CITY WEATHERS RECESSION — CONSIDERS HOW TO SPEND SAVINGS


May 26, 2011

by John Kiljan

Almost $4.6 million is on the table as the Arvada City Council considers how to allocate savings from cutbacks made during the recession of 2008/2009. The Council will be having a special study session on Tuesday, May 31st, at 5:30 PM at the City Hall to decide how to spend this large one-time surplus.

Arvada fared much better than many other cities during what is often known as the Great Recession. Falling sales and property tax revenues wrecked havoc among city, county and district budgets across the State, causing layoffs, library and school closings, street lights to be turned off and cutbacks in garbage collections. The pain still persists for many local governments. In addition to school closings, our own school district will soon be charging for bus service and cutting some educational programs.

Arvada did not escape the recession by any means. City income was hit by falling sales-tax revenues and falling user fees from water and sewers, golf courses and cultural events held at the Arvada Center. The City’s small property tax also took a hit as home values fell.

Still, the City did not have to dip into its emergency reserves during the recession. It was able to compensate for lost revenues by not filling vacant positions, eliminating other positions and with budget cuts in its various departments. The City did this with only modest cutbacks to public services.

Many of those savings carried through to 2010. Moreover, what has been a slow economic recovery for other governments, has brought unexpectedly good news to Arvada: Sales tax revenues and user fees have been rising at a greater rate than expected, and expenditures (particularly salary costs) have been much less than anticipated. For the fiscal year ending December 31, 2010, the City had a budget balance of over $21 million. This was $4.6 million more than planned.

It’s normal for the City to have an account balance at the end of each year. Usually, that’s due to contractual obligations for such things as construction projects that are underway, but will not be completed until the following year. That and other capital improvement projects are simply carried forward into the next fiscal year. However, even accounting for that, the $4.6 million number for 2010 was a lot more than expected.

During a March 21, 2011 City Council budget presentation, City Council member Bob Dyer remarked, “That’s a staggering number we’re talking about.”

WHERE DID THE NEW MONEY COME FROM?

The answer seems to be from a combination of Arvada’s own conservative accounting standards, higher tax revenues and lower than anticipated expenditures. According to Arvada’s Director of Finance, Victoria Runkle, for 2010 the City took in $2.2 million more in revenue than anticipated and spent $6.5 million less than anticipated. The increased revenues came mostly from sustainability grants, a 1.1% higher-than-anticipated sales-tax income rate and higher income from vehicle-purchase taxes. The reduced expenditures were in amounts carried over into fiscal year 2011 for various programs and nearly $1.9 million in lowered payroll costs. The latter came mostly from personnel vacancies in the police department.

WHERE WILL THE $4.6 MILLION BE SPENT?

The City Council asked the City’s Executive Management Team to come up with a list of recommended expenditures. It’s a long list. Here are the top recommendations sorted by dollar amount:

Jefferson Parkway land acquisitions and other parkway costs: $2,000,000

Land acquisition for a future Gold Line/RTD parking garage: $750,000

Replacement fencing along the City’s arterial highways: $475,000

Increasing the General Fund’s reserve beyond a required 19% level: $400,000

Reprogramming the City’s building permit system: $250,000

Renewing Arvada’s “Historic Survey” in anticipation of future funding grants: $150,000

Stop-gap “Outdoor Lab” funding for Arvada’s 6th graders (partial funding): $115,000

Designing a master plan for the Stenger Sports Complex: $100,000

Partial replacement of the Arvada Center’s Main Stage Theater seats: $100,000

Replacing the City’s entryway and wayfinding signs: $50,000

Improving security and greeting services at the Arvada Center: $50,000

Expanding the City’s digital mapping capabilities to 3-dimentional coverage: $40,000

Identifying training needs for City Staff: $40,000

Creating a land-use plan for an expanded Lake Arbor Park: $30,000

Creating a land-use plan for a festival space next to the new O’Kane skate park: $30,000

Software improvements for the City’s existing digital mapping capabilities: $28,000

These 16 items would completely use up the available $4.6 million, but other second-tier options were also suggested by City Staff:

Two additional quiet zones along the UP railroad at $350,000 each.

