By Anya Kaats.
A renewed look at finances has brought changes to Crestone’s 2024 budget. While it may take Crestone time to work its way out of a previous mess it marks a step in the right direction. Staffing is another matter altogether.
“It took us several years to get into this mess, and it’s going to take us at least a couple of years to find our way out of it and recreate integrity,” Trustee Adam Kinney remarked at last month’s Special Meeting to discuss the proposed budget. The “mess” Kinney is referring to involves a complex series of missteps, setbacks, and controversies faced by the board concerning budgetary decisions, staffing, and overall structural organization in recent years.
In December, the Crestone Board of Trustees voted unanimously to approve a proposed budget for 2024. The budget was created by a committee comprised of board members and town residents.
It features a substantial reduction in operating expenses compared to 2022 and 2023, and a temporary solution for handling excess sales tax revenue received by the town from online purchases made by Baca Grande residents.
The 2022 and 2023 budgets featured significant increases in operating expenses from years prior, mainly as a result of increased sales tax revenue received by the Town from online purchases. In 2019, Colorado passed a marketplace facilitator law that required online retailers to collect sales tax from customers and remit the revenue to the State. Some major online retailers, including Amazon and Airbnb, have been calculating sales incorrectly, overcharging Baca Grande residents by 3.5 percent. This erroneously-charged sales tax has been collected by the Department of Revenue and sent to the Town of Crestone, where the excess funds had been primarily used to increase salaries for staff and contracted employees.
In her 2022 budget recommendation to the board, Interim Administrator Leslie Klusmire, who resigned suddenly in December 2022, attributed the increased sales tax revenue to the pandemic. “During the last two pandemic years—and contrary to initial projections—the Town experienced robust sales tax revenue growth, partially due to the addition of taxes from online purchasing.” While the pandemic did increase online purchases nationwide, Crestone’s increase in sales tax revenue was mostly the result of the erroneous sales tax charged to residents of the Baca Grande. After multiple complaints from town residents, extensive reporting in The Crestone Eagle and locally-written The Grimes Report, and an official acknowledgement of the error from the Colorado Department of Revenue, the Crestone Board of Trustees are bracing for a significant reduction in sales tax revenue.
As a response, the town plans to place $140,000 of sales tax revenue from 2024 into a savings account. “The funds can be used for community service projects or whatever seems most appropriate, but we are documenting that anything over the projected revenue goes into savings,” trustee Kinney explained, adding that “$140,000 is not enough, and that [the board] needs to plan on decreasing revenue by even more, but I think it is a huge gesture, and a move in the right direction.”
Personnel woes
Since the vast majority of additional sales tax revenue went to fund salary increases as per Klusmire’s recommendation, the board is cutting their total personnel expenses by half in 2024. In 2023, $437,188 was spent on personnel, and in the 2024 budget that number has been reduced to $204,227. “I just don’t think that’s realistic,” Trustee Kizzen Laki remarked in last month’s meeting. “If it takes us this many hours, it takes us this many hours, unless you want to close the town hall earlier and make it less available to the public,” she added, citing concerns that lowering salaries would mean losing valuable, qualified employees.
The Town is severely understaffed as it is and has gone without a treasurer or bookkeeper for the past several months. Much of the excess workload has been placed on the shoulders of Town Clerk Scott Ehresman, who has repeatedly expressed discontent and overwhelm. “I’m not getting the support that I need to make this work, and when things go wrong, the blame is being put on me. I want to do a good job, but I’m not willing to be in a position where I’m set up to fail.” Ehresman told the board that he plans to resign after the January meeting if the staffing issue isn’t remedied.
In a heated statement, Trustee Kim Martinez explained that the Town will continue to struggle to retain employees until the larger structural issues are solved. “I’ve been on this board just three and a half years; in the last two years, we have lost 15 qualified employees,” she lamented. The 2024 budget also addresses concerns about redundancy and a lack of efficiency with how the budget has been organized in years prior. “I’d like to commend Adam and some citizens of the community for all the work they’ve done. You made [the budget] so that even an idiot can understand it,” Trustee Martinez said.
While the board is making gestures to confront and resolve these varied challenges, they face an uphill battle amidst significant budgetary reductions, poor morale, and ongoing accusations of malfeasance from the community.
The Board’s next Regular Meeting is set for Thursday, Jan. 11 at 9:30 a.m., and their “Here to Listen” session will take place on Saturday, Jan. 6 at 10 a.m. at the Cloud Station.