TELLURIDE – After numerous budget worksessions and meetings held over the past three months, the Telluride Town Council approved a resolution to adopt the Fiscal Year 2011 budget in a 6-0 vote on Tuesday (Councilmember Brian Werner was absent).

After implementing a number of cost-cutting measures over the past two years in response to revenue shortfalls generated by the Great Recession, council took a conservative approach for the 2011 fiscal year. The budget is based largely on flat revenue projections despite some indications of economic improvement.

“We’re staying the course,” Town Manager Greg Clifton told council as he presented the budget for its review.

Perhaps most notably, the 2011 budget establishes a new “Street, Bridge and Alley Fund” within the town’s Capital Fund in which to stockpile unspent money toward desperately needed road, alley and sidewalk projects.

The move comes two years after voters here rejected a $12 million bond to reconstruct the majority of the crumbling Highway 145 Spur into town, and one year after they declined a three-mill property tax increase to create a dedicated fund to deal with the town’s street and alley infrastructure.

The fund, seeded with $2.65 million in surplus Real Estate Transfer Tax and other revenues derived from higher-than-budgeted earnings this year, will capitalize on a “save and pay” strategy utilizing existing revenue sources, and should be augmented by several hundred thousand dollars annually over the next five years, allowing the town to build reserves to fund large capital improvement projects.

“We’re planning over the next five years to start spending those dollars for some road projects,” Clifton said.

The first of these is a budgeted $880,000 temporary fix of the Spur scheduled for 2011. The project proposes to fill in with asphalt the numerous ruts and potholes that pock the disintegrating road, and then to overlay the smoother road surface with another two-inch layer of asphalt, an essentially cosmetic treatment that should buy three to five more years of functionality.

“It would not have happened if not for RETT coming in and us being able to allocate those funds,” said Mayor Stu Fraser.

The budget also sets aside $300,000 to help pay for a roundabout at Society Turn, scheduled for installation by the Colorado Department of Transportation in 2012. CDOT has agreed to build the roundabout at the busy intersection in lieu of a less expensive traffic signal, provided the agency receives a funding commitment for the $1 million cost difference between the two projects. To that end, the town will ask Mountain Village and San Miguel County to join in contributing, and will look for other available funding, as well.

While the budget will continue to retain certain portions of the town’s recession plan through at least the first half of the new year, including a government hiring and compensation freeze implemented in late 2008, Clifton recommended a “mid-year check in” to determine whether upward adjustments could be made as a result of increasing revenues.

At that point “we would hope to revisit” employee compensation, he said.

The budget also retains the same $215,000 in service grants provided to community nonprofits and special events allocated in FY 2010 for dispersal through the town’s Commission for Community Assistance, Arts and Special Events.

A list of council priorities for the coming year is outlined in the final budget document. It includes: the cultivation of economic development and a successful commercial core; community preservation; addressing critical infrastructure needs; and implementing an environmental action agenda.

“The budget is one of the most important things we deal with as a council, it sets a plan for the entire 2011 period as well as next 5 years and it was probably one of the best thought out budgets I’ve dealt with in my time on council,” said Fraser.

“It was a pleasure to work with.”