As the proposed 2025 budget is submitted for approval, it’s important to review how our city’s services are funded. When I started as a city councilor, I was surprised at the complexity of the Glenwood Springs budget simply due to the sheer variety of services that the city provides. From multiple utilities to the fire district, roads to recreation, the total budget represents 24 different funds.
The city must keep a positive fund balance in each fund and must comply with restrictions on what is allowable spending. On top of that, the city goes through a rigorous annual audit by an external third party with publicly available reports.
Now, let’s dig into how the city generates money and where it is allocated.
How are city operations funded?
The city of Glenwood Springs is primarily funded by a 3.7% sales tax and enterprise fund fees, I’ll elaborate more on these shortly. This sales tax generates approximately $30 million annually for our city from purchases made by residents and visitors. These vital dollars have to cover everything from general operations and staff salaries to capital projects and equipment, including the police department, parks and recreation, transportation, street repair and maintenance, large infrastructure projects, and so much more.
A unique challenge for the city is that our general fund has to fund 18 different departments and provide support for five different enterprise funds. The breadth of these services presents hurdles in cross-training among departments with specific skill sets and requires centralized services like finance and information technology to support many different software platforms and workflows.
The city also proactively applies for external grant funding to assist with special projects and has been thankfully very successful in securing grants for infrastructure and transportation projects from the state of Colorado, the federal government and more.
How is sales tax revenue allocated?
Looking at a receipt for a general retail purchase, sales tax is divided into four entities: state of Colorado (2.9%), Garfield County (1%), Roaring Fork Transit Authority (RFTA) (1%), and the city of Glenwood Springs (3.7%), totaling 8.6%.
Our sales tax is collected in five different funds, and the money allocated within each of these funds cannot be spent on anything outside of this designation. For example, the city may not use money collected for the street fund on anything other than street projects
- General Fund (1.5%) – this fund covers 18 departments and their corresponding staff salaries and benefits, insurance, technology, tools, and equipment.
- Street Tax Fund (.5%) – this fund solely pays for repair, rebuilds and maintenance of existing roads and bridges, including paving, filling potholes, snow plowing, traffic signals, crack sealing, painting and striping, etc.
- Acquisition and Improvement (1%) – this fund, approved by voters in 2016, is for big projects such as South Midland, 27th Street Bridge, the Sixth Street Improvements, South Bridge and the confluence. It also subsidizes the community center, Historical Museum and Art Center.
- Transportation Fund (.2%) – this money funds Ride Glenwood and public transportation costs.
- Capital Projects Fund (.5%) – this fund covers capital needs such as vehicles or new equipment for departments in the general fund, this includes everything ranging from police cars to snowplows, excavators to playground replacements.
What is enterprise fund revenue?
Fees also provide funding for various city services, including electric, water and wastewater, the landfill, trash and broadband. Dollars generated by an enterprise fund can only be spent on its corresponding services. For example, money generated by water usage bills cannot be spent on the landfill.
Enterprise funds are designed to be self-sufficient; their revenues cover the cost of operating and capital needs, but they do not make a profit. Rate studies determine utility rates to ensure that the revenue generated will cover expenses while keeping customer costs as low as possible.
The city operates on a shared services model, which means that enterprise funds still receive support, usually from the general fund, for services such as human resources, finance, information technology, etc.
Where does my property tax go?
Revenue generated by property taxes for the city and the Rural Fire Protection District are exclusively used for the Glenwood Springs Fire Department. These dollars are not allocated to any other city services such as streets, utilities or parks. The department responds to all types of fire, emergency medical services (EMS), rescue, hazardous situation incidents, and more. Unfortunately, these property tax revenues only support about 50% of the fire department budget, the rest of the funding comes from the General Fund.
How is the budget determined?
Over the last few months, Council has worked with city staff to review the budget and provide direction for different priorities and initiatives. On October 3, staff will submit the proposed 2025 budget. Residents are encouraged to review the proposed budget and email ideas to city council ahead of the public hearing, scheduled for October 17. The proposed budget and past budgets are available to view on the city website at cogs.us/budget.
If you have questions or comments about the budget process, please reach out to me at Ingrid.Wussow@cogs.us, or you can reach all of city council at CityCouncil@cogs.us.
Ingrid Wussow is mayor of the city of Glenwood Springs. She has served on Glenwood Springs City Council since October 2020.
