Redefining a “good year”

Mammoth’s Council will consider “new normal” in budget forecasts.

Town Manager Dan Holler presented an updated Fiscal Year 2014-15 budget to Councilmembers at Wednesday’s regular meeting in Suite Z. His initial caveat: “The budget is a good road map, but it’s usually out of date the day you adopt it,” he said.

Holler began by reporting that most restricted funds in the total $18.7 million budget are performing well. “Nothing is jumping out as, ‘Here’s a warning, we’re going to be substantially short,’” he said.

But, given this is the fourth consecutive drought year, the new budget does project a drop in Transient Occupancy Tax (TOT) of about $440,000. TOT accounts for about 60 percent of Town General Fund revenue, Holler said.

The good news: property tax, which accounts for about 16 percent of that revenue, is projected to increase by about $126,000. However, two major property reassessments, one for Mammoth Mountain Ski Area, and one for Ormat, haven’t been settled yet.

“We don’t have timeline for when that will be done, but those are some of the unknowns that may hit property tax,” Holler said.

Sales tax is also expected to increase by about $84,000. Altogether, General Fund revenue has a projected deficit of about $174,600.

“With some current staff vacancies, I think we can address $100,000 of that,” Holler said. He added that staff projects about $70,000 savings in operations and materials, and “a little bit of fuel savings … I think we can balance out the shortfall, and do so without going into the Reserve [for Economic Uncertainty], which I would not recommend doing at this point in time,” he said.

The Town’s Reserve currently holds a little over $3 million.

Meanwhile, also unsurprisingly, Holler said staff projects the costs of employee benefits will rise from $1.45 million in FY 13-14 to $2.07 million in FY 14-15.

“That’s primarily driven by a bump in PERS [Public Employees Retirement System] and a bump in Workers Comp,” Holler explained. “Next year’s going to be more; we’re going to see a significant hike in PERS.”

Finally, Holler said staff is discussing creating a ‘new normal’ for skier visits, which could help budget projections. Traditionally, a “good year” meant 1.1-1.2 million skier visits. However, Mammoth Mountain Ski Area (MMSA) reported about $850,000 skier visits between MMSA and June Mountain last year, and is projecting about $950,000 this year.

“One of the questions for tonight is … is that ‘new norm’ going to be lower, and our summer season is going to be growing, or do we continue to budget for a [1.1-1.2 million skier visit] ‘good year?’” Holler asked.

Councilmembers John Wentworth and Shields Richardson voiced their support for creating a ‘new normal’ good year to help budget projections.

“I think the positive about this is, if it is the new norm, we’re going to have to make some decisions about how to get people up here,” Richardson said. “What’s going to be interesting to me is what comes in for January and February.”