Gypsum budgets for a big-spending year
November 27, 2013
The town's spending exceeded its revenue last year by $1.1 million due to some unexpected projects but the town is finishing up 2013 about $260,000 ahead.
Thanks to a healthy reserve fund that has built up over several years, Gypsum has been able to weather challenging fiscal times and is even ready to take on the major project of expanding LEDE (the name is derived from the initials of the four families who originally built it) Reservoir next year. Gypsum rolls into 2014 with $2.5 million in the reserve fund.
"We have been spending more than what has been coming in, but we only do that if our savings is beefed up, which it is. We've been saving for LEDE for a while now," said Gypsum Town Manager Jeff Shroll.
The 2014 draft budget anticipates the operating expenses to once again exceed revenues by $551,000. However at the end of the year, Gypsum still anticipates a reserve totaling $1.9 million.
“We have been spending more than what has been coming in, but we only do that if our savings is beefed up, which it is. We’ve been saving for LEDE for a while now.”
Gypsum Town Manager
"We usually collect more than we budget for – we like to be conservative when estimating our sales tax – so when everything is said and done, we're ahead," said Gypsum Finance Director Mark Silverthorn.
The 2014 budget is scheduled to come before town council for final approval Dec. 10.
Sales tax is on an upward trend for Gypsum. Last year saw just under $4 million in revenue and 2013 is on track to reach $4.155 million. The trend is expected to continue next year with an anticipated $4.3 million in revenue.
Partly responsible for the climbing numbers is that Gypsum ended it's revenue-sharing agreement with Eagle at the end of 2012. The revenue-sharing agreement dated back six years and split unencumbered sales tax revenues from the Costco retail block with about $400,00 going to Eagle every year. That money is now in Gypsum's pocket.
Gypsum also has an agreement with Costco to rebate 15 percent of the store's sales tax for at least the next four years. The arrangement stems from an original deal in which the town returned 38 percent of the sales tax for three years, or until a $4.2 million cap was reached. When the revenue cap wasn't met in three years, the town rebate dropped to 15 percent of the sales tax for an additional two years.
Gypsum renewed the agreement in 2012 at 15 percent with no cap for five years. The estimated rebate to Costco this year is $346,500 and 2014 is budgeted for $350,000.
"The way I look at it is that it's money Costco generates in the first place," Shroll said of the town's efforts to foster a friendly relationship with the store.
Every year the town spends about $270K on Gypsum Daze. In 2013, the event cost $262,000 and brought in $72,000 in ticket sales and other direct revenue. Next year is budgeted for $277,000.
The high price is attributed to the big country music names that perform at Lundgren Theater and the town's mission to provide as much free or affordable fun for families as possible.
"We do lose money on it but it fits in with our statement that we want a big day for families where they can get things like free hot dogs and we're not nickel and diming them," Shroll said. "About 4,000 people attend. It's intended for our residents but the event has grown into one of the biggest in the valley and people from out of town are coming, too."
Silverthorn said the event provides a unique opportunity.
"Where else do you get tickets to see LeAnn Rimes for $15?" he said.
Gypsum Creek Golf Course became a municipal amenity when the town bought it in 2010. Since then, the facilities and grounds have needed a lot of work and the town is trying to find the sweet spot of the business.
For the first time since it changed hands, the course has a hard closing date set for Dec. 1 this year.
"It becomes more of a cost burden to stay open beyond that," Shroll said.
Weather is another challenge. Cold, wet weather slowed business down at the beginning of the season, while July had record numbers.
"We took a hit in March, April and May," Shroll said. "It hurt, no doubt."
This year saw 84 percent of the total anticipated revenue for the course, at $572,000. That's a drop from last year's $606,000. This year was estimated to see $669,000 and next year is budgeted for $748,000.
LEDE Reservoir is the big-ticket item in 2014. The reservoir will be expanded from 431 acre-feet of water capacity to 947 acre-feet.
An acre-foot is the volume of water to cover an acre with a foot of water.
Gypsum recently accepted a $2.6 million bid from Hobbs Excavating for the expansion. The bid came in under budget and Hobbs plans to start work as soon as possible this fall, with most of the work being finished next year.
"This has been a long process to get to this point," Shroll said. "We've spent $1.3 million to date and waited three years to get all the permitting."
Even with that expense, Shroll anticipates finishing 2014 with about $1.9 million in reserves.
"That's assuming there are no emergencies," he said.
Smaller road and trail projects for 2014, which are budgeted for approximately $600,000 total, include:
Bike path from Valley Road to Grundel Way
Paving Chatfield Lane from Valley Road to Stoney Creek
Paving Jules Drive from Highway 6 to the top of the hill
Willowstone Bike Path repairs
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