CITY BUDGET: Salaries chew up millions for Colorado Springs

CITY FINANCES:  This is the first story in The Gazette’s six-day examination of Colorado Springs finances. Stories through Friday this week will examine spending on public safety, parks, road paving, transit and the government’s main sources of revenue. UPDATE: See a database that allows you to search for the names, titles and salaries of city employees.

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With more people to serve and less money to do it with, Colorado Springs officials say the government is in a world of financial hurt.

That’s the backdrop of a debate that’s simmered for years over how the government collects and spends the public’s money — culminating in a property tax-increase measure voters will decide Nov. 3.

Now may be a good time to get another cup of coffee.

If the subject of city finances turns your crank, you’re in for a treat. If not, just remember this stuff affects you and your wallet.

Even with $26.8 million in additional revenue from 2002 to 2008, Colorado Springs officials say the city is at a breaking point for its ability to maintain services. During the same period, the city’s population increased by an estimated 9,274 people, or 2.5 percent, according to the U.S. Census Bureau. Meanwhile, consumer prices rose 13 percent, according to the federal Bureau of Labor Statistics.

In other words, despite having a fatter bottom line, Colorado Springs has less money to spend per resident than it did in past years. After adjusting for inflation, the city had $664 to spend per resident in 2002, and that dropped to $624 last year, a Gazette analysis found. City finance officials project the figure will drop even more this year.

For proponents of the tax increase, the fiscal bind is the inevitable conclusion of a long-term slide in the amount of money the government gets from each resident. To critics, the tax proposal represents government officials’ failure to make tough decisions and trim spending, something they view as an essential response to a severe economic downturn.

If voters choose to triple the city’s property tax rate, the government promises to keep funding at 2009 levels. Voters will essentially be buying a range of services that would otherwise go away. Community centers will remain open, buses will keep running, police officers and firefighters will remain on their jobs.

Aside from the spin and snarls from activists on both side of the debate, voters are asking a basic question: Is the city government wisely spending the money it gets now?

The answer, of course, depends on how each person defines “wise” spending. But the vast majority of general-fund spending goes to salaries and benefits for the city’s 1,805 employees, from cops responding to 911 calls to street maintenance workers patching potholes. Those employees are paid from the city’s general fund, the main source of city spending. A majority of the city’s general fund, 57 percent, goes to paychecks for workers in areas many people consider basic to city services: police, fire, parks and transit.

By the standard of most company and household budgets, the Colorado Springs city government has a lot of money to throw around. Seven years ago, Colorado Springs had $246.5 million in revenue, and last year it had $273.3 million, an increase of 10.8 percent according to the city’s annual financial reports.

Revenue is expected to drop some this year, and fall even more in 2010 without a tax increase, but it will still add up to a lot more than chicken feed.

The question for many city officials, though, is whether all that money is enough to pay for the services residents want. Unlike a company or household, Colorado Springs has few options for new sources of revenue. The government can’t just jack up tax rates without voter approval.

However, the government can form new agencies, called enterprises, that charge fees for the services they provide. That’s what opponents call an illegal tax in disguise, and the political risks of doing it are considerable.

Which leaves the city’s general fund — a huge pot of money funded mostly by taxes that’s designed to pay for day-to-day operations. And most general-fund spending pays for people.

Salaries and benefits for city employees cost about $168 million in 2009, accounting for about 70 percent of general-fund expenditures.

“It has to,” City Manager Penelope Culbreth-Graft said Friday. “We deliver services, so you would expect that to happen. You can’t have it any other way.”

The number of employees supported by the general fund was 1,805 this year, about at the level it was at the beginning of the decade. 

The biggest piece of the pie was gobbled up by public safety, the city’s No. 1 priority identified in annual strategic plans.

Nearly half of the city’s revised $228 million general fund this year was allocated to the police and fire departments. Of that, about 47 percent, or $107 million, was for salaries and benefits for the 1,459 employees. The employees include cops and firefighters who wear uniforms, and workers in support roles such as emergency dispatchers.

Public safety agencies tap into other sources of money outside the general fund. A public safety sales tax voters approved in 2001 generated an additional $11.9 million for the police department and $10.6 million for the fire department in 2009. About 76 percent of that money was for salaries and benefits.

Another significant chunk of the general fund — $15.6 million — went to the Parks, Recreation and Cultural Services department. That agency oversees dozens of city parks, 148 playgrounds, six community centers and a host of programs and services.

Like police and fire, parks and rec spends the majority of its general-fund allocation, or about 73 percent, on salaries and benefits.

The 2009 funding, however, was $4 million less than last year, forcing the department to make myriad cuts, including reducing watering at parks and locking up restrooms.

“We made it through the year, but the citizens did have an impact in terms of service levels and, we feel, the quality of the park system,” said department Director Paul Butcher.

The city’s bus service, meanwhile, spends a relatively small chunk of its general-fund allocation on salaries and benefits. Other spending items, such as fuel and maintenance, consume 92 percent of the $9.7 million general-fund budget for Mountain Metropolitan Transit, while the remainder goes to salaries and benefits.

Still, the transit agency cut about 50,000 hours of bus service in 2009, said Director Sherre Ritenour.
“The worst is yet to come,” Ritenour said. “(Next year) is going to be much, much worse because now we’re cutting into the bone, and we’re actually going to be losing parts now.”

This year, the bus service also got $9 million from the Pikes Peak Rural Transportation Authority, a separate government agency that levies a 1 percent sales tax in most parts of El Paso County. That money is not included in the agency’s budget for city spending.

Spending on police, fire, parks and transit accounts for the majority of the city’s general-fund budget, but tens of millions of dollars are spent on other items. Just a few examples: City Attorney’s Office ($3.5 million), Municipal Court ($3.5 million), Streets ($9.8 million, plus $11.7 million from the rural transportation authority) and Community Development ($10.3 million, plus $87.6 million from other sources).

Officials on Friday painted what they regard as a grim picture for government spending in 2010. The general-fund budget is projected to decline 8 percent from 2009, hitting $209.9 million, City Manager Penelope Culbreth-Graft said in a letter announcing next year’s budget. Accounting for funds from all sources, the city projects spending of $387.8 million in 2010, a 1.2 percent decline from this year.

“The city must now eliminate funding for entire service areas, reduce public safety services, and cut other community development and infrastructure programs,” Culbreth-Graft said. “The proposed reductions will impact the quality of life of our citizens. Due to the severity of the revenue loss, there is no way to avoid these reductions.”

Culbreth-Graft and other city officials recommended a range of service cuts, including slashing 35 positions in the Fire Department and 65 positions from the Police Department. Whether the government takes that path or identifies other ways of balancing the budget will be up to the City Council.