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What now? 

City leaders steel themselves for an unpleasant budget season and an uncertain future

'Oh my God! Oh my God!" City Councilor Jan Martin exclaims.

For a brief moment, it feels like the Blue Star's dining room is levitating. The lights are a little brighter. Heads whip around. Two supporters reach down to embrace Martin. It's just after 7 on election night, and a laptop is showing the first results. It looks like Issue 2C is gonna make it.

"Oh wait," says a voice cutting through the exuberance. "That's 300."

Martin's fingers reach for her mouse, and she scrolls down. Her head drops.

"This is as bad as it gets," she whispers.

Issue 2C, a proposed city property tax increase aimed at saving city services from severe budget cuts, is already going down by nearly 2-to-1. And 300, a Douglas Bruce initiative that will further cripple city finances, is passing by an unexpected 55 percent to 45 percent margin. It will hold up through the night.

More cuts now

For City Council, this is the absolute nightmare scenario. 2C's defeat means citizens will lose most parks maintenance and recreation services next year, along with half their bus service, and some police and fire personnel. And the passage of 300 means on top of that, the city will need to shave off another $3.7 million, bringing the total 2010 budget shortfall to $29.1 million.

The future looks bleaker. As 300 relentlessly cuts off payments between the city and its enterprises over the next eight years, the city eventually will lose $27 million in lieu of taxes it receives annually from Colorado Springs Utilities, currently about 11 percent of general fund revenue.

After hearing the results, stunned Councilors say the voters have spoken, and they will cut accordingly.

"The only thing that's left is public safety; everything else has been fairly decimated," Councilor Bernie Herpin says. "I guess Douglas Bruce will get his wish. He wanted to destroy Colorado Springs. I think this is a great step forward."

Meanwhile, downtown at Nosh, the atmosphere says it all. Only four people have turned out for an anti-300 watch party, three gazing helplessly at a computer screen while the other talks softly on a cell phone.

"It's dire," says Housing and Building Association spokeswoman Sarah Jack. "What's the point in the city owning assets when they don't benefit the city in any way?"

Jack says the results suggest that city officials haven't listened to voters. Kevin Walker, a developer who headed the anti-300 campaign, agrees: "People are angry, and they want to make a strong statement about taxes."

He quickly adds that passage of 300 hardly guarantees that Stormwater Enterprise fees will go away. State Rep. Bob Gardner, one of the four, agrees the city likely will seek a judge's guidance, because the measure's intent is impossible to understand.

The only other person at the solemn soirée is an accidental guest. State Rep. Larry Liston, who happens to be dining there, joins the group and blames both outcomes on voters' anger over what they see as taxes masquerading as fees.

Perhaps the worst part, Liston adds, is that 300's victory will "greatly embolden" Bruce in his neverending assault on government.

Big changes later

But not all are so glum.

Councilor Sean Paige says by phone that everything is on the table now, including outsourcing, privatizing, looking at assets to either sell or partner with others to operate and maintain, even assessing whether to push a law requiring local sales tax on Internet purchases.

"I think we really need to do a top-to-bottom assessment of how the city operates and undertake a re-engineering effort," Paige says.

Councilor Darryl Glenn is already working on a plan. Glenn, serving on a city-county task force and running for county commissioner next year, thinks he can help patch things up in 2010, and then put the city on firmer ground.

His target is the lodging and rental tax — expected to be about $3.5 million in 2010 — of which two-thirds normally would go to the city's convention and visitors operation, with the remainder subsidizing special events. The Councilor wants that money instead to cover the city's annual $1.5 million payment on the Olympic Committee deal and to help pay the city's legal obligation to finish paving the Pikes Peak Highway. The rest, about $500,000 (down from $2.3 million), would go to Experience Colorado Springs for tourism. Glenn says these measures, along with cutbacks to economic development and 24 days of furloughs for city employees, would save the city more than $8.2 million.

He would also reduce cuts to police and fire by $3 million; give parks and recreation another $1 million, with half for parks maintenance and half to keep Pioneers Museum open (with El Paso County chipping in the rest) and restore some recreation programs; and give transit about $577,000 to continue some services. This wouldn't solve the crisis, but it might soften the blow to core services.

Glenn also wants the city to extend its partnership with the county (think regional parks, historic landmarks, and fire and transit districts that resemble mini-governments with the ability to tax). He notes that parks and transit "automatically get cannibalized in tough economic times." That's why they need to be separate, he says. Lots of people agree with Glenn on this one, including parks and transit activists.

The Councilor adds that the impetus for his ideas came from the city's Sustainability Committee, which offered a long list of potential new revenue sources in its report last summer.

"What I want to do is pick up where the Sustainability Committee left off," Glenn says. "All these recommendations came out of that effort."

stanley@csindy.com & zubeck@csindy.com

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