In a comprehensive joint meeting on Tuesday, Steamboat Springs City Council and Routt County commissioners tackled the mounting impacts of shrinking federal funds, provided updates on the Core Trail and West Steamboat transportation projects, and delved into details of the newly approved Mountain Rail access deal.

Commissioner Angelica Salinas opened the meeting with a sobering overview of the fiscal landscape due to drastic changes and lingering uncertainties within the federal administration.

On Friday, the White House released its “skinny budget,” which reduces non-defense discretionary spending by $163 billion, increases defense spending by 13% and increases Homeland Security appropriations by nearly 65%. 

“Right now, Colorado’s budget has $1.2 billion in cuts this year despite being a $44 billion budget,” said Salinas, who warned that expiring pandemic aid and shifting federal priorities are diminishing grant pools, particularly for health, housing and infrastructure.

“Local governments are going to be asked to do more with less,” she continued. “Cuts are hitting health and human services, infrastructure and housing programs pretty hard, and usually it’s local governments who are left to pick up the slack when these types of changes and cuts happen on a federal and state level.”

Salinas noted that 35% of Routt County’s revenue comes from federal and state sources, with key departments like human services, as well as road and bridge, heavily reliant on outside funding. The county is also already feeling the squeeze from rebidding pressures and tariff-driven vendor cost increases. 

“We’re having to rebid for things that previously were open, and there’s just a lot of uncertainty when it comes to grant funding,” Salinas said. “Ongoing inflation and tariffs are really driving up expenses for roads and infrastructure.”

Looking ahead, Salinas cautioned that “slowing state and federal support are really going to strain core services,” and that local governments may be forced to choose between either raising local revenues or reducing essential services. 

“There’s going to be a large reliance on community nonprofits and the need for philanthropy is going to be increased with communities like ours, especially rural communities,” she warned.

Commissioner Tim Redmond, recently reappointed to the state’s Energy Impact Board, described a dramatic downturn in severance-tax revenues that fund local projects. “There was a one-time repayment to the oil and gas industry of $110 million that brought the standing funds down from $111.5 million to $1.5 million,” Redmond explained. “There may be no cycles in 2026.”

He warned that the Energy/Mineral Impact Assistance Fund, which has “saved several small communities” that he believes otherwise “would not even exist in the state of Colorado anymore,” could be at risk. When members of the Energy Impact Board asked Gov. Jared Polis about the threats to the fund at an event three years ago, Redmond recalled Polis telling the board, “Sometimes, things just go away.”

“I do believe that this could be the beginning of the end of the (program),” said Redmond at the joint meeting. “I would encourage us all, especially being in Tier I-impacted communities, to raise your voice and advocate for the Energy Impact Mineral Assistance Fund.”

Commissioners and council members also discussed the state’s limited ability to raise revenues due to Taxpayers Bill of Rights (TABOR) restrictions and a political climate resistant to new fees. 

“There have been multiple discussions about changing the revenue model and they typically don’t result in much,” Commissioner Sonja Macys said. “A lot of things this year attempted to piecemeal a fee here, a fee there, this project, this problem, but consequently there has been no actual solution being discussed.”

Council members and county commissioners then reviewed the continuing challenges facing the regional dispatch center, which is struggling with staffing and operational demands. 

Routt County Finance Director Dan Strnad gave a brief presentation, noting that 95% of dispatch centers in Colorado use a fee-for-service model, and that the county is considering shifting from property tax funding to a dispatch fee charged to user agencies based on call volume.

Assistant County Manager Melina Bricker also provided an update on the “Move US-40 Forward” project, aimed at improving the hazardous intersection at U.S. Highway 40 and Brandon Circle, an area heavily trafficked by students and families due to its proximity to Sleeping Giant School and the Steamboat Montessori Charter School. 

“We have submitted for a variety of grants, we are still waiting to hear back on quite a few,” said Bricker, who added that the county has already received several rejections. “A lot of the metrics that are considered standard for assessing need in a community are unfairly biased toward highly populated areas … so we need to help redefine how we understand need and make it hyperlocal.”

“At our transportation planning region, which is a five-county region, we’ve all agreed that (U.S. 40) is in desperate need of help,” said Macys. “So we’re really happy to have the other counties on board with us. They think that it’s a safety issue not just for our tiny neighborhood and our local community, but for the broader state interest.”

On the Core Trail extension, Steamboat Springs Public Works Director Jon Snyder informed council members and the commissioners that the project is moving forward with design and funding in place, but property acquisition remains a hurdle. 

“The remaining property to be acquired is the KOA campground,” said Snyder. “We have agreed in principle to a purchase price. The outstanding item left is they want to couple that property acquisition with council approval of more campsites developed on a city-owned parcel adjacent to KOA, which we would convey as part of the deal. So more to come on that.”

“We are still optimistic that we can put this project out to bid in late June, early July, which would enable us to start construction this fall, with the majority of construction happening next summer,” Snyder added.

Commissioner Macys then provided an in-depth look at the newly approved Moffat Tunnel lease and Mountain Rail access agreement, both signed for 25 years. 

“Union Pacific (had) benefited from a pretty sweetheart deal of a 99-year lease that had a lot of unfavorable conditions for the state, including a very small payment of $12,000 a year,” Macys said.

That changed with the new agreement, signed this week. 

“The state has now been provided with 506,000 rail miles for free. Those miles can be used in a flexible fashion,” Macys explained. “There’s a long pattern which is from Craig to Denver, which we kind of call the ski train, and then we have the commuter pattern, which is a short pattern – Oak Creek to Steamboat Springs, Hayden, Craig.”

“We basically got every single thing we wanted from this,” said Macys. 

Macys highlighted that the agreement allows the commuter pattern to be built out prior to the long pattern. She also noted an unprecedented provision: passenger rail gets priority over freight. “That’s pretty tremendous,” said Macys.

Unlike the Front Range Passenger Rail, the Mountain Rail project is not dependent on federal funding. “So many things are at risk, obviously,” said Macys. “But that one is not.”

Both council members and the county commissioners agreed to keep each other updated as the federal landscape continues to shift and creates trickle-down effects on local communities. 

“This is the beginning of the conversation,” said Council President Gail Garey. “We’ll have to continue to keep each other posted in terms of what’s happening and how we move forward.”