Parker budget steady, marginal growth in tax revenue foreseen

Proposed 2020 budget remains relatively unchanged from 2019 document

Posted 11/5/19

Parker in 2020 will look a lot like Parker in 2019, or at least it's budgeted that way. The town's proposed budget for next year shows marginal growth in tax revenue, but town officials are expecting …

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Parker budget steady, marginal growth in tax revenue foreseen

Proposed 2020 budget remains relatively unchanged from 2019 document

Posted

Parker in 2020 will look a lot like Parker in 2019, or at least it's budgeted that way.

The town's proposed budget for next year shows marginal growth in tax revenue, but town officials are expecting no loss in current services.

The 2020 proposed budget projects a 2% growth in sales tax revenue, a conservative estimate based on data from nearby municipalities, said Mary Lou Brown, the town's finance director. The 2019 actual sales tax revenue totals are expected to come in at 2%.

“We approached (2020) as being pretty much flat with last year because we didn't have a lot of new, incremental cash to work with,” Brown said.

Brown and the finance team released the 2020 budget Oct. 15. It is scheduled to be voted on by council Dec. 2.

The sales tax growth rate has been an issue for the town in recent years. Similar municipalities have experienced a trudging sales tax over the years, according to economist Phyllis Resnick of the Colorado Futures Center.

Last year, the town budgeted for a 0% growth rate in sales tax revenue, which Brown said the town will exceed in actual 2019 revenue. The same is expected for 2020.

“What (the budget) tells us,” Brown said, “is we're in good shape for 2020.”

To view the 2020 proposed budget summary, visit ParkerOnline.org.

Brown presented the budget before council for a first reading Nov. 4. The budget projects $53.7 million in expenditures, down from the actual 2019 budget of $57.6 million. Total revenue is expected to reach $53.6 million. The ending fund balance remains relatively flat with the previous year at $17.4 million.

The town will see about $900,000 in additional revenue from existing sources. Brown said her theme for the 2020 budget presentation was “repurposing,” one such source being refinancing the town's debt. The finance team was able to refinance the debt, from 2009, with a lower interest rate and using some cash to reduce the principal on the loan, saving the town $1.3 million annually, Brown said. The actual expenditures for debt refinancing in 2019 cost $7.2 million and next year's is projected at $2.4 million. The 2019 figure included a lump sum to help pay down a large chunk of principle during the refinancing process, as well as one-time fees that were related to the refinancing.

A facilities master plan will be developed to determine which buildings need updating or renovating in 2020. A user fee study will also take place, which will take a look at things like building fees to determine if the town is charging enough to offset its costs.

Parker Town Council placed a priority on providing services at the town's current levels while working within the constraints of a stalling sales tax rate, said Mayor Mike Waid, who speaks on behalf of all six council members. Waid responded via email to the Parker Chronicle regarding 2020 priorities laid out in next year's budget.

“To address the impact of limited sales tax revenue growth, the town continues to look at ways to reduce expenses and to offset the ongoing cost of growth and development on our infrastructure,” Waid wrote.

One such area, Waid wrote, was Ballot Measure 2A in this year's election Nov. 5. The measure would place a higher tax on new development to cover the costs of services that come with development, if passed. The ballot measure initative would not affect the general fund, but rather capital projects for new development such as extra law enforcement and first responder facilities and capital improvements for major streets, among other things.

“While sales tax revenue has leveled out a bit from previous years, it remains a challenge that we will continue to address as 2020 sales tax numbers come in,” Waid wrote, in response to a question about Parker in 2020. “To be very conservative, we have held 2020 operational expenses at or below 2019 levels.”

The town is spending $2 million on employees, including implementing a compensation study, which includes funding the performance pay at 3%, Brown said, and adding six incremental positions, three in the police department and three administrative positions.

Sales tax makes up 70% of the town's general fund, which is the town's primary source for most services administrative matters, police, public works and parks and open space, among others.

The general fund culture budget saw a dip in capital expenditures from last year, reflecting capital projects the town undertook this year, like the Schoolhouse Plaza renovations. The parks department, Brown said, is in a state of maintaining its current amenities rather than looking at adding new ones because of the marginal sales tax revenue growth.

The largest public works project is an $11 million project to widen Cottonwood Bridge, which will be paid for through the public improvement fund. The town and its urban renewal authority, Partnering for Parker's Progress (P3), will contribute funds. The project will be phased out in two parts to eventually create two one-way bridges of two lanes each.

Michelle Kivela, the town administrator who oversees all administrative operations in the town, including the budget, said it is encouraging to see the revenue show a positive uptick, despite a five-year trend of declininng sales tax revenue growth. Kivela responded via email to the Parker Chronicle regarding the concern for a slow sales tax rate growth.

“Even with the declining sales tax growth rate, in spite of a growing population, new housing and new businesses, our 2020 budget is a stable and healthy one and continues to accomplish our strategic goals,” Kivela wrote.

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