By Aleasha Sandley, Herald Bulletin Staff Writer
ANDERSON — City officials on Tuesday outlined options to city workers in an attempt to cut money from the budget, asking them to “stand together and make a little sacrifice.”
Options included implementing involuntary furloughs and wage freezes for employees, as well as discontinuing longevity pay, prohibiting overtime and increasing insurance deductibles. Any of those measures could be taken to avoid layoffs of up to 40 workers, which would save the city $1.4 million, Mayor Kris Ockomon said.
“It’s a little bit of a sacrifice we all have to make, and we can retain our jobs,” Ockomon said. “If there are cuts to be made, they will be made everywhere.”
The city is suffering from a $2.6 million loss in the general fund this year due to statewide legislation that capped property taxes, causing cities and towns across the state to scramble for funding as the tax caps decrease through 2010.
The city’s budget shortfall in 2010 is expected to be $4.86 million, said financial consultant Jim Steele.
City officials already have cut more than $1.5 million from the originally proposed 2009 budget, but $1.5 million more is needed to meet the reduced funding caused by tax caps and the recessed economy.
Fewer residents can afford to pay their property taxes — the city collected less than 92 percent of its due levy last year — and countywide assessed value has decreased by 25 percent over recent years.
“Our biggest problem as we go forward is we’re not growing,” Deputy Mayor Greg Graham said.
City officials hope to bring in $600,000 in additional revenue by passing a trash pickup fee of about $9.75 per household per month. That bill will come before the City Council on Thursday.
Department heads already have eliminated take-home vehicles and cell phone accounts from some city workers, and the staff has been reduced by 32 since budget projections were released.
Ockomon said he felt he had done all he could to prepare for the financial crisis.
“We knew we had a problem from the very first day,” he said. “We inherited quite a problem. I’ve had to devote all my time, all my effort to correcting a problem that shouldn’t have been there to begin with.”
Former Mayor Kevin Smith said his administration had gotten the ball rolling on budget cuts long before Ockomon took office in 2008.
“In 2005, I outlined these exact same issues where we called together the employees, we explained we had a reduced revenue stream and we took proactive measures,” he said. “We publicly announced and documented the decrease in revenues the city was facing, including the pending legislation House Bill 1001 (which capped property taxes.) By 2010, we knew the city had $5 million less.”
Smith said his administration reduced overall spending, combined positions to create efficiency through attrition and early retirements and left the 2008 budget with a surplus.
“If (the Ockomon administration is) claiming they inherited financial issues, why didn’t they address them in 2008 and 2009 (budgets)?” Smith said. “The Ockomon administration is a financial train wreck.”
Smith questioned why the city would hire employees knowing it was facing layoffs or why officials would buy new vehicles for department heads. He estimated eight police officers hired in the last several months.
“It’s morally and ethically wrong to go through and hire new employees, to give pay increases, to buy new vehicles when you know you’re going to lay people off,” he said.
Ockomon said vehicles were purchased for the police department and utilities departments because it ultimately is cheaper to buy new vehicles — especially police cars, which are used 24/7 — than to maintain older ones.
“If we’re going to have less people doing the job, we need to have at least good equipment to get the job done,” he said.
As for new hirings, Ockomon said the last people hired into the city were temporary staff members for the pool and dispatchers, which he said were needed positions that couldn’t be cut.
Without new workers, the city would pay more for overtime, Personnel Director Steve Priser said.
Water Pollution Control employee Jim Harper said the city needed to look at laying off temporary workers before full-time employees.
“I think that maybe we could get rid of the part-time and summer help before you talk about us making sacrifices,” he said.
Ockomon said layoffs only would happen if labor unions didn’t agree to other cuts, like furloughs and wage freezes.
“I don’t think that one single one of those (options) can get us there,” he said. “If we could creatively as a body come up with a solution without laying anybody off, I would love it more than you would know.”
If layoffs are needed, city officials will look in each department to determine whose services are needed, what skills the employees have and how long they have been there, Priser said.
No severance package is expected for laid-off employees, as has been the case in the past.
Other city employees offered suggestions to add revenue to the city, including charging residents for certain police and fire runs, turning the former Guide Corp. property into a sports venue and saving the Wigwam as a museum.
Ockomon said if layoffs are needed, city services could suffer.
“They’ll definitely change,” he said. “I don’t think there’s any way around that.”
Still, city officials maintained Anderson is not alone in its financial plight.
“Muncie’s got the same problems, Kokomo’s got the same problems,” Controller Karen Carpenter told city employees. “They’re making drastic layoffs, so we’re here to ask for your help.”
Contact Aleasha Sandley: 640-4805, aleasha.sandley@heraldbulletin.com.
Anderson proposed cost-saving measures
• Discontinuing longevity pay, estimated saving $723,000 a year
• Wage freeze, estimated saving $910,000 a year
• Involuntary furlough, estimated saving $1.4 million a year for one furlough day a month, $2.8 million for two days and $6.9 million for five days
• No overtime, estimated saving $2.6 million a year
• Raising insurance deductibles from $150, estimated saving $518,000 a year for a $500 deductible and $1 million for a $1,000 deductible
• Double prescription drug costs, estimated saving $310,000 a year
• Employee layoffs, estimated saving $35,000 a year per person and $1.4 million for 40 people
Source: City of Anderson
