Despite more cuts, Aspen will have to dip into reserves
ASPEN ” Even with more than $3 million in cuts, which includes a half-dozen employee layoffs and 4 percent pay cuts across the board, the Aspen city government will have to dip into its reserves this year.
The Aspen City Council on Tuesday agreed to slashing $1 million as part of a second round of cuts to the 2009 budget; the come on top of another $2.4 million in savings already made.
The current estimate is that the 2009 budget will dip into the $5,621,300 operating reserve by $158,115, according to City Finance Director Don Taylor.
“That’s just a couple percents of the total reserve,” he told the council. “We feel we are in good shape with the cuts we’ve made.”
Despite the cuts, the council tentatively agreed to increase the Aspen Chamber Resort Association’s marketing budget by $200,000 in an effort to get more people to the resort in the coming months. A detailed plan will be presented within the next couple of weeks by chamber officials before the money is dedicated.
The City Council also agreed to scrap its plans to build an outdoor pool at the Aspen Recreation Center, which was estimated to cost $1.7 million. It would have been funded by the open space and parks department, and TABOR funds.
The latest rounds of cuts affect City Hall employees the most. The average employee will lose about $1,700 in the form of benefits, or about a 4 percent decrease in the average employee’s overall pay package.
The council agreed to reduce the “goals and outcomes” program, which had offered a maximum of $1,800 in incentive payments to employees, to a new maximum of $1,000 per full-time employee if they meet their goals. The savings amount to $253,000 city-wide.
Also eliminated is the “commuter cash” program, which rewards employees for using alternative ways of getting to work rather than in a car, saving $18,000 city-wide, officials said. “Over the top” awards handed out to employees nominated for special achievements by colleagues also are gone, saving $15,000.
City employees also will see the fitness and wellness benefit program go away in 2010, saving $303,000 city-wide. The benefit equals the cost of a two-day-a-week ski pass with an Aspen Chamber Resort Association discount, although employees can use it for other fitness-related purposes.
Next on the horizon of cuts ” if necessary ” will be city employees’ health, dental and vision plans.
City Manager Steve Barwick said the government can’t afford increased health insurance costs at a rate of 8 percent a year when the general fund revenues are only growing 1 or 2 percent annually.
“It’s a problem area,” he said. “We can no longer afford it.”
Barwick added that he will engage employees in a series of conversations to help decide what a change in those benefits will look like, including implementing health savings accounts.
Other cuts under review are retirement bonuses and service awards.
Cuts made to date account for an 11 percent decrease in the general fund for 2009, which stood at approximately $25 million when adopted in late 2008 and now stands at approximately $22.9 million.
City financiers are projecting an overall 12 percent drop in sales tax revenues for 2009.
“Sales tax revenues have declined in the range of 15-20 percent over the past several months and the outlook for the rest of the ski season appears to be equally bleak. Perhaps worse,” Taylor wrote in a memo to council.
Sales tax projections from 2010 to 2012 estimate an annual 4 percent growth.
Building and community development fees are projected to be down 50 percent in 2009. But city financiers project a rebound in the next three years, with increases between 20 and 25 percent in 2010 through 2012.
Mayor Mick Ireland stressed that when the council considers the 2010 budget, which could be as early as July, there ought to be a contingency plan if revenue projections are dramatically off.
If more cuts are needed, Barwick told the council it will have to make difficult decisions about what public services and programs will have to be eliminated.
“You’ll need to give us guidance,” he said. “You’ll have to make some tough choices.”
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The rebuild of the Paepcke Transit Hub on Main Street in Aspen this summer will cause traffic delays.