Eagle County launches COVID-19 budget trimming discussions
Early June retreat planned to map out spending priorities
As Eagle County businesses and residents begin their transition from COVID-19 lockdown, county officials know the full financial ramifications of the virus have yet to hit.
But when they do, local officials expect a wallop.
While it is too early to tie down actual numbers, this week the Eagle County Commissioners began talking about priorities. Or, rather, they began talking about how they will determine priorities.
“We are on strong financial footing. We can weather this storm. But we will have to make some hard decisions in 2021 and 2022,” said Eagle County Finance Director Jill Klosterman during a discussion with the commissioners.
Right now, the county has more than $30 million in its general fund reserves. The commissioners dipped into those reserves earlier this spring to fund two resident assistance programs. Reserves can also be used to balance the county budget if expenditures outpace revenues, but that’s not a sustainable solution and it could leave the county in a precarious position if another emergency arises.
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The alternative, naturally, is to reduce spending. But the county wants to be thoughtful about how it cuts back.
“Cutting with a scalpel instead of a hatchet is the intent,” Klosterman said.
Morale and integrity
As the county embarks on its budget priorities discussions, personnel decisions will be one of the touchiest subjects. At the same time, it is a subject that’s hard to avoid. As Klosterman noted, 45% of the county’s operating budget goes to salaries and benefits.
“We want to allow for natural attrition to lead the cuts,” Klosterman said.
Eagle County Manager Jeff Shroll supported Klosterman’s proposed surgical approach to budget cuts, noting that it has taken years for the county to recover from the early retirement and reductions in force that followed the economic downturn in 2008.
“That doesn’t mean we won’t lose folks,” Shroll noted. “But we want to recognize how powerful our organization is and be careful with that integrity.”
The county will begin formulating its post COVID-19 budget priorities in early June during a special retreat. The tentative date for the work session is Monday, June 8.
Even before the retreat begins, the county knows it has some key budget responsibilities including the delivery of core and essential services. But defining what makes a service “core and essential” is another task county leaders will grapple with.
“We won’t have the luxury of doing core and essential services and some other things,” said Commissioner Kathy Chandler-Henry.
But while the county is busy talking about what to cut from the budget, there may still be some discussion about what to add. Specifically, Commissioner Matt Scherr noted the COVID-19 experience has demonstrated the need to diversify the county’s tourism economy.
“I don’t think we want to recover this economy. We want a different economy over time,” said Scherr. “The landscape has totally shifted and this could be our opportunity, now, to figure out how we can begin to address that.”
Eagle County Special Projects Manager Abby Dallmann noted that post-COVID-19 planning won’t be resolved in a single retreat. It will take years to adapt to the impact, she noted.
“But we can conclusively say that Eagle County government, as an organization, has been pretty adaptable and responsive to change,” Dallmann said.
With that in mind, Dallmann said determining long-term spending priorities is the first step in the county’s new adaptability challenge.
And as they head into the discussion, county officials know it will be a tough exercise.
“This is a much more pleasant exercise when there are excess funds,” Chandler-Henry said.