BASALT - Employees of Basalt town government might get a 3 percent cost-of-living increase in pay in 2013, but Town Council members appear poised to sharpen their cleavers to reduce projected deficit spending.
The town staff presented a preliminary budget this week that includes spending $65,265.54 on raises for the government's 32 employees. In addition, two patrol officers at the Police Department were recommended for promotions that would add $7,154.
The council hasn't made any budget decisions yet. Several work sessions will take place this fall before a budget is adopted. Council members were trying to assess how much deficit spending they can stomach at their first work session.
"Different people here have different ideas on how to spend their money - or their neighbors' money because that's what we're doing here," Mayor Jacque Whitsitt said.
Bill Kane, who retired as town manager but is working part time via a contract during the search for his successor, asked the council if it could accept deficit spending this year and, if so, at what level. There are short-term expenses, such as the hiring of a special projects manager to lead land-use reviews, which will require the town to draw from its $3.1 million general-fund reserve, he said.
There also are roughly $223,000 in personnel, program and capital requests from department heads that are above the revenue projections, according to town Finance Director Judi Tippetts. That doesn't include the Basalt Chamber of Commerce's request for $170,000, she said.
The council members agreed to go through those requests in detail at later sessions.
Kane and Tippetts outlined a budget proposal that anticipates modest increases in sales tax revenue next year despite the recent opening of Whole Foods Market. The staff's proposal foresees only a 3 percent increase in sales tax revenues.
General-fund sales tax revenues are projected to increase to $2.73 million from $2.65 million. That $79,500 increase is 3 percent.
The 1 percent sales tax dedicated to open space purchases is projected to increase by nearly $32,000 to $1.12 million.
Tippetts said she was purposely conservative with the projection because she would rather come to the board later in 2013 and say there were excess revenues than budget an increase and not see it materialize.
Whole Foods Market opened in mid-August and is drawing shoppers from Aspen and throughout the Roaring Fork Valley. While that will produce new revenues for the town, Whole Foods also is expected to cannibalize some sales from Basalt's other supermarkets.
Kane said Basalt's economy is still feeling the effects of the recession despite encouraging signs such as the opening of Whole Foods.
"The lesson of the last five years is we're not immune to anything," Kane said. "There are lots of reasons to be cautious."
Basalt's government spending debate is a microcosm of the national debate on whether there should be investment in the community during a tough time or whether spending should be slashed, Kane said. He recommended that the board make investments that will boost Basalt's long-term sustainability.
Councilwoman Anne Freedman said Basalt's deficit spending isn't the same as the federal government's deficit spending. The town will draw from its reserves, she said. It won't borrow money and pay interest the way the federal government does, she said.
The town is looking at a general-fund budget of about $6.73 million, but that figure is likely to change as the council goes through the process. In the opening discussion, various council members made comments about eliminating or paring down some of the wish-list spending. The 3 percent raise for town employees appeared to have broad support, though suggestions were made to switch to a merit-based raise system. Town workers got a 3 percent raise last year, as well.