Basalt looks at worker salary freeze for third straight year
BASALT – The Basalt town government is looking at a salary freeze for its workers for a third straight year because its revenues and the midvalley economy aren’t expected to improve in 2011.
The government must do some “trimming and fine-tuning” but the budget is generally in decent shape because of previous tough cuts, Town Manager Bill Kane told the Town Council on Tuesday night. The trimming will include an extension of the salary freeze, a suspension of a health and wellness benefit for the second straight year and a continued suspension of a “buy back” of sick days. The town had offered one day of pay for each three days of unused sick leave that employees turned in at year’s end.
Town staff recommended ending a furlough program in 2011. Employees took six mandatory, unpaid furlough days last year. Kane said they could be reinstituted if the council felt they were necessary while working through the budget process this fall.
It was unclear Tuesday night if the council will rely on layoffs to cut expenses. The board recessed to a closed session during their budget work session to discuss all options with Kane and Judi Tippetts, town finance director.
In its preliminary planning, Basalt is looking at general fund budget expenditures of $5.1 million next year. That is down from what’s anticipated to be expenditures of nearly $6 million this year.
General fund revenues are anticipated to drop to $5.4 million in 2011 from $5.6 million this year.
Kane said real estate development and sales are expected to remain quiet in the midvalley in 2011. The town’s sales tax revenues are projected to be flat.
A year ago, town officials expected 2010 to be a year of “transition,” with the budget and the economy turning around in 2011, Kane noted. That’s not to be, he said.
He and Tippetts interviewed numerous business leaders and government officials in the Roaring Fork and Eagle valleys to form assumptions about the economy in 2011. In the public sector, they learned Carbondale and Glenwood Springs expect no gain in sales tax revenues next year. In the private sector, residential property values in the Basalt area are expected to plummet 30 percent in the next appraisal period, which helps determine tax rates.
Basalt has been hit hard by the loss of jobs in construction, retail and other fields upvalley. Many people that had good jobs in Aspen and Snowmass Village lived in the Basalt area. Now they are struggling with their mortgages. Kane said he has a hunch that the Basalt-area population has dropped 15 percent from its peak earlier this decade, based on sales tax figures and other indicators.
Despite the tough times, town staff recommended passing a balanced budget, rather than dipping into reserves to make numbers work. The town aims to maintain about $2.4 million in general fund reserves as an insurance policy in case revenues fall even more than expected in 2011, Kane said.
The town’s budget goals are to “maintain a high level of basic, community services,” particularly public works and police. There will be some deferred maintenance on streets, but Tippetts said that isn’t a long-term policy because such delaying projects could make them more costly in the future.
Tippetts said she is particularly concerned about freezing salaries for another year, since employees are the town’s most valuable asset.
“I worry a little bit about morale,” she said.
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