Snowmass faces a budget crunch
Vail CO Colorado
SNOWMASS VILLAGE, Colorado ” Between the unsteady economy and rising expenses, the town of Snowmass Village will have to make some tough budget decisions this year.
The town finance department has predicted that cost increases beyond its control ” particularly energy expenses and Town Hall payments ” will drive the town’s expenses up by nearly 9 percent in 2009.
Gasoline expenses are predicted to rise 20 percent over last year, and utility costs are predicted to swell by 30 percent. Snowmass is particularly impacted by increasing fuel costs because of its road-melt system, noted Town Manager Russell Forrest at a Town Council budget meeting Tuesday.
And starting next year, the town must start paying principal payments on its Town Hall. Doing so will raise its annual payments from approximately $350,000 to $680,000.
The debt structure results from the town’s decision to fund the nearly $10 million Town Hall building with a Certificate of Participation after voters turned down a 2005 bond issue.
Meanwhile, the unsteady economy has Snowmass worried that it won’t be able to simply count on increased revenue to pay its rising expenses. It is conservatively predicting no growth in sales tax revenue for next year, and some Town Council members have questioned if that prediction is low enough. Even so, town finance director Marianne Rakowski is predicting a 15 percent increase in overall revenue, due largely to transfers in from other funds.
“We’ve seen some incredible changes to the national economy,” Forrest said.
But while they acknowledge that cuts will have to be made, Town Council members made it clear that all possible capital expenses, such as entryway work and a new bus stop, should be trimmed before any cuts are made to essential services or employee salaries and benefits.
And while town staff say they’ll do their best, a budget proposed yesterday predicts that the normal 3 percent pay increases may need to be cut to 2.25 percent, and the standard 15 percent increase in benefits may be reduced to 7 percent. Rakowski said the town will wait until June to determine if those cuts will need to actually be made.
The town is particularly worried about cutting employee benefits and salaries because of its recent struggle to attract and maintain qualified people. In the past year-and-a-half, 25 percent of the Snowmass workforce has turned over, according to Rakowski. She cited a variety of reasons for the turnover, including Snowmass’ high cost-of-living, its shortage of affordable housing and competition with better-paid jobs
in Aspen or downvalley.
As an example, she noted that recently Snowmass was advertising for a maintenance operator. The ad was running alongside an ad for the same job in Aspen, which started at $2 more per hour.
The turnover ” and the fact that some jobs remained open for as long as eight months ” cost the town almost $32,000 in job advertising costs last year.
Mayor Doug Mercatoris noted that, in general, the cost of hiring and training new employees is as a reason to cut capital expenses before employee expenses.
“When you have to retrain staff, when you have to start over again, when we lose a good staff person for a minor change in pay, I don’t think it’s in the best interest of the organization,” he said.
And while cuts will undoubtedly need to be made, town staff and council have said they don’t want to overreact to the current economic crisis. So the finance department has proposed creating “budget checkpoints” ” effectively, mid-stream checks on actual revenue-so that the town can respond almost immediately to revenue changes with spending changes.
On Tuesday, council members asked the department not to wait for sales tax information to be released from the state, but to also devise a way to have eight to 10 local businesses provide real-time sales tax information directly to the town.
“If you can get that, that is the best way to really take the economic heartbeat of a resort community,” agreed Forrest.
At the beginning of the meeting, financial advisory board chair Rick Griffin warned Town Council to be careful with the town’s money.
“You all are going to have to have restraints,” he told them. “Every time we spend money, it has an impact-and that impact is we don’t have that money to spend on something else.”
Throughout Tuesday’s meeting, several town council members echoed his call for conservative thinking. For example, council member Arnie Mordkin questioned the predicted three percent increase in the Real Estate Transfer Tax (RETT) fund, given Griffin’s earlier estimate that real estate sales in Snowmass, in volume and revenue,
were currently down somewhere between 60 and 65 percent.
On Tuesday, several staff members took turns defending their budgets-or even asking for new funds-but few were promised immunity from budget cuts. Marketing director Susan Hamley made an impassioned plea for saving the marketing budget, arguing that studies show marketing becomes even more important during a recession.
“When times are good, advertising is crucial, when times are bad, advertising is a matter of life and death.” Hamley said, quoting a study that she passed out to council members.
Nonetheless, the town cut the $22,000 it spends each year to advertise its free summer concert series.
While that has been the only official budget cut so far, certain town wishes are almost certain to be passed over this year ” such as the second phase of Rodeo Place or a winter ice rink at the rodeo. Others, such as an additional mechanic for the town fleet, or an art installation in front of Town Hall, may be held off until the economic picture is clearer in May. In some cases, the town is beginning to imagine creative solutions: Instead of hiring someone to manage a climbing wall, for example, it may use volunteers willing to trade their time for climbing gym benefits.
And in at least one case, the Town Council was willing to increase spending next year by authorizing $29,000 to make sure that town trails are either plowed or groomed immediately after a snowfall, so that they can be used for foot transportation in the winter.
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