January 31, 2022
To the Honorable Mayor, City Council and Citizens:
The budget is designed as a management guide, an executive planning document, and a financial report. It is based on the efforts and input from citizens, City Council and City staff. By working together we develop a balanced budget that plans, sets objectives for the coming year, and defines the purposes and resources to achieve those objectives.
It gives me great pleasure to present the Fiscal Year 2022 Adopted Budget. This budget continues to maintain our mission, which is providing efficient city services, effectively maintaining city assets, managing growth, while remaining accountable, ethical, fiscally responsible, and collaborating with regional partners to improve the quality of life for our entire community. The development of a budget always has assumptions and a certain level of uncertainty.
The 2022 budget was guided by the City’s mission, vision, values, goals and coordinated with the strategic plan that fosters a culture of innovation and transparency.
Financial Excellence and Transparency Highlights
The City of Durango’s strong tourism economy, coupled with conservative budgeting in 2021, mitigated the financial impacts from the COVID-19 pandemic. Sales tax revenue rebounded significantly from 2020, allowing the City to meet its fund balance policy obligations and provide a mid-year cost of living adjustment to employees.
The 2022 budget is prepared with the assumption that sales tax revenue will increase 22.4% compared to the 2021 budget and a conservative 1.3% decrease over estimated 2021 actuals. While conservative and based on 5-year actuals, the 2022 budget focuses on enhanced services returning to pre-pandemic levels. Further aligned with the strategic plan, the 2022 budget will provide a 5% pay increase to City staff. It will also begin to address compression issues that had occurred over time and resulted in pay discrepancies between new employees and employees with tenure. The compression issues will take a few years to resolve completely.
The 2022 budget also includes the beginning of a multi-year strategy to make substantial reductions on interfund transfers to become financially sustainable. As outlined in the strategic plan, the budget includes a reduction of the 2019 Sales Tax operating transfer to general fund for streets maintenance by 33%. Additionally, the cost allocation from the City’s enterprise funds to the general fund was reduced by more than $900,000 to reflect the costs of internal services more accurately.
The 2022 budget was prepared using OpenGov, which was a goal for completion during the 2021 budget process. OpenGov will offer 24/7 transparency to the citizens of Durango by providing them the ability to view up-to-date budget and financial data online.
Enhanced Livability and Sense of Place Highlights
In 2022 the budget continues to make progress on enhancing our livability and sense of place. The City of Durango will maintain our commitment to keep our community safe by adding critical positions in our police and 911 communication departments. Additionally, in 2022 we have allocated funding to explore the possibility of forming a library district. This district could provide a stable source of revenue which would allow the library to maintain current service levels and a possible expansion of service to the community.
Finally, we have included funding to accomplish the strategic objective to develop a brand for City of Durango that identifies an iconic feature.
Affordability & Economic Opportunity Highlights
During 2020 and 2021, many members of the community’s workforce suffered economic hardship because of COVID closures. While those industries have reopened, COVID also impacted the housing market, where both rental and purchase prices steadily increased, making it extremely difficult for the community’s workforce to find housing that is affordable. To address the challenges that our community is facing, the 2022 Budget reflects an organizational restructuring in Community Development that created a Housing Division which was funded by the American Rescue Plan Act. The Housing Division will provide an elevated and active full-time focus on economic opportunity and affordability in housing.
Diversity Equity and Inclusion Highlights
The City of Durango continues its efforts to become a community that is diverse and inclusive for everyone. The 2022 budget continues the organization’s investment in translation services across several departments in the City. To serve as a model for the community the organization will undergo diversity, equity, and inclusion training and policy development ensuring that our workforce understands the needs of our entire community.
Environmental and Social Sustainability Highlights
In 2022, the City will enter into public-private partnership to accelerate local organic waste diversion through curbside compost collection, outreach and education. To ensure our sustainability efforts are valued by the community, the 2022 budget encompasses funding to conduct an external communications satisfaction survey.
Ensure Effective Infrastructure Network Highlights
A goal of 2021 has been accomplished in the budget with the creation of a Capital Projects division to provide accountability and a holistic approach to the management of the City’s capital improvement program. The goal for the division is to provide cost reduction through on-time project delivery and cost efficiencies.
The Durango-La Plata County Airport experienced record-breaking travel numbers in 2021. To continue to keep up with the increased demand, the airport will complete many large infrastructure projects. This will allow our community to continue to thrive economically from leisure and business travel.
Durango Transit is also expanding service by restoring service to the Highway 160 routes.
I would like to say thank you to our City staff and City Council for the time and effort put into the budget process every year and for providing easy access for residents to access important financial information. We will make strides to engage with the community, listen to residents, and secure a stable and successful future.