As city financiers estimate a $25 million loss in revenue this year due to COVID-19, they expect Aspen\u2019s economic recovery to take much longer than just this year.<\/p>\n
City Finance Director Pete Strecker told Aspen City Council on Monday during a work session<\/a> that most revenue will take two years to recover, realizing half in 2021 and the other in 2022.<\/p>\n \u201cAssume there\u2019s a bit of a lag in recovery with lodging and sales tax collections and things of that nature,\u201d he said. \u201cIt\u2019s not a \u2018bounce right back to where we were\u2019 situation, so we have to assume a slower recovery.\u201d<\/p>\n Strecker presented to council a revised 2020 budget, as well as the annual spring supplemental requests that this year amount to $1.2 million.<\/p>\n While the city plans to cut $16.2 million from the 2020 budget, carry-over and new initiatives are being considered.<\/p>\n Council is expected to vote on the supplemental requests on first reading May 12 and then on a final reading May 18, when public comment can be taken on the proposed ordinance.<\/p>\n The supplemental requests include the city\u2019s 37,500-square-foot office building on Rio Grande Place and three affordable housing projects that combined represent just over $41 million.<\/p>\n City Manager Sara Ott explained the municipal government is required to meet its debt obligations, and continue projects that it has acquired debt for.<\/p>\n \u201cThe previous City Council authorized the issuance of certificates of participation<\/a> to finance the building,\u201d she said. \u201cThere is an agreement to deliver a finished building product by a certain timeframe. So, the notion to just be able to stop the project and not spend the money doesn\u2019t work because then we default and to default would mean getting rid of having one of the highest credit ratings for a municipal government, and I don\u2019t think the long-term economic impacts of that doesn\u2019t put this community in a better position today than it would in three years.\u201d<\/p>\n Other expenses in the supplemental request range from bus stop improvements on Main Street in order to secure a state grant, to a handful of ongoing studies by outside consultants, as well as needed repairs at city facilities, including an appropriation for $480,000 to renovate a municipal government-owned house on Cemetery Lane, as well as improvements to other units in the inventory for city employees.<\/p>\n Strecker\u2019s latest revenue loss estimates are $12 million more than what he projected at the end of March.<\/p>\n Back then, it was assumed in a snapshot of time, that the city would lose nearly $13 million in lodging and sales tax revenue, based on a drop of $277 million in sales receipts from local businesses as a result of local public health orders that effectively shut down Aspen\u2019s economy.<\/p>\n But it\u2019s gotten much worse, and some City Council members are bracing for more economic hardship in the months to come.<\/p>\n Councilman Ward Hauenstein said he\u2019s concerned that the latest economic impact estimates coming out of the finance department are overly optimistic.<\/p>\n \u201cI would encourage council to be more conservative and look for deeper savings,\u201d he said.<\/p>\n Strecker said he will be revising his forecasted revenue declines by sector from what he saw in March<\/a>.<\/p>\n At that time, it was a decline of 34% across the board for 2020, but some sectors like lodging were estimated at 40% down. Restaurants were projected to be down 32%, luxury good sales 53%, construction at 38% and clothing and retail as high as 46% down.<\/p>\n