Saturday, August 13, 2005
There is a saying in the agriculture community that the smart rancher plans for drought when it's raining. The City Council would be wise to take that saying to heart.
Last week, the council discovered that the city's new $2 million tennis center actually will cost $3 million. Council members reacted with shock and frustration. Cuts will have to be found, they said.
"I feel like myself, the City Council, the community of Steamboat Springs, has been blindsided by this," Councilman Ken Brenner said. "I feel like someone has brought in integral calculus homework, thrown it on my lap and said, 'Do this.'"
But after all the hand-wringing, the council essentially signed off on the project anyway, asking only that construction not begin on anything that the council might want to cut later. We're not convinced that's the most fiscally prudent approach, particularly given the woeful job the city did of budgeting for this project in the first place.
Of course, fiscal prudence doesn't appear to be nearly as high a priority these days as it was 20 months ago. In fall 2003, the council argued for a property tax to fund fire and ambulance services. Without the tax, officials said, infrastructure and basic services would be jeopardized.
Of course, the property tax failed, just as it had the first time the city sought it in 2002. And, of course, the city has managed just fine without it, funding not only basic services and infrastructure but also amenities. In the past 18 months, the council has authorized $4.5 million for a new clubhouse at Haymaker Golf Course and the replacement of the tennis bubble for, we assume, somewhere between $2 million and $3 million.
Don't misread us -- we don't quibble with the need for a new golf clubhouse and tennis center. Haymaker has survived for a decade with what is, in essence, a mobile home for a pro shop. And the tennis bubble, which was constructed poorly to begin with, literally was coming apart at the seams. Both amenities are amenities that keep attracting visitors to our community.
Where we are left scratching our heads is the "spend now and worry later" attitude from a council that knows what it feels like when things are tight.
True, the picture has changed. Sales tax numbers have soared since 2003. In 2004, city sales tax receipts were up more than 7 percent compared with 2003, adding more than $1 million to the city's bottom line. Halfway through 2005, receipts are 6.5 percent ahead of 2004, and the city is on pace to net more than $16 million, which would be $1 million more than in 2004.
What should the city do with that extra cash? Spend it, if what we are witnessing is accurate.
We know there are those who will argue that because the $4.5 million clubhouse is being paid for with lodging-tax dollars and not sales-tax dollars, it doesn't really count. But that's not true. For example, if the city had held the cost on the golf clubhouse to, say, $3.5 million, that would have freed another $1 million in lodging-tax funds to use on a new tennis center.
As it stands, the city is looking at spending $7.5 million on what clearly are amenities and not essential services. And that's assuming the cost to build the Haymaker clubhouse hasn't exceeded the original estimate.
The problem with our city's heavy dependence on sales taxes is the cyclical nature of such a tax. When the economy dips -- and it always does -- so do revenues. That's when the decisions the city makes during the good times come under greater scrutiny. As we enjoy our current boom, we would urge council members to consider carefully what they are buying, how much they are spending and how much they are saving for the inevitable bust.