Amid deep concern over the town’s economic future Edgartown town administrator Pamela Dolby announced in a letter sent yesterday that no municipal employees will receive a cost of living adjustment (COLA) to their salaries this year.

“We are struggling to fund operating budgets, fixed costs, and articles needed by various departments,” Ms. Dolby wrote in a letter to all departments, adding that anticipated state funding cuts remain one of several unknown quantities.

“Will the economy get worse or how bad will it get? What about next year? There are just too many unknowns at this point,” she wrote.

The decision, made by selectmen and finance committee members this week as they reviewed next year’s $26 million budget, applies to every town employee except faculty under union contracts at the Edgartown School. It does not affect standard pay raises and step increases, Ms. Dolby said.

“Everyone entitled to it will get the step increase,” she confirmed yesterday, adding: “There won’t be any cut positions this year.”

Last year the town gave employees a 4.2 per cent cost of living increase and in recent years the figure has hovered between 4 and 4.5 per cent, higher than most towns.

Behind the decision is a great deal of uncertainty about the effect of a worsening recession on local receipts this winter.

“And we can expect at least some local aid will be cut,” said selectman Arthur Smadbeck yesterday. “They might even make cuts for ’09 for this year. So the concept was what is fiscally responsible until a clear picture of what is going to be happening [emerges].”

Mr. Smadbeck underscored the depth of cuts already made by departments.

“Level funding is a funny term, a lot of people take it to really mean a 2.5 per cent increase,” he said, “but a lot of Edgartown departments really got bottom lines of zero per cent.

“The takeaway is a tremendous sense of cooperation form everyone involved. And my hat goes off to Pam — not only did she do a remarkable job fathoming it all but communicating it to everybody. We’ll get through this tough time.”

Funding for a new cruiser was cut from the police department budget. Money for library repairs and rodent control was not recommended by the finance committee. Following several meetings over the past fortnight water superintendent Fred Dumont met again with Ms. Dolby and agreed to move a $30,000 interest line from his operating budget.

“We’ve cut meat out of the budget,” said Mr. Smadbeck. “It sends a great message to the other towns.”

It’s a message he took to a meeting of the all-Island selectmen Wednesday night.

“It’s a case of buckling our belts and getting ready,” Mr. Smadbeck said. “If you use as a model last year’s revenue and deduct 20 per cent, we’re all going to be in a hard spot.”

Addressing selectmen and finance committee members at a Wednesday meeting, Ms. Dolby said she is still in the process of looking for extra money in the coffers to help offset any budget increases that remain.

“What I’ve been doing is finding mostly old balances of articles,” she told finance committee members, listing money she had found attached to now completed projects, including ambulance payments and money for an easement for sewer pipes at the Morgan Woods property. She praised town employees for their compliance.

“I told them it’s a choice between COLA and cutting positions. I met with personnel; they didn’t understand yesterday, they understand now,” she said. “Everyone’s been awesome, I’ve got to say.”

The finance committee voted to not recommend three articles on the annual warrant and made adjustments to several others which seek money from free cash or Proposition two and a half. The items will still appear for vote on the annual town meeting warrant.

The committee rejected $11,000 for continued financing of a county-wide rodent control program and two funding recommendations from the community preservation committee: $28,000 for a bike path survey on Chappaquiddick and $195,000 for repairs to the public library. The committee had concerns that the repairs be most effectively done following a proposed moving of the building as part of a bigger project for which the library is seeking $12 million in state funding.

“It’s premature [to do these repairs],” said finance committee member Laurence Mercier.

“This would be great if they weren’t going ahead with the capital project,” agreed selectman Michael Donaroma.

“We were told they didn’t anticipate moving for five years,” said selectman Margaret Serpa.

The committee cut $40,000 from three funding requests submitted for the warrant as override items by the harbor master to repair stakes, floats and spiles and to finance new spikes for the harbor.

The committee did not slash across the board; in her adjustments Ms. Dolby removed $10,000 in funding for the beautification committee, which the finance committee ultimately voted to include.

“We’re talking priorities,” reasoned Ms. Dolby. “Maybe it’s not the year to redo the parking lot,” she said.

“We’ve got to make the town beautiful,” countered committee member Steven Jordan.

“That’s what we’re selling here,” echoed Tom Durawa.

Yesterday Ms. Dolby predicted that total spending will be less than last year, explaining that while the budget number is higher than last year it includes many items that used to appear on the warrant.

“Taxpayers will probably end up paying less in the coming year — I’m hoping,” she said. And she said major changes to the budget in all likelihood were now over.

“It’s not cast in stone; there’s still tweaking to be done,” she said, pointing to the controversial high school assessment formula which is still to be finalized, “but I expect it to be wrapped up within two weeks.”