Springs faces $23.3M shortfall

Colorado Springs faces a $23.3 million shortfall next year due to falling sales tax revenues, leaving the City Council facing a decision on cutting spending, increasing fees or asking voters for a tax hike.

Two council members said Thursday they'd rather cut than saddle taxpayers with a higher bill for city services.

"It's going to take some imagination and creativity and doing business differently," Vice Mayor Larry Small said.

"I don't want to ask for a tax increase, and I don't want to impose any new fees in this economic environment on businesses and residents who are already paying the bills. I would rather cut back just like they're cutting back."

Councilman Darryl Glenn said he wouldn't support any "revenue enhancements."

"The size of our government has outpaced our ability to sustain it," he said. "We're going to have to do some pretty serious cutting."

City Manager Penny Culbreth-Graft will lay out the projected shortfall in detail at 1 p.m. Monday during an informal council meeting at City Hall, 107 N. Nevada Ave.

In a memo released Thursday, she noted several reasons for the funding gap:

• A more expensive transit contract, pension obligations and fuel for bus service.

• The city's second of three $1.75 million payments in a federal lawsuit settlement over police overtime.

• The first $1.867 million payment on debt the city issued as part of its successful effort to keep the U.S. Olympic Committee's headquarters in Colorado Springs.

• Rising fuel and equipment costs.

Meantime, sales tax revenue is declining because of the economic slowdown.

In her memo, Culbreth-Graft said a key problem facing the city is reliance on one-time money to pay for ongoing expenses - the city has dipped into reserves or spent money from land or asset sales to pay operational costs.

Options she provides to close the gap next year include using reserve funds, layoffs, reducing capital improvement spending or raising fees.

She didn't specify which fees might be increased, but the city could sell naming rights to city assets or increase the cost of traffic fines.

Small said he favors capital spending cuts, including vehicle purchases and street repaving. He also said he is open to more outsourcing.

Medical insurance costs might be lowered, he said, if all city enterprises participate in the same program, rather than a variety of plans.

That said, he said program cuts also might be necessary. "Parks and the senior center, I think we need to take another look at how we operate those," he said.

The city manager's 2009 budget proposal is due Oct. 1.

Culbreth-Graft imposed a hiring freeze and other measures in July to offset a projected $8 million revenue shortfall this year.

She also has drafted a "department consolidation" plan she hasn't discussed publicly but believes will be a money-saver.

-

Contact the writer: 636-0238 or pam.zubeck@gazette.com