Vail finances a tight fit for 2003
Vail’s budget has shrunk by almost $4 million over the past four years. But instead of more budget cuts, town leaders are looking to beef up the town’s finances, especially after Vail voters shot down a $2.25 million property tax increase.Scrambling for sales taxesThe Vail town council adopted what they have referred to as a $32.5 million bare bones budget for 2003, which includes $800,000 in service and staff cuts.But beyond eliminating a code enforcement officer and cutting bus service during the off-season, council members say the town needs to be weaned off its sales tax dependency to avoid an all-out financial famine, first predicted by Vail Town Manager Bob McLaurin as far back as 1995.The town’s tourist-based economy has sputtered for the past decade. In the early 1980s, sales tax revenues grew at double-digits rates, but since 1998 collections have not made it past the $15 million mark and not kept pace with inflation.In 1998 the town’s budget was $36 million. Last year it was $41 million. Of that, $21 million came from the town’s reserve stash, partly to pay for $9 million in capital projects and partly to keep up with rising operating cost and shrinking sales tax collections.Lean but not too meanUntil this time next year, the town will follow a rigid exercise in cost caution.It’ll be painful, says McLaurin, but town residents shouldn’t feel the pinch much, or at all.”We are beginning the new year as conservatively as we can without major impact on services,” McLaurin says.Based on pessimistic predictions, the town’s sales tax collections won’t yield a penny more than $14.6 million, as in 2002, and parking won’t pay out more than $2.3 million. Council members adopted a budget that reduces costs, while contributing to causes they hope will stimulate the local economy.For $800,000 – the council fell short of its set goal to trim $1 million – the town will lose the equivalent of two full-time staff positions and frequency in bus services during the off-season months.Staff positions will be cut through attrition – the same way the town has eliminated 14 positions since 1998. The town employs 220 people.Unless sales tax collections plummet, the 2003 budget contains a few bright spots for Vail’s work force. Several positions in the police department have been added through outside grants, and full-time employees have the chance to receive a 2.5 percent merit increase – a bonus McLaurin says is necessary to remain competitive in a tight labor market.Cash for Classical Music & Money-MakersCharitable contributions have been cut by $400,000, but still remain at nearly $1.4 million – the level of requests from previous years.While charity is noble, council members are focusing dwindling funds on events that bring money to Vail.Contributions such as the $300,000 to Bravo! Vail Valley Music Festival were made with that in mind. Bravo! is bringing the New York Philharmonic to Vail for the next three summers.The Betty Ford Alpine Gardens didn’t make out as well. The council denied a request for $95,000 to expand the high-altitude garden, after members said the non-profit organization should be able to raise funds for expansions. They pointed out that the town already helps with operations to the tune of $50,000 a year.Likewise Vail Today, a non-profit organization founded by Vail resident Rick Scalpello to bring street performers and festivals to Vail, received nothing. Scalpello requested $70,000.Overall, more than 30 organizations received an average of 16 percent less than they asked for.Cash for Vail’s two coresDonovan Pavilion and Donovan Park, a $10 million project, is scheduled for a ribbon cutting in July, but beyond that no new public buildings are scheduled to hit the ground this year.While nothing new may be on the immediate horizon, a specially-appointed committee will begin planning Vail’s $46 million convention center, approved by voters last fall. The center will be funded through an increase in sales and lodging taxes. Construction is scheduled to be completed in 2005.Lionshead will be a different place by 2005, promised Vail Resorts’ CEO Adam Aaron during the Jan. 3 community meeting.The $20 million renovation of the ski company-owned Marriott hotel in Lionshead is just the tip of the iceberg, he said, but serves as a perfect example of why the town needs to reinvest into its two commercial areas – privately and publicly.”It was ugly as a skunk,” Aaron said of the Marriott, which resurfaced from months under plastic as a European-style grand hotel with spires and copper roofs.Three penthouses added during the renovation sold for $900 a square foot, he said to gasps from the audience.”I guarantee you five years after the Lionshead core has been redeveloped, just about every other building will be redeveloped,” he said, adding that condominiums currently worth $400 a square foot will be renovated to fetch a higher price.Aaron, who was pitching the ski company’s $500 million plan to rebuild five of its holdings in Lionshead, said Lionshead property owners will need to work hand in hand with the ski company and the town to make a Lionshead’s rebirth possible.In all, as many as 20 other private property owners in Lionshead and the village have announced plans to rebuild or renovate by 2005. The two cores could see a renovation worth more than $800 million in private dollars over the next three years.Cashing in on a once-in-a-lifetime chanceThe town wants to raise $60 million to renovate plazas and other public areas in Lionshead and the Village while the construction cones are out. Several public financing mechanisms used for urban renewal projects are being considered, as well as a rerun of the property tax question.Coming up with the funds for public improvements will be a challenge, but a chance that can’t be missed, said town leaders while lobbying for the property tax last November.”The ski resort that does nothing and sits back and waits for success, will not find it,” said councilman Chuck Ogilby. “The longer we wait the farther out is the pay-off.”Instead of hunkering down when times are tough, Ogilby advocated going ahead with public improvements to take full advantage of private developments breaking ground.Though voters rejected the property tax increase, finding funds to investing back into the commercial cores is the way to go, McLaurin says.”We must continue to place an emphasis on our capital projects needs as a first priority,” he says. “Otherwise, the lack of reinvestment in our basic infrastructure would be fiscally unsound.”Even without any concrete plans for capital construction in 2003, the town will dip into its reserves for $1.1 million, ending the year with $11.6 million in the bank.The dip would be even bigger if it weren’t for the town’s dependable Real Estate Transfer Tax (RETT), used for recreational amenities and parks.For 2003, RETT is predicted to collect the same as in 2002, about $2.7 million. Combined with a $3.3 million starting balance, the fund will pay for $1.3 million for park maintenance, $1 million for streetscape design and $530,000 for open land acquisition. By the time the 2004 comes rolling around, RETT’s ending balance will be down to $1.3 million.Vail’s financial future will be the subject of many discussions in 2003.Council members will take time at the each of the council’s bi-monthly work sessions to talk about ways to fatten Vail’s finances. The council’s work sessions take place on the first and third Tuesday of the month. Work sessions start at 1 p.m unless otherwise noted.Geraldine Haldner covers Vail, Minturn and Red Cliff. She can be reached at 949-0555, ext. 602, or at email@example.com
The parcel where workforce housing is being proposed was listed for decades as belonging to the Colorado Department of Transportation.