ASPEN, Colorado - The Aspen city government laid off 12 employees Thursday and eliminated four other positions, shaving $1.36 million off its operating budget.
"It is incredibly sad to say good-bye to people we have worked beside for years," said City Manager Steve Barwick. "We regret the enormous impact these layoffs will have on their lives and hate that the extreme economic realities around us have led us to make these difficult decisions."
Staff salaries also will be frozen for 2010.
Thursday's personnel cuts follow more than $2.4 million in cuts made to the city's 2009 general fund budget, which included eliminating or freezing 20 positions, with nine employee layoffs. In February, the city froze all employee salaries, and eliminated or reduced some benefits and bonuses. Those personnel and benefit cuts amounted to about $1.4 million in savings, said Sally Spaulding, the city's community relations officer.
The latest $1.36 million in cuts does not constitute salaries alone - it includes all costs associated with an employee, including benefits and overhead expenses.
The Aspen City Council recently told Barwick to create a sustainable budget for 2010 and the years to come. Barwick met with council members individually in recent weeks to inform them of the cuts.
"I'm sick about it," said City Councilman Steve Skadron. "It's our responsibility to manage the public's money, and we gave direction for a balanced budget and we were aware this was part of it.
"Hardly a fun day ... it's not like 'yahoo, we balanced the budget,'" he added. "It keeps me up at night knowing that every decision we make has an impact to the public."
Sales tax collections continue to be weaker than projected at the beginning of 2009, and city officials don't anticipate the winter season to bounce back.
Year-to-date city sales tax collections were down 18 percent from last year through July, while lodging taxes were down 27 percent. Building and planning fees were down 46 percent year-to-date through August from last year.
The city is anticipating only a 1.5 percent increase in sales and lodging taxes for 2010 from 2009 levels. Building and planning fees are projected to be flat.
"Some of these layoffs are in areas where workloads have diminished, such as building activity and parks construction," Barwick said. "Other layoffs are designed to minimize impacts to customer service while adjusting the budget to fit the parameters for 2010 and the next few years."
Seven of the layoffs were in the city's general fund, four were in the parks and open space fund, and one was in the parking department (see related box).
"Many of the layoffs are in the parks and open space department, which is funded by sales tax," Barwick said. "We have to size the department to fit the revenue picture. The same is true for the general fund and parking fund."
Employees were given a two-week notice and have the option to either work during that time, or they will be paid for it if they choose not to return, Spaulding said. They also will be given severance packages - for every year of work, employees will be given one week of pay, with a maximum of eight weeks. Employees who have worked for the city for more than 15 years will receive an additional two weeks of pay.
City funds relate to each other but function individually. Governments cannot pull from one fund to bail out another, which is done in the private sector, officials said.
The budget cuts for 2010 and Thursday's layoffs will help solve the city's budget issues for the foreseeable future.
"The cuts will have impacts to the public, but there are no wholesale, programmatic impacts," Barwick said. "We will not be closing parks or the Aspen Recreation Center, or only policing the streets Monday through Friday, for example. The city of Aspen will remain committed to providing high-quality customer service with the resources we have available."
There will likely be more cuts to the operating budget and to benefits of employees. The City Council will meet throughout the fall to craft and finalize the 2010 budget. The first meeting is scheduled for Sept. 29 at 4 p.m. in council chambers in the basement of City Hall.
Barwick chose to do the layoffs before those meetings were held because it would have been inappropriate to discuss specific positions being eliminated, Spaulding said. And there was enough unrest within the government that employees were being negatively affected.
"Rumors were going around," Spaulding said. "It's a difficult time in the organization."
Furloughs were not an option because they don't create a sustainable operation, she added. And deferring layoffs would have only made it worse in the long run.
"We're trying to act now and keep our organization healthy in the future," Spaulding said, adding 70 percent of the general fund's operating budget constitutes personnel expenses.
The mood in City Hall was somber Thursday as department heads delivered the news to their employees. Department heads met over a month ago to begin discussing the layoffs.
Newly elected City Councilman Derek Johnson campaigned this spring on "right sizing" government. He said Thursday he didn't expect that to take the severe human toll it has within the organization.
"Pragmatically, the city right now is bringing in enough to cover its expenses, and that is not sustainable," Johnson said, adding his hope was to find savings elsewhere without affecting human beings. "These are people who have contributed to the city and community ... my thoughts and prayers lie with the people and their families.
"A brighter day will come."