Gloomy though the national economic horizon appears, the Town of Pagosa Springs received good news last week when reports of sales tax revenues showed a second straight month of positive growth.
January sales tax receipts indicated a 5.71 percent increase over the same month last year. The report follows on the heels of positive local economic news from the previous month, that showed a 7.15 percent increase in December sales tax increase up from December 2008.
Since Archuleta County and the town share a 50/50 split in sales tax revenues, the report suggests a respite from an otherwise gloomy economic climate for the area.
“This is good news, indeed,” said Town Manager David Mitchem. “Although we’ll have to wait and see, things are looking better than what we’d thought they’d be.”
Asked if the town would respond to the two-month revenue increase with a return to a 5 percent budget decrease (as spelled out in the town’s budget policy) pulling back from the current 10 percent cut in the budget, Mitchem said, “That’s up to the council.”
“I can’t speak for the council,” Mitchem continued, “And they’ll consider this at (today’s) mid-month council meeting. My sense and my recommendation is that they’ll continue with caution and hold to the ten-percent reduction. I e-mailed town council my analysis and in that I said I felt there was no need to take any further reductions in the budget. However, I recommended that council ought to exercise some caution and continue to be prudent with expenditures.”
Mitchem also conceded that council would most likely not revise any current plans for restricting capital improvements not already funded in the 2009 budget. “Per policy,” Mitchem said, “new capital improvement projects will be held in abeyance until the mid-year review in June.”
Considering the future is no more uncertain than the present, however, council discussed capital improvements at length during its March 5 retreat.
“Council identified infrastructure issues. It was the beginning of a discussion on how to prioritize those issues and projects,” Mitchem said. “It was more of a philosophical discussion than a substantive one regarding current infrastructure and future projects.”
Using DOLA (Department of Local Affairs) grant matching funds already budgeted, the town issued a Request for Proposals (RFP) this week for hiring a consultant to assist council in prioritizing capital improvement projects — new projects as well as projects already underway — as well as grappling with the challenges of funding the maintenance of existing infrastructure. With an eye on adopting a capital improvement plan for the first time, council hopes the consultant will be able to assist the town in developing a strategy for dealing with various capital improvement issues while setting forth a cohesive plan to balance ambition with fiscal responsibility. The RFP has an April 24 deadline for responses.