City of Aspen employees have some benefits put on pause
The city of Aspen will save almost $1.8 million this year by suspending compensation programs for its 300-plus employees as the municipal government tightens its belt during the COVID-19 crisis.
Facing more than $20 million in revenue losses in 2020 due to the pandemic, Aspen City Council during a work session Monday agreed to the reduction plan, which could be as much as a $2,650 hit to full-time employees.
Councilwoman Rachel Richards said while she understands the city has to tighten its belt, it’s a “kick in the gut” to those city employees who make $40,000 or $50,000 a year.
“That’s a pretty significant hit to their take home,” she said, acknowledging that enduring small cuts to prevent furloughs and layoffs is less painful than the latter option. “I know it’s all for one, one for all.”
She successfully convinced council to give employees about a third of their annual $1,000 cafeteria benefit used for health care, dependent care or other needs, rather than cut it entirely.
But for 2021, employees will not receive their annual performance bonuses of as much as $1,650.
There also is a freeze on pay raises of as much as 4%, which began in April and will last at least 12 months.
City employees will keep their up to $500-a-year wellness benefit, which goes to supporting primary care provider visits and health screenings. Officials said cutting that program, which has an annual cost of approximately $80,000, is not wise during the current health crisis.
Employees also will incur a small increase in their health insurance premiums, which the city covers 85% of and individuals 15%.
Council agreed with staff’s recommendation of increasing employer premiums 2% and employee premiums 1%, which leave a projected fund balance of $3.2 million in 2021 and is about 50% of annual total plan costs.
The city will continue evaluating health plan design changes through the fall of 2020.
The city’s employee assistance program, dental and vision insurance, bus passes and other programs will continue in a similar format and costs in 2021 as this year, according to city officials.
Aggregate sales tax revenue is down 16% through May, and is projected to be down 25% overall for the year.
In May, City Finance Director Pete Strecker told Council that he estimated a $25 million loss in revenue and that most funding sources will take two years to recover, realizing half in 2021 and the other in 2022.
Council at the time agreed to $16.2 million in cuts.
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