Arvada Center amphitheater improvements: $1 million to $2 million.

80th Avenue sidewalks from Wadsworth to Sheridan: $2,000,000

Updating the Planning Commission’s Comprehensive Plan: $350,000

Sprinkler replacements at Stenger Fields: $1,800,000

Paving the parking lots at Stenger and Lutz: $1,200,000

For members of the Citizens for a Livable Ralston Community (CLRC) neighborhood association, the most notable items not included on the list were sidewalks along the central Ralston Road corridor, replacement recreational facilities for young adults living along the central corridor and, of course, the issue that never goes away — a replacement for the razed Fisher Pool.

WHEN WILL THE MONEY BE SPENT?

There appears to be no obligation to spend the available monies immediately, but the Council seems ready to act now. And, there may be some good reasons to act soon. Some needs are considered urgent. The City is nearly half way through the 2011 fiscal year. Construction costs are historically low and local unemployment is high. The City’s banked money is currently earning very little interest. The City only earned 1.4% interest on its cash reserves last year due to low market rates for short-term deposits and investments.

HOW TO PROVIDE INPUT

The Arvada City Council will hold a special study session at City Hall at 5:30 PM on Tuesday. May 31st, the day after Memorial Day, to discuss Staff’s recommendations. The study session is open to the public, but participation will be limited to short public comment periods. Check the Arvada.org website on the afternoon of Friday, May 27th, for details on the session’s room and agenda. The Council does not expect to formally act on Staff recommendations until the June 6th City Council meeting the following week.

Or, contact your own City Council members. Council members are usually eager to hear from their constituents. Arvada.org has a nice contact page that has recently been updated at http://arvada.org/about-arvada/about-city-council . It lists both telephone numbers and email addresses for each Council member.

WHERE TO FIND OUT MORE

During a March 21, 2011 City Council meeting, Council members received a short financial report outlining how the 2010 budget surplus came about. You can see the streaming video of that discussion by clicking on this link: http://arvada.org/media-services/council-meetings and then clicking on the “03/21/11” identifier in the listing. Slide the play indicator over to the 43 minute mark to see and hear the budget presentation and discussion. The most pointed questions about the budget balance were asked by Councilor Dyer at the end of the meeting. Slide the indicator over to the 1 hour 8 minute mark to hear that discussion.

During a short May 23, 2011 study session, the Council was given a more detailed list of “First Recommendations” for spending the remaining 2010 budget balance. But the Council only had 25 minutes allotted for reviewing it and they used almost all that time to discuss a single item (the R-1 Outdoor Labs). No consensus was reached.

The full list of proposed expenditures is not yet available online. Look for a link in the comments section of this article when they become available. Or ask your City Council representative for a copy. Or email this reporter to get a .PDF copy emailed back to you.

2010 Budget PDF File

The Citizens for a Livable Ralston Community will post more information online on its website at http://www.ralstoncommunity.org/ as it becomes available.

John Kiljan, CLRC News: 303-423-9875 or jpkiljan@yahoo.com

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One Response to CITY WEATHERS RECESSION — CONSIDERS HOW TO SPEND SAVINGS

  1. John Kiljan says:

    Follow-up: In addition to the “2010 Budget PDF File” shown above, the Arvada City Staff has released a 20-page memo describing the benefits of each of its primary recommendations. Most of the secondary recommendations (quiet zone railroad crossings, sidewalks, amphitheater improvements, etc) have now been removed. You can see the full memo, by looking up the Council’s current meeting packet on Arvada.org. Or try clicking on this link (you may have to cut-and-paste it):

    http://www.arvadarecords.org/councilpacket/current_week/06.A. Use of One-Time Undesignated 2010 Surplus Cash Study Session.pdf

    If you have a large enough monitor screen to view them, there are also six pages of charts for planned budget allocations for the next several years attached to the bottom of the document.

    The Tuesday afternoon meeting is scheduled to be in the Third Floor Conference Room. Enter through the lower City Hall entrance and take the elevator up to the third floor. The room is on the left.

    –JK

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