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Town budget, without layoffs

Town employees won’t be getting a pink slip for Christmas after the Pagosa Springs Town Council voted to approve a 2010 budget that will, given substantial drops in sales tax revenues, dip into general fund reserves but will not entail layoffs of town staff.

Presented with two options for next year’s budget during a Dec. 15 special meeting, council heard the bad news: economic trends during the past year that suggested a drop in sales tax revenues between 8 and 9 percent relative to 2008 revenues (across a yearlong period) and no suggestion that things would turn around within the next year.

At the Dec. 17 mid-month meeting, scheduled as a public hearing for the budget (at which no one spoke up), members of council approved their first option with a unanimous vote, despite opinions expressed at the previous Tuesday meeting.

“I don’t think we’ve seen the bottom yet,” said council member Darrell Cotton.

Yet, despite Cotton’s seeming willingness to cut jobs during the Dec. 15 meeting (”I have problems pulling money out of reserves,” he’d said), he voted with council to dip into reserves to preserve jobs at the town staff level.

Prior to the vote, Town Manager David Mitchem reminded council that two options for the 2010 budget and asked council to decide which option to accept.

In the first option, at a 10-percent reduction, expenditures would be reduced by $412,430, with $38,708 added to general fund reserves. At a 15-percent reduction, the town would reduce expenditures by an additional $153,406 (for a total of $565,836 expenditure reduction) and would need to tap $27,485 from general fund reserves (generated from expenditure reductions). Finally, at a 20-percent reduction, the town would reduce expenditures by another $153,408 (for a $719,244 total) and would need an additional $48,104 drawn from reserves — a total of $75,589 from reserves at a 20-percent reduction.

This past year, the town added over $550,000 to its total reserves and staff projects that the town should have about $950,000 in general fund reserves by the end of this year. With its total general fund reserves, Mitchem said that the town could operate just shy of six months on zero revenues — a highly unlikely scenario.

In the second option, the town would cut staff (FTE — Full Time Employee) by 2.53 FTE at a 10-percent reduction; one FTE from the police department, one FTE from the parks and recreation department, .2 FTE from the municipal court staff and .33 FTE from the community center, reducing expenses by $86,848. At a 15-percent reduction, the town would further reduce expenses $153,406 and would cut another .4 FTE from the town’s building and planning department (a savings of $20,080) and at a 20-percent reduction, the town would reduce expenditures by an additional $153,408 (a total reduction of $306,814 in expenditures) while cutting another FTE from the police department (saving $50,918).

In Option 2, savings from staff reductions would be moved from the general fund to the capital improvement fund for the purpose of funding road construction.

Despite having posted the discussion as a public hearing on the budget and calling for public comment, no one spoke up regarding the budget. With a motion by council member Jerry Jackson to approve the 2010 budget as suggested in Option 1, and with a second by council member Stan Holt, council approved the motion with a unanimous vote.