Tax revenue drop forces Palisade to slash its budget
Palisade town officials’ decision to slash spending this year by nearly $250,000 has generated mixed reactions from town trustees. Some suggest a few cuts should be restored. Others are proposing deeper reductions.
Town Administrator Tim Sarmo recently implemented a series of spending cuts, deferrals and transfers that account for nearly 10 percent of the town’s $2.8 million general fund. The general fund subsidizes most town services.
The belt-tightening comes in light of a 22 percent decline in the town’s January sales tax revenue compared to January 2009, a number that is more reflective of the town’s share of Mesa County’s tax revenue than the revenue coming from town business sales. Palisade’s share of county sales tax dollars makes up nearly half of its general-fund revenue.
Following a $250,000 shortfall in 2009, Sarmo said the town would see a general-fund shortfall of $302,000 this year should county sales-tax revenue continue to decline at the same rate through the end of the year.
Sarmo trimmed from several town departments and areas of the town’s budget. He let go of an administrative assistant in his office and eliminated two seasonal public works jobs. He suspended out-of-town travel and training for employees and reduced pool hours and funding for marketing the town’s upcoming Sunday Market.
He also transferred a combined $144,000 from the town’s water and sewer funds to pay for a portion of the $650,000 Kluge Avenue reconstruction project. The transfer means some water and sewer line work will be delayed.
Sarmo told town trustees that even though he avoided reductions in emergency services, the public will notice the cuts.
“Hopefully these are responsible cuts at this point,” he said. “Maybe they’re not enough, but it’s a prudent start.”
Trustee Dave Edwards questioned whether Sarmo had cut enough, noting the $60,000 gap between the amount of cuts and the projected shortfall if tax revenue continues to fall. He also wondered whether the town should consider closing the pool this summer, suggesting operational savings there could be applied to sidewalk and street improvements.
Sarmo said Wednesday he doesn’t believe it’s necessary to shut down the pool.
Trustee Michael Krueger said he isn’t sure the $7,000 the town would save by not hiring the two public works employees for the summer is worth losing the work they could perform.
Mayor Dave Walker asked Sarmo to consider reinstating funding for the seasonal jobs and marketing the Sunday Market.