Aspen eyes deeper ’09 budget cuts |

Aspen eyes deeper ’09 budget cuts

ASPEN ” Sensing continued economic decline, the Aspen city government is proposing to shave up to an additional $2 million from this year’s budget.

City Manager Steve Barwick announced Friday that in addition to more than $1 million in budget cuts to the city’s general fund, a salary freeze for all city employees will be put into place effective Feb. 9. The freeze is tentatively set to be in effect for 12 months, and those who received raises in January on their anniversary dates will not get raises next year.

“While the city’s budget forecast is not so bad that we absolutely must freeze wages right now, the trends are ominous,” Barwick said after a series of meetings with employees on Friday. “It is prudent to act now rather than later.”

The salary freezes are expected to save the city roughly $425,000 in the general fund and another $727,000 across other departments that are paid for out of the general fund, such as the Wheeler Opera House and utilities.

That’s in addition to roughly $1 million in budget cuts to the general fund proposed by department heads, including the summer closure of the Aspen Ice Garden and a reduction in hours at the Aspen Recreation Center.

Just as bleak are the projections for consumption tax revenue for 2009, which is estimated to drop 11 percent. Barwick expects January and February retail sales revenue to drop 15 percent. March looks worse.

“March is looking really bad right now,” he said, adding that tourists are booking last-minute reservations in hopes of realizing discounts, making it difficult for hotel operators to predict and plan for future staffing levels.

Barwick said the one bright spot in Aspen’s economy is that timeshares appear to be bolstering bookings because owners already have paid for their vacation stays.

He noted that not all retail sales account for tourist dollars, but spending from locals also is expected to decrease.

“As people get laid off and furloughed, they will spend less,” Barwick said.

In the fall, when city financiers proposed the 2009 budget and the council adopted it, sales tax revenue was predicted to grow by 1 percent. A month later, that projection was reduced to zero percent. Department heads at the time were asked to shave 10 percent from their operating budgets.

The 2009 budget adopted by the council in November included nearly $102.3 million in expenditures, which was 2.35 percent less than 2008. Most of that came from a reduction in capital spending, which amounted to $4.1 million in projects planned by about a dozen departments in City Hall.

“We knew it was going to get worse … but then we started acting differently,” Barwick said of the budget adjustments, which will continue as city financiers and elected officials monitor the economy.

The city government also is in a hiring freeze in 2009, with the exception of the police department, where there two positions are open, and a couple of departments that are funded separately from the general fund.

Open positions currently frozen include the sales tax clerk, the business process analyst, the senior project manager in the engineering department, the asset management business manager and a zoning enforcement officer. A variety of temporary, or seasonal, positions also have been frozen and reduced.

It’s expected that layoffs will occur in the planning, building and engineering departments, which were expanded in the past several years to accommodate the increased workload associated with high levels of development.

Officials estimate that construction activity this year will come to a grinding halt ” planning and building fees are projected to be 50 percent lower and engineering fees 25 percent lower. Additionally, recreation fees are projected to be down 5 percent.

“Those at risk are those employees who were recently hired in the planning and engineering departments,” Barwick said, adding staff levels must meet workloads that are expected to be reduced.

The layoffs are estimated to save the city nearly $300,000 in salaries, including $187,000 from the building department and $130,000 out of the planning department.

The payroll adjustments are a departure from officials’ plans in the fall to give city employees a 3 percent raise this year.

Employee benefits, like end-of-the-year bonuses, remain intact, Barwick said.

Total salaries budgeted in 2009 account for nearly $20 million for permanent employees, which doesn’t include the hiring and salary freezes. Salaries for temporary employees in 2009 account for about $1.7 million.

Savings also will be realized in isolated services like the city Christmas party, the community picnic and the elimination of broadcasting some City Council work sessions.

Barwick said the budget cuts attempt to avoid hitting essential public services, and are instead focused on eliminating staff training and the use of outside consultants, and reducing in-house, administrative operations.

Based on conversations with council members, much of the planning staff will remain so they can work on municipal projects like the Aspen Area Community Plan update, and changes to the historic preservation program and the land-use code.

To prepare for a worst-case scenario, the city years ago adopted a policy of keeping enough cash on hand in the general fund to keep city government running for 90 days if revenue sources dry up, and each department in City Hall has a cash reserve as well.

The Aspen City Council will consider the proposed budget cuts at a meeting at 5 p.m. on Tuesday in Council Chambers. The meeting will be streamed live at and will be broadcast live on CGTV, Channel 11.

Barwick said the economic turmoil around the world is much more than a recession.

“This is a not a normal recession; this is a reset of the economy,” he said, adding major shifts in the housing, auto and banking industries are strong indicators that it’s only going to get worse.

“The world will be different three years from now so we are just going to have to keep adapting.”

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