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As the Los Alamos County Council debated the current and anticipated budget crunch during its Tuesday meeting, councilors made it clear that deferring capital improvement projects was preferable to lowering standards for customer service through draconian cutbacks or raising taxes.
County staff recommended deferring $10 million in capital projects spending for up to five years.
Council voted to defer up to $12.5 million for four years.
“Essential services are what a government is all about,” Councilor Rick Reiss said. “We need roads. We need a library, but the library may not need to be open 24/7 with big flashing lights.
“But there are essential services that no private entity is going to provide. We’ve got to do certain things, like pick up the trash. And if we’ve got money to pick up the trash and that’s all the money we have, then we’re going to pick up the trash. If we have money to build an addition onto a pool, that’s not an essential service and if we don’t have any money, then we can’t build it.”
Councilor David Izraelevitz noted that building all these projects would have been a multi-year process in any case. That will be especially true with reduced staffing levels affecting many county services (read more in Friday’s Los Alamos Monitor).
However, Izraelevitz was one of the councilors that argued for a shorter deferral period.
“I’m concerned about even the five years, because I feel we’ve made a commitment as much as we can to build a lot of these things, so I would propose that we make it four years,” Izraelevitz said.
He also asked that directions to staff include the phrase “CIP projects should be pursued, including related voter approval.”
Councilor Kristin Henderson also argued for a shorter timeframe.
“I would rather leave it at five and get a feel from the community about how seriously they want these things,” Henderson said. “Are they willing to pay for it separately, or use part of what we have in the CIP and part in other revenue, rather than say we’re not going to do it for 10 years? Because it does make a difference in people’s lives.”
Councilor Pete Sheehey floated the possibility of deferring up to $15 million in CIP spending for as long as 10 years.
“I don’t have strong feelings on the time limit. However, the previously suggested limit of up to $10 million is too low, and I would feel better about a limit of $15 million,” Sheehey said. “$10 million may be sufficient, but until we put it into the spreadsheets we don’t know that. So I would not want to constrain it overly. Remember, there’s some $47 million in that capital projects budget this year to spend, so $15 million deferred from that or from additional funds put into it is not that great an amount.”
Sheehey also suggested directing staff to simply “defer some projects” in order to give maximum flexibility. County Administrator Harry Burgess opposed that suggestion.
“I cannot communicate to the various departments the magnitude of the cuts to look for unless I have a target of some sort,” Burgess said.
Deferring projects not only leaves more money in the general fund for the immediate future, it also defers operating and maintenance costs for the new facilities, which will significantly impact the county’s budget. Staff anticipates an additional $740,000 a year in operating expenses once every project approved in May 2012 is built.
Staff also recommended that council consider “financing new facilities with new revenues and new debt.” Council Chair Geoff Rodgers nearly struck this from the options due to some strong opposition to taking on new debt. However, other councilors recommended at least keeping the option on the table.
“I think sometimes its good, rather than to spend all your cash, to finance some things,” Henderson said. “I know it’s more complicated, but I don’t think it should be taken off the table right now.”
“I agree with that wholeheartedly. New debt requires that scope of public meetings, so it provides that flexibility to accelerate some projects or rearrange some projects, and set our priorities based on public input,” Izraelevitz said.
Deputy County Administrator/Chief Financial Officer Steven Lynne also recommended at least keeping the option open.
“It’s fairly common in local government finance for new facilities to be funded with voter approved debt. So it’s just an alternative that follows a little more traditional government financing,” Lynne said.
Rodgers asked if staff anticipated using General Obligation bonds for particular projects or a more generalized “quality of life tax” such as council has discussed in the past, which would create a fund earmarked for CIP projects. Lynne responded that specific projects would be identified and subject to a vote. Councilor Frances Berting opposed that idea.
“I think our experience with the leisure pool indicates that putting something to a GO bond vote is probably a sure way of killing the project, so I think we might as well not go that way,” Berting said.
A GO bond measure for building a leisure pool was defeated in 2011.
Several councilors felt it was important for citizens to see movement on CIP projects.
“I think even if we do curtail some projects in the immediate future and move them out to future years that we will be able to show momentum, and I think it will be obvious to our citizens that things are still being built,” Reiss said.
The Feb. 19 council meeting, originally scheduled as a work session in White Rock, has been changed to a regular session in council chambers to discuss prioritization of approved CIP projects.