Vail over the years has built a large rainy-day fund. It\u2019s raining, hard, right now.<\/p>\n
The Vail Town Council adopted a \u201ccrisis\u201d budget plan at its June 2 meeting that includes spending cuts, furloughs and a substantial use of reserve funds.<\/p>\n
The loss of revenue comes largely in the wake of the March 15 closure of Vail Mountain due to the global COVID-19 pandemic. April sales tax collections were down 75% percent compared to 2019 collections. Town officials had estimated an 80% drop.<\/p>\n
Due to the pandemic, many town-sponsored special events have either been canceled, moved to 2021 or reimagined. That\u2019s resulted in an estimated $864,000 savings in event spending.<\/p>\n
But a budget memo indicates that staff will present at least some plans for newly-imagined ways to draw visitors during the summer and fall.<\/p>\n
Some of the biggest cuts come in the town\u2019s capital projects fund. The biggest cut is a delay in building a $4.6 million retaining wall on the north side of the town\u2019s public works campus, on the north side of Interstate 70 roughly across from the town\u2019s golf course. That wall is needed before the facility is largely rebuilt, a project that\u2019s likely been delayed until at least 2022.<\/p>\n
In all, the town has deferred $25 million in capital expenses.<\/p>\n
Vail Finance Director Kathleen Halloran told council members that roughly 60% of the budget shortfall will be covered from reserves, with the remainder covered by various cuts. Those cuts include pay freezes, not hiring open positions, and some furloughs. The town for the summer has abandoned paid overnight parking. It\u2019s expected there won\u2019t be as much parking demand this summer, and not staffing the parking structure kiosks will save some money.<\/p>\n
While cuts are being made, the town is making use of its reserves to keep putting money into the Vail Emergency Relief Fund. The initial $500,000 into the fund is expected to be followed with another $500,000.<\/p>\n
With all the cutbacks, the town\u2019s general fund still shows a healthy reserve. The current projections show the town\u2019s general fund will end the year with $29.8 million still in the bank. That\u2019s roughly 68% of the town\u2019s normal general fund revenue streams. Council policy is to have at least a 35% fund balance for the general fund.<\/p>\n
Across all funds, the town is financially healthy.<\/p>\n
According to the town\u2019s most recent audited financial statement, from McMahan and Associates, the town\u2019s assets exceed its liabilities by nearly $321 million. Across all funds, the town has nearly $111 million in reserves.<\/p>\n
As Vail\u2019s lodges, restaurants and shops gradually reopen, there should be more activity into the summer, but June\u2019s sales tax collections won\u2019t be reported until August.<\/p>\n
Council member Travis Coggin called the current budget plan a \u201cprudent\u201d move.<\/p>\n
Councilmember Jen Mason said July and August may be more telling about how the town is recovering.<\/p>\n
But, Coggin noted that if July\u2019s revenue is only 50% of the previous year, \u201cWe\u2019re not going to make it up in October and November.\u201d<\/p>\n