As it does every year about this time, Telluride Town Council has begun its series of work sessions that will result in a budget for the next year. If they stick to the schedule crafted by town staff, a completed 2021 budget could be ready for adoption at council’s Oct. 27 meeting. Council is statutorily required to adopt the town’s new budget by Dec. 1.
The first session of budget talks started with a review of council’s 2020 goals and objectives, a more than three-hour, often-philosophical discussion that town manager Ross Herzog kicked off with something of an understatement.
“No one expected the amount of work this year has been,” Herzog said.
In what would have normally been an abundant, end-of-ski-season slide into offseason, Telluride’s economic engines were stilled by the COVID-19 pandemic. It was a public health crisis that led to the closure Telluride Ski Resort on state orders, and closed the doors to retail shops, restaurants and tourism. Town staff immediately went into Phase 3 of its recession plan, a mechanism put in place to send operations into a lean mode when revenues are threatened. Limits placed on town spending under that phase of the recession plan include a hiring freeze and a cessation of capital projects, among other cost-saving measures. Phase 3 has since expired.
When stay at home orders were eventually lifted, Telluride and other Colorado communities tiptoed into the summer, even as the season’s festivals fell like dominoes. What resulted was an unprecedented summer, one that saw, despite the absence of the large events that typically draw thousands to the valley most weekends, and the gutting of air travel, healthy numbers of visitors who took to the road and came to shop, dine and drink in the newly created outdoor eating areas, and crowded local trails, campsites and other recreation areas. Though sales tax numbers are down, the white-hot real estate market has resulted in Real Estate Transfer Tax (RETT) numbers that are robust. As of August, RETT revenue, which flows into the town’s capital fund, is significantly over budget.
Council, in keeping with one of its goals and objectives of preserving community (goals and objectives prioritizes how money is spent), changed course in the offseason and got to work re-creating the economic picture within the constraints of public health orders issued by the county and the state. It spent money on the outdoor restaurant and retail corrals along the north side of Colorado Avenue, streamlined liquor laws to accommodate outdoor consumption and established a rental relief fund for town-owned properties, a fund that was seeded by a local resident who donated his federal stimulus check, among other community support measures.
Thursday’s initial budget talks could not escape the specter of COVID-19, even as council looks to next year. Mayor pro tem Todd Brown reflected on the year so far and remarked on what he characterized as the town’s “huge reserves.” The reserves are currently at a respectable 25 percent of the annual operating budget.
“We should think about when we would choose to spend reserves,” Brown said. “If there was any time to spend down reserves, I would have thought it would be in 2020.”
Brown furthered opined that, since the novel coronavirus isn’t going anywhere, that council’s goal of preserving community should remain of paramount importance.
“Preserving community takes on a different meaning when people are facing eviction and are out of work,” he said.
Council member Adrienne Christy said she wouldn’t mind dipping into reserves in order to sustain the community.
“It’s pretty clear the town needs us to spend money on the community,” she said. “I’m comfortable with spending down reserves.”
Christy also stressed the need to separate “our values from what will be actionable goals.”
Under the umbrella of the goal of preserving community, affordable housing is considered key to achieving that objective.
“I think the number one thing we need to do is increase our rental housing inventory,” said council member Geneva Shaunette. “This is what our community needs from us.”
Shaunette suggested using a portion of this year’s RETT collections for that purpose.
The recent completions of the Silver Jack and Longwill affordable housing projects have served to fulfill council’s goal, but the virus stalled the joint town and San Miguel County Sunnyside project. That project, located just west of Eider Creek Condominiums on the Spur, was supposed to have started construction by now, according to town project manager Lance McDonald.
“Sunnyside would have been completed by next summer,” he said.
Sunnyside and the Voodoo Lounge site (located on the corner of East Pacific Avenue and South Willow Street) would each have been underway had the pandemic not halted progress.
Council member Lars Carlson stressed the need to continue land banking for the purpose of building affordable housing.
“We need to continue to address land banking,” he said. “There are only a few parcels left and if we wait, we’ll miss them.”
Exploring other potential housing locations, such as in the Southwest Area Master Plan area, has also been thwarted by the pandemic. Town planning director Ron Quarles said forward movement on that area was “interrupted by COVID.”
“We’re waiting for a good opportunity to spend some productive time with council,” he said.
Council and staff also discussed priorities such as maintenance of municipal structures such as the Town Hall and public works buildings, as well as ongoing improvements with the Bridal Veil water treatment infrastructure. Long-range gondola planning also remains on the horizon as funding for the free transportation link between Telluride and Mountain Village will sunset in 2027. Currently the Town of Mountain Village owns and operates the 23-year-old gondola system, as well as provides the busses used to shuttle passengers to and form the two towns in the vent of shutdowns. The Telluride Mountain Village Owners Association funds the majority of its operations via a 3 percent Mountain Village real estate transfer tax. Grant money has fed about $10 million into the gondola’s budget, while Telluride Ski Resort’s 1 percent of lift ticket sales provides about $200,000 per year. Operations and maintenance weigh in at $3.5 million, while capital and major repairs account for anywhere from $50,000 to $2 million. Those costs and how they will be sustained are being eyed by local governments already.
Yesterday’s talk also considered, not just the coming winter, but also how summer of 2021 will play out. Whenever festivals return, it’s not likely they will look the same.
“When and if festivals return, it won’t be business as usual,” said parks & recreation director Stephanie Jaquet.
The coming year, said mayor DeLanie Young, will be “an opportunity to create our new normal.”