More than 30 projects planned by the city of Durango in the 2020 budget have been deferred or scaled back, including the pedestrian bridge over the Animas River at 32nd Street, repairs to the recreation center, road repairs and fixes to sewage lift stations.
The cuts come as the city grapples with budget cuts to deal with lost sales-tax revenue because of required business closures to deal with the COVID-19 pandemic.
In total, more than $6 million in projects were delayed or scaled back Tuesday night by Durango City Council, which held a virtual meeting to avoid a large gathering and to maintain social-distancing requirements in place in Colorado because of the coronavirus outbreak.
“This is the first step in what I expect will be a number of steps likely to come before council,” said Interim City Manager Amber Blake about actions needed to deal with reduced sales taxes and fees caused by the reduction in commerce.
Councilor Kim Baxter conducted her own analysis of the budget assuming a 30% and a 50% loss in revenue, and her projections showed the city would be unable to meet bond payments for the rehabilitation of Florida Road in 2010 and the construction of the new Durango Public Library in 2008.
Baxter said she was unsure what revenue reductions the city will ultimately face or what additional capital expenditures will need to be cut, but she proposed a work session to begin assessing the scope of the problem.
“This will be a situation that changes constantly, but I feel we will need to have a conversation about it sooner rather than later,” she said.
According to numbers provided to city councilors, city staff anticipates reductions in monthly sales tax revenues ranging anywhere from 20% to 44% in the months from March to December.
The month with the fewest losses is expected to be March, with a 20% decline compared with the same month in 2019. Currently, the city is projecting December to be the month with the largest sales tax decline, with a loss of 44%.
The average monthly loss in sales tax revenues is currently pegged at 29%.
Councilor Dean Brookie said some assistance to backfill lost tax revenues will come through the Coronavirus Aid, Relief and Economic Security Act, the $2.2 trillion relief and stimulus bill signed by President Donald Trump on March 27.
The CARES Act, Brookie said, provides $2.3 billion in aid for rural communities in Colorado, but how it will be disbursed and how much will come to Durango has not yet been determined.
“With all the things in motion, we need to look to any opportunities that are available to us. I think in three weeks we’ll know more about the impacts and what the benefits we will be eligible for,” he said.
Mayor Melissa Youssef agreed with Blake that additional cuts will likely be needed.
“Budget documents indicate that more cuts will come, but this is a start. It’s a moving target, and things are changing by the day, sometimes by the hour,” she said.
parmijo@durangoherald.com