On Oct. 10, the Pagosa Springs Town Council met for a work session to discuss the town’s proposed budget for fiscal year 2025.
A portion of the session was used to educate the council on how to navigate a new software being utilized by the town for the budget, a software called ClearGov.
However, there was also substantive discussion about the proposed budget.
Council member Mat deGraaf asked Town Manager David Harris a general question about past budgets and how much revenues could be expected to grow.
“What is typical for increases in budgets, in normal years?” deGraaf asked, with Harris answering that it’s largely dependent on the economy at any given time since revenues for the town, largely dependent on sales tax revenues, fluctuate depending on the state of the economy.
From “a revenue perspective,” Harris said, it’s a “fluid number.”
deGraaf then asked how the town could ensure that it continues to see growth in revenues to continue supporting “compensations and packages” for employees, making the town an attractive and competitive employer going forward into the future.
“How do we get more money into the General Fund to help support those efforts?” he asked, with Harris suggesting that the town could consider getting “beyond the sales tax.”
“There are a lot of ideas floating out there” to “solve the revenue question,” Harris said, mentioning that franchise taxes are one possibility.
“Do we throw a tax on our garage collection? Do we throw a tax on our electricity with LPEA?” he asked.
The town is no longer able to charge internet service providers for the use of its right of way, he explained, “but we are still able to charge electricity and waste service providers.”
He mentioned impact fees as another possibility to “build up a robust capital war chest for the eventual replacement or expansion of the sewer system or water system, or whatever you’re operating.”
He also floated the idea of considering an increase in the lodging tax, “in order to fund some projects that would put heads in beds during the shoulder seasons. Is that a civic center, for example? A place where we can hold conventions.
“Is that something we would want to steer towards parks and trails?” to try and attract sports competitions to the area, such as “a youth volleyball meet or a youth soccer meet?
“I think it would be helpful for all of us to all sit down and ask ourselves, ‘How do we want to fund all of these things, let alone our day-to-day operations?’”
Later in the meeting, deGraaf stated that the new budget software was useful in “organizing 10 million different pieces in a way” town staff “could work with, but I’m still left wanting my general overview of the finances of each department.”
He wondered if the council really needs this level of detail, “when I’m really just looking for a 30,000-foot view.”
Town Clerk April Hessman replied, “This program [ClearGov] is very, very robust,” and it does give the “30,000-foot view,” as well as the smaller details, once the user gets comfortable navigating the system.
Council member Leonard Martinez suggested that when he “jumped into the budget,” using the new software, he wasn’t getting what he “was looking for,” either, “which was how the budget related to strategies.”
He added that the details weren’t “helping me at all in terms of that.”
He continued, “That’s what I was trying to find, but couldn’t.”
Martinez expressed that he wants to see how the budget was directly aligned to the council’s strategic goals and priorities.
The latest budget proposal lists the town’s sanitation district, staffing and workforce housing as the town’s top three priorities.
Martinez explained he was hoping to see these priorities reflected in the budget, but that it was not clear to him how these issues were being addressed in the document.
Harris explained that the issue of sanitation would be “fluid over the next few months” as the town looks to finance repairs to its system with $4.5 million worth of revenue bonds.
On staffing, he noted that the 2025 budget proposes a 2.7 percent cost-of -living adjustment “to keep salaries competitive” for town employees, “so we don’t lose ground on that,” with the price of this increase costing $130,378 across all funds.
Harris explained on Oct. 1 that, compared to 2025, money will be saved by the town “changing its insurance provider for health, life, dental, and disability beginning in November 2024.”
“By making this change, the Town will save approximately $220,000 across all funds in 2025,” the budget proposal states.
On the issue of workforce housing, Harris said that “we have a new full-time housing coordinator that’s partially funded with grants, partially funded by the county.”
He added that, once the new housing coordinator “is up to speed, we will be having conversations about the Servitas project.”
Servitas is a Texas-based developer that the town contracted with to build workforce housing on town-owned property.
The housing project has stalled due to the developer and the town having a difficult time making it “pencil” at the price points the town wants for workforce housing in the community.
The council was able to work through three sections of the proposed budget — the Geothermal Utility Fund, Conservation Trust Fund and Trust Impact Fund — without making any major changes to the proposed budgets for these funds.
On the Geothermal Utility Fund proposal, Public Works Director Karl Johnson explained that the town is replacing the system’s heat exchanger and circulation pumps, saying that these improvements would be paid for through a grant.
He explained that the current equipment has been there since the system was built in 1982 and would be “in much better shape” after the repairs.
On the Conservation Trust Fund, there was some question about the town’s land purchase of riverfront property, at the former Bob’s LP site, which is currently under negotiation.
The purchase price of the property, around $800,000, would be paid for mostly through two grants — a state Great Outdoors Colorado Community Impact Grant, and a federal Land and Water Conservation Fund grant — that the town has applied for.
The “out-of-pocket” cost to the town for the property, if these funding mechanisms both work out, would be $50,000 that the town would take from its Conservation Trust Fund.
Mayor Shari Pierce asked why this was not accounted for in the budget proposal, with Harris explaining that “we are still in negotiations, so we don’t have a definitive number there, and we would probably be looking at our reserves to help cover that purchase.”
He continued, “It’s a fluid question right now. Until we get hard numbers, we can’t plug anything in right this second.
He added that, from the revenue side, “we are still hoping for those two grants” to pay for the property purchase.
He said that “until we know for sure, it’s hard to place in the budget,” with Hessman adding that “we don’t want to budget for things that haven’t been set in stone.”
“Do we need to make adjustments in case those [grants] come through?” she asked.
Hessman explained that the $50,000 could come from reserve funds, and “that adjustment could be made if that comes through.”
Pierce replied, “Well, that’s nice, but that wasn’t the discussion we had to use reserves” for the property purchase. “So, I just see this as having to be another discussion.”
She said, “If we get the grants” the town’s allocation would be $50,000, and that money was not allocated for in the budget proposal.
“We didn’t say we would go into reserves to do it. We said we would put it in the budget,” she said.
The council is set to hold another budget work session on Thursday, Oct. 17, following it’s regular meeting at 5 p.m. at Town Hall.
derek@pagosasun.com
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