Basalt wields cleaver to balance budget and restore reserves | AspenTimes.com

Basalt wields cleaver to balance budget and restore reserves

The Pan and Fork property in Basalt has been the center of the town's political focus for nearly four years.

The Basalt Town Council is taking a cleaver to its budget for 2017. The only debate is how big of cleaver will be wielded.

The staff presented $1.33 million in potential cuts and adjustments to raise revenue to the Basalt Town Council in a work session Wednesday night. If enacted, the laundry list will achieve the goals of balancing the budget and restoring a 33 percent reserve.

The list included paring funds from major departments. The Police Department reduced its anticipated overtime. The Planning Department will delay the hiring of another land-use planner. Fewer outside consultants will be hired.

The proposal also called for saving $75,000 by reducing the budget for pavement repair and maintenance from $500,000 to $425,000. Another idea would save $87,000 by replacing two vehicles in the town fleet rather than three.

Discretionary funds to favored causes in the community also would be reduced under the proposal. The We-cycle bicycle-sharing program would be cut in half from $60,000 to $30,000.

The amount dedicated to child care would be reduced from $75,000 this year to $45,000 next year, with a request that Eagle County offset the reduction.

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Following the proposed recipe would balance the budget and produce $194,500 to restore the reserve to the full 33 percent. However, the council had a mixed reaction to the proposal.

"It's a lot of cuts. I'm not comfortable with all of those," Councilman Gary Tennenbaum said. "I'm looking at We-cycle and child care. These things make this community special."

Tennenbaum said the town government could shoot for partial progress on the goal of restoring its reserves to 33 percent of operating expenses in 2017, and fully restore it in future years.

Finance Director and Assistant Town Manager Judi Tippetts said some municipalities stash six months' worth of operating expenses in reserves while others go lower. It's "prudent" for Basalt to shoot for four months of reserves because it is so dependent on sales tax revenue. The town's sales tax revenue plummeted 19 percent for one year at the height of the Great Recession, she noted.

Sales tax collections are strong this year, Tippetts said. The town was counting on a 4 percent increase from last year but so far it is running at 5.33 percent.

Sales taxes collected in August for actual sales in July were up 5.5 percent.

Sales tax collected in September for sales in August soared 12 percent, according to a report by Tippetts. Restaurants with bars saw their business increased 24 percent over the same month the prior year. Retail food sales by the grocery stores were up almost 17 percent. General retail — sales by mom-and-pop stores — was an exception by falling 4.4 percent, the report showed.

So far this year, the town has collected $3.64 million in sales tax revenue through September.

The council deferred final decisions on the budget until all members are present. Councilman Auden Schendler is traveling on business and couldn't attend Wednesday's meeting. Councilman Mark Kittle also was absent.

The proposed budget is $7.27 million on unrestricted expenditures — items the town can control. It has $6.49 million in restricted expenditures, which cannot be adjusted. That creates a total budget of $13.75million.

scondon@aspentimes.com

PROPERTY TAX HIKE POSSIBLE

Basalt property owners might pay higher taxes starting in 2017 because of the Pan and Fork site even though a debt issue failed in the November election.

Basalt voters approved issuing $5 million in bonds in November 2013 to perform flood mitigation and infrastructure work on the former Pan and Fork Mobile Home site. About $2.5 million of the funds were borrowed to perform work on 2.3 acres of private property owned by the Roaring Fork Community Development Corp.

The town government and property owner assumed the funds would be reimbursed once Roaring Fork CDC sold the site to a developer and a project was built.

The bonds were issued in 2013 and 2014. The town is using a property tax to pay off debt incurred for work on its property. However, it used money from its general fund and open space sales tax to pay off the $2.5 million borrowed for work on the Roaring Fork CDC site, according to Finance Director and Assistant Town Manager Judi Tippetts.

The fate property owned by Roaring Fork CDC is unresolved. Voters rejected a proposal in last week’s election to buy the property for up to $3.1 million.

So, the town is scheduled to pay $351,000 per year through 2023 from its open space sales tax, as things stand.

Tippetts and Interim Town Manager Ron Miller suggested the council consider certifying a mill levy for a property tax increase to pay off the bonds. It would add $15 per year to the tax bill of a homeowner with a house valued at $500,000, according to the town’s calculations.

Councilman Bernie Grauer said former Town Manager Mike Scanlon had explained to him that he had inherited a proposal at the Pan and Fork site that wasn’t realistic as far as recovering the $2.5 million from Roaring Fork CDC.

“That is what we’re saddled with now,” Grauer said. “The chickens are coming home to roost.”

Councilman Gary Tennenbaum said he favors increasing the mill levy to pay off those bonds. No voter approval would be necessary because voters approved the debt in 2013.

The council will make a final decision later in its budget process.

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