Glenwood makes small budget cut for 2010
October 5, 2009
GLENWOOD SPRINGS – Glenwood Springs has weathered the economic storm pretty well despite huge declines in revenues in 2009, according to City Manager Jeff Hecksel.
“Things are not great, but we can get through this,” he said.
The 2010 proposed budget is $80,915,943, or less than 2 percent under this year’s budget of $82,300,239. Revenue projections show a 9 percent decline, from $73,528,645 in 2009 to $66,607,164 for 2010.
Hecksel said a more dramatic decrease was avoided because of city jumped on procedures to minimize costs early enough to cushion the shortfall in revenues seen this year.
Hecksel told City Council at a budget meeting Thursday morning that the 2008 actual revenues were “pretty staggering.” But prior to 2008, “We had some pretty good sales tax years,” Hecksel said. And it’s those good years that will help Glenwood get through this downturn.
A percentage ranging between 25 and 50 percent of the excess revenues in 2005, 2006 and 2007 went into a reserve fund, Hecksel said. That is why he believes that Glenwood is “not in as bad of condition as it could be.
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“We knew that we would need to take some of that money, or a good percentage of it, and put it in the bank because we are going to have another downturn,” Hecksel said.
But he said that department heads began minimizing costs when the downturn really hit the region hard in 2008.
“This actually happened the end of last year, where we said, ‘This is not looking good, and we will have to start looking at what we can do,'” Hecksel said.
The city did two distinct cost-minimizing measures, Hecksel said, during the past 12 months to lessen the expenditures. The first step, he said, was for him to ask the department heads to decide what could be cut from their respective budgets without seriously affecting their operations. The second thing was more short-term cost-saving measures like furlough days.
Hecksel does not expect any layoffs in the next year, either, but more furlough days could happen as continuing short-term cost-saving measures. But staff salaries and benefits will remain static at least for 2010.
Operating costs and employee salaries total $12.5 million in the proposed budget, down just over $284,000 from 2009.
However, Hecksel said that the city will have to continue to monitor revenues and expenses throughout the year, and may have to make adjustments if necessary.
“We have done pretty good with that,” he said. “If you look at the general fund in the 2010 budget, I believe expenses are down from ’08 and ’09.”
While that is true, Hecksel told council that the proposed 2010 capital improvement projects were “pretty aggressive.”
Capital improvement projects total more than $24 million for the proposed 2010 budget. That is up from just over $10 million in 2009. But $15 million of that increase covers the construction of the new wastewater treatment facility. So, in reality, the city is operating at near 2009 capital improvement levels for 2010.
“It’s not inconceivable that we may have to make some adjustments on our capital side,” he said. “But I feel good about what we have proposed here.”
Hecksel and city administrators decided to forgo their regular two-year budgeting process in 2008 and 2009.
“Because of the adverse financial conditions, the normal budget process was not followed this year,” Hecksel wrote in a memo to City Council.
Hecksel explained that normally, two years of budget are presented in one year and in a “more normal process” the 2009 and 2010 budget would have been presented to council last fall. However, he explained that administration held back in presenting the 2010 budget last year due to the changing economic conditions. Hecksel said that he expects to return to the two-year budget process for the 2011 and 2012 budgets.
A public meeting on the 2010 proposed budget is scheduled for Oct. 15, at the regularly scheduled City Council meeting.