The Crested Butte News Serving the Gunnison Valley since 1999
Down four employees in four months
It’s one thing when you see shrinking budgets listed as numbers and percentages. It’s quite another when those deficits start to directly impact the lives of people, especially those with a long track record of civic contributions.
People like Bill Racek, Mt. Crested Butte’s community development department director. After 22 years of working for the town, Racek was laid off on Friday, November 5. And his position will not be filled in the foreseeable future. That leaves Theresa Henry and Carlos Velado to handle the day-to-day duties of the planning department, while town manager Joe Fitzpatrick takes over the supervisory responsibilities.
Fitzpatrick said it was a tough decision, driven by the existing and forecasted economic conditions. “We’re dealing with an economic issue, reduction in income, building revenue and sales tax are way down,” he explained. “The major expense of the town is salaries. [Racek’s] position has been eliminated for now and he’s laid off. We thank Bill for his service, and his dedicated service to the town since 1988; it’s a very difficult situation.”
The town has eliminated four positions in the past four months. Three employees left—Hunter Dale from the Community Development Department, police officer Jeff Ewert, and the finance department’s Emily White—and now Racek.
Fitzpatrick hopes things will improve in the future. “We’re looking forward to improved sales tax and building revenues, but in the near term, within the next year or two, we don’t expect any major development in Mt. Crested Butte.”
Trimming down the government workforce at the local level is a trend nationwide. An October 29 article in the USA Today reports, “In the past year, state and local employment has been reduced, mostly through not filling vacancies, by 258,000, or 1.3 percent, to 19.2 million workers, reports the Bureau of Labor Statistics. The cuts are the most since the recession of 1980-81. The federal workforce, meanwhile, grew 3.4 percent to 2.2 million in the past year.”
According to the article, cities, counties and schools have cut three times as fast as states. In Mt. Crested Butte, the four vacated positions will save the town $279,000, according to town finance director Karl Trujillo. He said the general fund will save $223,000 because the Housing Authority used to pay for one employee, because Hunter Dale was working on the affordable housing.
The cuts will create challenges as the town tries to maintain an acceptable level of service for its citizens. “The opportunities are to try to become more efficient and keep it where the public is still receiving a good level of service,” Fitzpatrick explained. “It is difficult because of the loss of manpower.”
2011 Budget Breakdown
The town has been engrossed in budget talks since October 19 and the process is nearing completion. One of the major goals of the town is to build up cash reserves to a minimum of 25 percent of general fund expenses. They are projecting cash reserves of $630,171 at the end of 2011.
Based on the preliminary 2011 general fund budget assumptions, sales tax revenues will be down 5 percent January through April compared to 2010. For May through December, the town is budgeting flat. Total estimated 2011 revenues are $2,881,670 compared to $3,156,199 in 2010.
“We’re hoping for a good winter,” said Trujillo. “The biggest hits [to the budget] have been sales tax revenues and building revenues.”
For example, Trujillo provided a comparison of building revenues from 2005 to present.
2005 — $1,370,000
2006 — $619,000
2007 — $561,000
2008 — $185,000
2009 — $171,000
2010 — $115,000
2011 —$100,000 (projected)
As for admissions tax, the town has budgeted $469,000 in revenue for 2011, which is flat with 2010. Of the $469,000, $352,000 is allocated to marketing and $117,000 goes to Mountain Express. Out of the marketing component, $202,000 has already been allocated to Crested Butte Mountain Resort, $22,000 is going to Crested Butte Lodging, and $1,250 for the Chamber of Commerce’s fall Butte Bucks program. That leaves $46,500 for the summer.
There are no salary or wage increases on the books, and the tight purse strings won’t likely loosen in 2012. Trujillo expressed concerns about the new property values that will be assessed in 2011, because he anticipates values could go down 30 percent or more. “If it drops 30 percent, for example, that will affect 2012 property tax income,” he said. For instance, the 2011 general fund projects $767,598 in property tax revenue. “Subtract 30 percent and that’s $230,000 it could drop. It would be a huge hit for our general fund. There’s not much fat in here at all. That could happen in 2012.”
Trujillo said the town is scheduled to meet with the assessor soon to get an idea of where values are headed. He said after they complete and approve the 2011 budget, the town’s five-year plan will be updated. A public hearing on the budget is scheduled for 6 p.m. at the Mt. Crested Butte town hall on Tuesday, November 16.
