Rainy day fund provides Grand Lake a ballast against economic storm
Sky-Hi Daily News
Grand Lake CO Colorado
There may be hopes for economic rebound, but looking at Grand Lake’s budget, the future appears grim.
“Our budget reflects a reality that doesn’t get better,” said Town Manager Shane Hale.
With a 12 percent drop in revenues after a prior year that suffered 7 percent down, the town of Grand Lake cut 30 percent of its budget for 2010.
Cuts are reflected on various line items of the budget – mostly in operations.
“The budget represents a lot of tightening in a lot of places while still trying to hold on to the same services,” said Town Manager Shane Hale.
Grand Lake trustees adopted the $2.6 million budget on Dec. 14.
Save for cutting a part-time summer public works position and reducing the code enforcement hours from full-time to part-time, the budget falls short of employee lay-offs.
To balance the budget, the town dipped into its “rainy day” general fund reserves by $221,739.
“We’re planning on a rainy day,” Hale said. “We’re dipping into savings to operate at a level everyone has come to expect,” he said.
Grand Lake projects $780,000 in sales tax for 2010, a number down $160,000 from three years ago.
Meanwhile, use tax on motor vehicles sales is expected to come in around $12,000 in 2009 – “And that was with Cash for Clunkers,” Hale said – a total less than half what it was three years ago.
Use taxes on building materials, an indicator of waning development in town, is coming in at half of what it was in 2008. The town has budgeted $60,000 for 2010.
And since “cash is king” in the current economy, the town of Grand Lake has opted not to expend matches on grants, aiming to “hold onto reserves as best as we can,” Hale said.
But there are bright spots. From refinancing its sales-tax bonds, the town has saved on an interest rate that dropped from 5.9 percent to 3.6 percent. In dollars, the first two years show payments of $13,000 versus $90,000.
Likewise, a loan with a remaining $161,000 that helped to upstart the town-owned Grand Lake Headwaters Marina was refinanced from 7 percent to 4 percent for seven years.
And with $194,000 in federal grant funds due to come to the town in 2010, the town is investing $6,000 of its money to landscape and pave Visitor Center areas at the town’s entrance. The project is expected to start in the spring and will create a paved parking area for both the lower and upper entrances of the center.
Another project in the budget is replacement of the substructure of the roof of the town’s marina building and completely re-roofing it. From a windstorm last spring, $23,000 was paid from the insurance company, but the town is forced to kick in another $27,000 to fully replace what is needed.
And to help weather the economy, town trustees opted to cut contributions to area nonprofits by $21,000 this year.
The 2010 budget reflects a temporary mill levy rate reduction in the amount of 5.660 mills, in accordance with state law.
From preceding years’ 9.4 mills, the rate reduction shows a total mill levy to the town of 3.79 mills, meaning $302,929 less in the town’s coffers than if the levy were to remain the same.
– Tonya Bina can be reached at 970-887-3334 ext. 19603 or e-mail firstname.lastname@example.org.
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