Deeper cuts loom on Aspen’s horizon
ASPEN ” Aspen elected officials suggested Tuesday night that government employees are not immune to pay reductions, furloughs and layoffs, and council members have asked financiers to develop additional scenarios involving 5 and 10 percent budget cuts in the event the economy worsens.
The Aspen City Council on Tuesday adopted City Manager Steve Barwick’s proposal to shave up to $2 million from this year’s budget, which doesn’t include previous cuts made last fall.
The latest round of budget slashing includes more than $1 million in operational cuts to the city’s general fund. A salary freeze for all city employees has been put into place, which is expected to save roughly $425,000 in the general fund and another $727,000 across other departments.
The council also directed Barwick and his team to come up with deeper cuts to be presented in March that likely will translate into reductions to public services and employee salaries.
Layoffs appear to be imminent 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 result in less revenue ” planning and building fees are projected to be 50 percent lower and engineering fees 25 percent lower.
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.
Tensions were high at the council table when Councilman Dwayne Romero suggested that the economy is going to get worse before it gets better, and that the proposed budget cuts aren’t enough. He said eliminating bodies in City Hall may be a reality, specifically in the community development department.
“I realize this is a difficult conversation,” he said. “We are back on the curve given the realities that are occurring in the economy … We are a step, maybe two steps, behind the data that is squaring up.”
Barwick said it would be shortsighted to let people go now when there is still a sufficient workload to support staffing levels, and if the economy bounces back, having to train new employees for those vacant positions would end up costing more.
“I think it would behoove us to see what happens in two more months before we start laying off people,” Barwick said.
Mayor Mick Ireland agreed, saying the city government values its employees and taking drastic measures such as layoffs could be too hasty. He suggested that a contingency plan be devised in the event economic conditions worsen.
“Haste makes waste,” he said, adding it’s not the council’s place to micromanage department head decisions on how to cut their budgets. “We need to create a plan for pay adjustments and staffing, and we do need to give direction on a plan that we can implement rapidly without scaring the heck out of people.”
Councilman Jack Johnson and Ireland both took umbrage to Romero’s characterization that city government can no longer delay tough decisions and that he was expecting to have to take a leadership role on that issue.
“I don’t give it to you,” Johnson said in response. “I don’t understand how this is any different than the actions we’ve been taking … we said in the fall that we would be responsive to the conditions and we have met every month, and here we are.”
Councilwoman Jackie Kasabach said it would be helpful to see the rationale behind each operational cut proposed by department heads ” past and future ” because the council doesn’t have a detailed knowledge of the budget. She also suggested that each department head plan for a worst-case scenario.
“I feel very strongly that we take a pessimistic approach,” Kasabach said, adding she believes the economy will be in turmoil for at least two years.
Future budget cuts will likely result in service reductions to the public, which will have to be prioritized at future work sessions. The council has vowed to meet every month to amend the 2009 budget in response to ever-changing economic conditions.
The council also asked that members of the citizen budget task force be involved in further budget cuts and to help elected officials prioritize what service reductions should be implemented.
Ireland said legally mandated services and public safety should be off-limits.
Romero said there is room to cut from temporary labor, which will cost upward of $900,000 in 2009. He pointed to the Aspen Skiing Co., which has salaried employees working on the front lines scanning ski passes and performing other on-mountain duties.
“This is not a two-quarter recession,” he said. “We need a portfolio of levels [of cuts], or choices.”
Aspen resident Marilyn Marks said city officials’ projection that sales tax revenue will be down 11 percent for 2009 is not conservative enough, and they ought to start looking at additional salary cuts, including employee end-of-the year bonuses, which are budgeted at $536,550 for 2009. Roughly the same amount was given out in December for 2008 bonuses, which, given the economic outlook at the time, was irresponsible, she added.
“The budget is unrealistic,” Marks said. “I haven’t found a businessman in town who thinks they will be down 11 percent. It’s worse than that … big picture, it looks too optimistic.”
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A fundraiser is underway for graduating Aspen High School senior student/athlete Lucas Lee, who has lost both of his parents.