Caption: Variations of proposed and the actual budget that was filed with the State. Added are by the editor to clarify dated versions. photo by Matt Lit
By Matt Lit, managing editor
Residents of Crestone are awaiting a promised amended 2023 budget from the Town board.
An auditor’s report is expected to be presented at the Town’s next regular meeting, Sept. 11.
An August 21 meeting to discuss the 2023 budget saw no advancement on that goal. That meeting erupted into an angry shouting match, forcing Mayor Kairina Danforth to abruptly end it before any work on the budget could be accomplished. More than 20 people attended the meeting.
The meeting started with public comments that ended with resident and business owner Elaine Johnson presenting the flaws she has found in the original 2023 budget.
The 2023 budget was approved last December to meet a required state deadline, with the promise it would produce an amended version. The Colorado Department of Labor Affairs website shows Crestone’s last budget filing as Dec. 15, 2022.
The Town has had a contentious time with this budget and was forced to severely cut revenue projections for the fiscal year as a result of staffing and other issues.
Upon reviewing the new 2023 budget, citizens Elaine Johnson and Warren Stephen found numerous issues with the numbers, including dollar figures from unrealized grants. Those unapplied-for grants accounted for upwards of $2 million in the original version of the budget.
In a town document titled, “Notes to 2023 Supplemental Budgets,” the Town stated that, “The reduction is primarily the $1,515,003 in grants that were not and will not be applied for.”
Why those unapplied-for grant dollar figures were even in the initial version of the 2023 budget remains unanswered.
General fund revenues were adjusted down to $585,055 from a previously approved total of $2,084,203— an almost 72% cut. Additionally, the Water and Sewer Proprietary Fund was slashed from $737,520 to only $109,320. Personnel costs were also adjusted “to reflect changes in job descriptions” and “combine Water and Sewer with a public works position.”
A town meeting in September of 2022 was the “tip off” that something wasn’t quite right, said Johnson, co-owner of the Mercantile. After reviewing the presented budget, Johnson and Stephen began digging through the numbers and finding discrepancies. Their efforts to bring these issues to the Town have been met coolly. “They were nice about it in the beginning,” said Johnson, “but that changed.”
According to Stephen some board members became defensive, and he admitted, “I’ve been a part of that.” In a larger view, he said, the public is partly responsible for not “bird dogging” the board. “Everybody shares in the blame. It’s not just the board. They are good people,” he added.
Where the Town went so wrong with this budget is hotly contested.
One seemingly major factor points to former Interim Town Administrator, Leslie Klusmire. Hired by the town in 2021 as a contract employee, Klusmire was responsible for instituting a number of changes, including increased salaries and a water and sewer rate increase.
Klusmire resigned from her contracted interim position in December 2022, leaving the Town struggling to deal with the changes she had initiated. One of major changes she pushed for related to water and sewer funding which previously held an Enterprise Fund status, meaning it could operate—on some levels related to funding—without voter approval.
In 2022, Crestone voters approved a .5% sales tax increase dedicated to water and sewer. That change put the total funding percentage from taxation for water and sewer over 50% percent and the Town lost that status.
In a letter Klusmire drafted in November of 2021, “The general fund can subsidize enterprise funds, but if the subsidy comes from taxes, it cannot exceed 10% of the total revenue of the enterprise fund. In our case, the sales tax is quite a bit more than that—almost 50% percent of each fund’s revenues.” The Town responded by moving all but 10% of the sales tax revenue from the water and sewer fund into the capital improvements fund. At the next municipal election citizens voted in favor of that funding move.
Moving forward, in a June 13, 2022 letter to the board, Klusmire outlined “options and recommendations for water and sewer rates to cover operation and maintenance costs.” The 31-page report detailed options for water and sewer increases. The Town opted for rate increases, settling for a $12-per-month increase.
One other option as yet to be enacted could include making residents on their own well systems to pay a monthly bill whether or not they are connected to the Town’s water lines.
The water and sewer funding is only one of the issues facing Crestone in its attempts to produce an amended 2023 budget. Preceding budget recommendations and one from March of this year appear to show unaccountable variations in the figures.
One example is the starting balance of the general fund. The figure entered in the budget filed with the state is $455,616. In the preceding budget version on Dec. 7, 2022, that figure is $101,487, and another, dated Dec. 2, 2022, lists it at $537,787. And another document from March 27, 2023 shows that figure again lowered to $101,487.
Scott Ehresman, interim town administrator, said he believes the $101,487 figure is in error.
Mayor Kairina Danforth, in response to questions emailed to her, stated that all budgets are prepared by the town treasurer and submitted to the board.
“The Crestone Board of Trustees has had multiple meetings and sessions to discuss the supplemental budget,” said Danforth. “The board has sought public comment at multiple stages and is continuing to use the information gained in these meetings to develop the most accurate supplemental budget.
“It is anticipated that the board will vote to adopt the supplemental budget after public hearing revisions are made as necessary,” Danforth added. “Any interested elector may file objections to the budget prior to adoption. The board is actively working to present and adopt a supplemental budget.”