Avon will dip into reserves to fund full menu of services in 2021
Avon continues planning on a difficult budget, public hearing set for Dec. 8
Elected officials and staff at the town of Avon want to maintain the town’s existing level of municipal services through 2021.
To do so, the town likely will need to dip into reserves in order to balance the budget while providing all the services targeted in the proposed budget.
At a public hearing on Nov. 17, Avon Town Manager Eric Heil said despite some of the challenges the town faced from the coronavirus pandemic in 2020, the town “still had all the same demands, if not more, on town services.”
Heil said more demands on public services over the summer, “particularly with our public works and parks, with the level of people that were enjoying our public spaces this summer,” were a result of the COVID-19 pandemic, but the usual demands on transit, police, landscaping and clean-up were also present.
The town of Avon’s total revenues in 2021 are projected to be about $31 million, and total 2021 expenditures are expected to be about $36 million.
That will still leave the town with an ending fund balance of more than $17 million, leaving Avon “very healthy” financially, Heil said.
Hotel, restaurant capacity chasm
The town’s general fund accounts for a little less than half of the total budget. Total revenues into the general fund are projected to be $17,191,782 in 2021, and total expenditures are expected to be $17,945,663.
But those projections will have to be re-examined throughout the year, as 2021 is expected to be uncertain, to say the least. Heil said the town will need to plan for greater operational flexibility.
“We anticipate that we’re going to have to adjust, adjust and adjust again, throughout the year,” Heil said. “As much as we’d like to settle into what we think the new health orders are going to be, it seems like things just keep changing every couple of months, and we’re seeing changes right now creating quite a bit of uncertainty.”
Part of that uncertainty comes from the fluctuating occupancy rates at local lodging and restaurant operations, which provide a valuable tax base to the town.
When Eagle County moved from yellow into the more-limiting orange phase of COVID-19 restrictions on Nov. 16, Avon bars were forced to close, and restaurant capacity was reduced to 25%.
Hotel capacity, however, remains at 100%, so in projecting sales tax revenues, Avon’s budget anticipates a modest increase in grocery store revenue to slightly make up for the decrease in restaurant revenue.
Councilmember Chico Thuon asked what the town’s role will be in addressing the difference in hotel availability and restaurant capacity.
“I don’t think anybody has really spoken about the fact that, potentially, we might not be able to feed everybody,” Thuon said.
Heil said Avon will be a participant in a common message across Eagle County which will address restaurant restrictions in helping people understand the current health orders.
Pete Reyes, General Manager at the Wyndham in Avon, said bookings are strong.
“Starting Thanksgiving, we’re at 100 percent,” Reyes told the Avon Town Council on Nov. 10.
For those hotel guests, “We’re very much expecting there’s going to be a lot more take-out, and a lot more grocery purchases,” Heil said.
Public hearing, vote Dec. 8
With all of the uncertainty surrounding sales tax collections and the revenues they may, or may not, bring in 2021, Avon will have to apply more scrutiny to the budget on an ongoing basis, Heil said.
Much of that scrutiny will surround the town staff’s efforts to plan for the 2022 budget, which will also be difficult.
“What’s our local economy going to look like, post-COVID, in 2022, and how does our town’s budget match up to that – that’s something we’re looking at now, and we’ll look at through the course of 2021, revisiting all those expenses across the board in our budget,” Heil said.
Councilmember Amy Phillips said at this point, “we can only guess” what the future will hold.
The town of Avon will host another virtual public hearing on the budget on Dec. 8, and the Town Council is expected to approve the budget at that time. A new council, to which Phillips was re-elected on Nov. 3, will be sworn in following the budget vote.
“What’s going to be really important is as we move forward, we are consistent with watching how things are playing out, and updating the budgets accordingly,” Phillips said.