City plans no-growth budget
Aspen’s City Hall is anticipating a little belt-tightening for the upcoming millennial year, as the City Council gets to work on a budget for the year 2000 that is projected to be a “zero-growth” version of the 1999 budget in terms of operations and services.
That’s because the city’s 1999 sales tax revenues are down for the first time in eight years, dropping by roughly 5 percent over revenues in 1998.
And officials are worried that tourism will be down over the critical Christmas-New Year’s season this year because of fears about the “Y2K problem,” causing further dips in tax revenues. Sales tax receipts pay nearly half of the city’s annual operating costs.
As a result, said the city’s top finance officer Monday, the only departments that will see budget increases for the coming year are those that are supported by special tax funds that have not been affected by recent downturns in sales tax receipts.
Those include the Aspen/Pitkin County Housing Authority and the Wheeler Opera House, which are both funded by the high-yield “real estate transfer taxes” and thus are boasting healthy cash balances.
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“We’re pretty unsure about what’s going to happen next year,” City Finance Director Tabatha Miller told the City Council at a budget work session Monday. As a result, said Miller and budget director Sheila Steinauer, they have called for a spending freeze in most city departments.
Although the city’s 1999 budget was set at more than $55.9 million, some $25 million of that was spent on special capital improvements such as the Downtown Enhancement Pedestrian Plan, the roundabout on Highway 82 and various other projects, as well as $6.3 million to pay the city’s debts.
For 2000, according to Miller, the city is planning on only about $18 million in capital projects – part of an overall budget of just under $46 million.
The 2000 budget represents a decrease in the cost of running the city. In 1999, the city spent a total of roughly $24.6 million on operating costs. In the year 2000, according to preliminary budget documents, the city expects to spend about $23 million on operating costs. The remainder will be primarily made up of capital costs ($17.8 million) and payment of the city’s debts ($5.2 million).
Miller said that in most city departments, the department heads are being instructed to forego raises and the hiring of new staffers unless they can be accommodated without spending hikes or unacceptable cuts in service levels.
Any budgetary shortfalls, said Miller and Steinauer, can be made up using the city’s general fund cash balance, which now stand at roughly $4.5 million.
Miller said the city’s property tax rate is expected to stay the same for next year. She noted that the city collected more than $500,000 in excess property tax revenues for 1999. Under the state’s Taxpayer Bill of Rights, the council must decide to either refund the money or hold a special election next year to ask the voters for permission to keep the excess revenues.
The City Council will hold a series of budget meetings over the next two months as it hammers out the final details, with adoption of the budget set for Dec. 13.
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