s list of capital projects on Tuesday, though that doesn’t necessarily kill the project.
Residents on and around Stone Lane have been vocal with city leaders about the project, arguing the added connection to U.S. Highway 40 would bring additional traffic on the residential street and change the character of their neighborhood. The bridge project is in the early planning stages and is not receiving any funding in the draft budget.
The bridge has been part of the city’s traffic plan for decades and was made a larger priority by city council during budget talks three years ago, according to city Public Works Director Jon Snyder. If ever built, the bridge would address both day-to-day traffic on Walton Creek Road, in addition to adding another evacuation route for that area.
“At the time, the mass and chaotic evacuation of Estes Park was still a recent memory,” Snyder said. “We want to be as prepared as we can be when that happens to us.”
While council did agree to remove the bridge from the city’s broader list of capital projects, City Attorney Dan Foote suggested that the project likely wouldn’t go away. He said the City Manager is obligated to present capital improvements, and not presenting this project to a future city council may contradict the city’s charter.
“To the extent that this council doesn’t want to see this on a capital improvement plan again, that’s fine,” Foote said. “I think that the city manager probably wouldn’t be doing his or her or their job if the next council doesn’t see this item.”
While discussing capital projects, council members said they wanted to allocate some funding toward construction at Bear River Park, even if it only funds a fraction of the work that is needed. Members coalesced around the idea of allocating $700,000 in accommodation tax revenues toward construction of a limited number of amenities at the park like basketball and volleyball courts.
Swintek disagreed with his fellow council members, again pointing to the city’s need for dedicated funding.
“I think this is a slippery slope,” Swintek said. “I’m not supportive of us continuing to put money into this until we as a council figure out how to find dedicated funding for this.”
Council agreed to consider funding for the park further during a larger conversation about spending accommodation tax revenue. Council will consider approval of the overall budget on first reading on Tuesday, Oct. 8.