Colorado Springs City Councilors were no doubt ready for 2009 to end. With the passing of the year, they at least symbolically put to bed the difficult 2010 budget and the dramatic 2009 election.
But the relief was short-lived.
Their informal Jan. 11 meeting brought discussion of what to do about a predicted $27 million 2011 budget shortfall. (Shortfalls are also predicted in 2012 and 2013.) The formal Jan. 12 meeting was highlighted by exhaustive discussion with Douglas Bruce and his supporters about how apply the budget-busting Issue 300 to city finances. It looks as though Council is warming to Bruce's interpretation, which could cost them around $50 million a year when fully implemented, but most expect the issue to be settled by the courts.
There's plenty more drama on Council's heaping plate, of course. A committee is being formed to decide the future of Memorial Hospital. Community centers, pools and other parks facilities have just three months of funding. The Pioneers Museum has a year's worth. They all need to find new sugar daddies soon, or they'll close.
In November, Colorado voters will vote on ballot issues that could further decimate state and local governments: reducing fees, outlawing permanent tax increases, and eliminating the city's ability to issue debt or fees without voter approval. Locally, voters will likely have the chance to form mini-governments to pay for parks, and possibly transit.
Big change seems inevitable.
"We have an obligation to address our challenges so that the incoming Council in 2011 at least has a foundation to work from," Councilor Tom Gallagher notes.
So what comes first? We talked with Vice Mayor Larry Small, Gallagher and fellow Councilors Jan Martin and Randy Purvis about top priorities.
The pension problem
Arriving as regularly as ocean waves, every Springs budget shortfall crests with a certain degree of panic, then flows into declarations that the city must identify its "core services," and match its expenditures with its revenues.
Often, committees are formed. Reports are made. And in the end, Council agrees to lay some people off, whack a little here and there, let the parks go a little browner, further decimate the bus system, and call it a day.
But Councilors say 2010 will be different. Really.
Using "comparison cities" as the gauge, the city's Human Resources Department maintains employees are underpaid. In past years, most of Council agreed. The atmosphere changed in 2009 when, with public support, Gallagher crusaded (albeit unsuccessfully) for across-the-board pay cuts, saying city salaries were inflated — especially since employees enjoy a cushy pension and excellent medical benefits.
In truth, compensation packages are costing the city dearly. When the recession hit the stock market, pension funds plummeted. Yet the city still had to provide a defined benefit. Up until the middle of the decade, the city was paying 8 percent in matching funds to its newer police and fire pensions and 10 percent to the Public Employees Retirement Account (PERA) plan for civilian employees. In the 2010 budget, those contributions have swelled to 21.3 percent, 15.1 percent and 13.7 percent, respectively. That's a total increase of over $8.3 million a year. And it's the tip of the iceberg.
Starting in 2011, the city will also likely need to start paying an extra $5 million a year to fund its older police and fire pensions. And long-term health costs for city retirees represent a $74 million unfunded liability.
State rules won't allow the city to drop pension plans. So Purvis says it makes sense for the city to cover that expense by cutting employee salaries.
"For now, we're not seeing an increase in turnover or people leaving prior to retirement," Purvis notes. "Which suggest we're still paying pretty good."
Gallagher agrees, while Small thinks salaries should be based on what the private sector pays local workers for the same job. (Apparently, that's less.)
Meanwhile, the cost to provide services is increasing, and the city continues to put off nearly $468 million worth of top-priority capital projects, plus another $300 million worth of top-priority drainage projects.
For perspective: The 2010 general fund budget is just over $212 million, 55 percent of which goes to public safety.
Aside from cutbacks, most Councilors think pursuing Sustainable Funding Committee suggestions could help the bottom line. There's also a lot of support for beefing up economic development, to bring in more tax revenue. Says Martin, "We need to be asking business owners what we can do to help."
Parks and transit
Parks and transit are traditionally the first necks wrung when times get tough. So for over a year now, the drive has been to get voter-approved special regional taxing districts — one to support parks and one to support buses.
Purvis has been helping with the parks district idea for six months. He says he was initially hesitant to further compartmentalize city government, but it seems to be what voters want. He hopes they'll approve it, assuming it makes the ballot.
Every Councilor talked to for this story agrees that parks are an urgent priority. If funding isn't secured soon, grass will die of thirst, and the cost of replacing it will be prohibitive.
Some like the districts idea. Gallagher's not one of them, saying, "I didn't run for office to oversee the dismantling of the city government."
Gallagher's says the district idea means handing over ownership of city assets to the new districts without compensation, and giving control to independent boards. He'd rather scare up money through cuts elsewhere to fund parks, and use partnerships with school districts to pay for transit services.
The rest of the priorities are a bit more jumbled.
• Small wants to see a plan, pronto, that will get the homeless camps out of the creek beds. While he's hopeful that a community group's plan for building a new shelter (see Noted, p. 12) will come to fruition this year without government help, he is not opposed to having Council spend one-time money to expand existing shelters, so long as nonprofits pay to operate them.
"We do have some money in reserve," Small says. "And I think it's something we have to look at."
• There's at least some interest in rethinking the governance of Colorado Springs Utilities. Martin says she'd like to explore the idea of having Utilities run by a board of experts, instead of by Council. Gallagher wants to overhaul the entire governance system. Now, Council sets only policy, telling administrators what they can't do. Then Council relies on the same administrators to report on how well rules are being followed.
"Essentially, it's 'Trust but don't verify,'" Gallagher says. "I've got a problem with that 'Don't verify' part."
• A committee is being formed to make recommendations on Memorial Hospital; selling has long been a temptation. But don't expect Councilors to decide soon. Any action would likely take years. (Of course, there's no big rush to make a decision, since Memorial is making money.)
• Martin points out one other goal that can't be overlooked. After being punished by voters in elections, and suffering through embarrassing fallout with the Olympic Committee retention deal, she says, "Council has to figure out how we get some credibility back."