Article Contributed on: 5/14/2009 3:40:19 PM
Thornton is finally beginning to feel the effects of the slumping economy.
The city is facing a projected $2.6 million shortfall this year, according to finance officials who briefed city council members at a May 12 meeting. The numbers are based on projections through the first quarter of the year, said finance director
David Boyd.
"Generally, things are not trending in a positive direction," Boyd told council members.
This is one of the first years in recent history that the city is going to be dealing with declining revenues, Boyd said.
Sales tax projections through March are down 5.8 percent with some retailers showing double-digit declines compared to last year, he said. Vehicle, building and residential values all showed significant declines.
"Restaurants, liquor stores, cable TV and grocery stores are about the only places we've seen much in the way of positive tax returns," Boyd said.
Though the news was grim, it could have actually been worse. The total estimated shortfall was projected at $3.4 million, but the city saved $800,000 on the 120th Avenue widening project.
"This is not terribly surprising to anybody who has been paying attention to what's going on," said Thornton mayor
Erik Hansen. "In reality, our numbers are probably a little bit better than most communities."
Based on the current numbers, the city would need to shave more than $20 million in spending from the 2010-12 budget, he said, which equates to a 7 percent cut.
"But these numbers are moving targets," Boyd said, noting the city will be looking at opportunities for savings in the budget. "We're literally getting new information every day that leads us to refine these projections. It's very difficult to try to guess or research what's going to happen month to month."
Property tax revenues also were significantly worse than expected, Boyd said, with some residents seeing declines as high as 20 percent compared to the assessed value of their homes two years ago.
NORTHGLENN PROPOSES WATER RATE INCREASE
The city of Northglenn will be hosting public hearings to discuss the details of a potential measure to raise water usage rates.
Two alternatives are being proposed to residents, including a four-tier-structure in which residents would pay higher rates after eclipsing 3,000 gallons of water in a month. The current rate, which is a three-tier structure, jumps for residents after they use more than 15,000 gallons a month.
The current rate charges residents $3.15 per gallons for the first 15,000 gallons; $3.70 from 15,000 to 23,000 gallons; and $5 for everything over 23,000 gallons.
The four-tier structure being proposed would charge 70 cents per gallon for the first 3,000 gallons; $3.15 from 3,000 to 10,000 gallons; $3.75 for 10,000 to 20,000 gallons; and $5.37 for everything over 20,000 gallons.
Several neighboring cities have adopted similar tier-based fee systems, including the cities of Thornton, Westminster, Denver, Arvada, Longmont and Aurora. According to a May 14 city memorandum from city manager
William Simmons and director of utilities
Raymond Reling, the tier-based system discourages waste through higher fines, leading to savings in electrical costs due to less pumping, reduced demand on infrastructure and water savings.
The other alternative is a flat rate in which residents would pay $2.79 per 1,000 gallons.
The alternatives will be debated at a May 21 city council meeting.