Vail council to look into a package of budget cuts
Town could see a $10 million decline in revenue this year
Vail’s budget planning for 2020 included provisions for both “significant” and “major” economic downturns. The current downturn may be a major one.
The Vail Town Council on Tuesday will focus on details of an adjusted budget plan for the rest of the year. Information released ahead of that meeting indicates that the mid-March shutdown of the resort due to the COVID-19 virus will cost the town’s revenues as much as $10 million this year.
An analysis by the Vail Finance Department indicates that the expected revenue loss is roughly 13.5% of the town’s expected income this year. Sales tax loss is expected to add up to $7.2 million.
In addition to that loss, town revenues are expected to take drops of roughly $1 million in lift tax collections and parking sales. Rentals at Donovan Pavilion are expected to add up to $90,000.
According to a memo from Vail Finance Director Kathleen Halloran, the council will be asked to review several recommendations, including:
- Use of $4 million collected above 2019 budgeted expenses.
- Stop future employee merit increases for the rest of the year — unless finances improve. That’s a savings of about $730,000.
- Reduce operating expenses by 10%, a savings of about $1.2 million. That reduction doesn’t include staffing, but the town isn’t hiring for any new positions.
- Defer projects in the Capital Projects Fund and Real Estate Transfer Tax funds. That combination should save $18.3 million.
According to the memo, the cuts are intended to create only “minimal” changes to services seen by guests and residents.
While the discussion of the plan is scheduled for the afternoon meeting, which begins at 1 p.m., the council is expected to vote Tuesday evening on a supplemental budget. That document contains most of the cuts and adjustments recommended by the finance department.
Vail Daily Business Editor Scott Miller can be reached at email@example.com.