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City employees face brunt of budget crunch
(by Sali McSherry - February 17, 2010)
City employees face brunt of budget crunch
By SALI McSHERRY
"Tightening our belts, sacrifice, but no layoffs," while trying to minimize the loss of services is what the city is facing, Pepper Pike Mayor Bruce H. Akers said at Monday meeting of the long-range strategic planning committee comprised of about 25 citizens.
City employees could take the brunt of the hardship from a $3.6 million deficit in the budget. Employees will receive a temporary 10 percent pay cut and a 1 1/2-day furlough every two-week pay period for a total of a 25 percent cut, which would begin March 1, if council approves it, according to Finance Director Prashant Shah.
The city will save about $1.1 million with those cuts, along with about $900,000 it won't be spending on its annual road program and other cuts across the budget it already has made. The city started 2010 with a cash balance of $1 million, Mr. Shah said.
The committee was headed by City Council members Frederick Taft and Gail Mayland, who was out of the country this week. The committee unanimously recommended that council place a 1.75 percent income tax on the August ballot.
Mr. Taft offered the recommendation for the committee's approval. He said it would give the committee time to develop a campaign, review the Baldwin-Wallace College feasibility study for communities sharing services, look deeper into capital expenses and "take the time to get it right."
Pepper Pike's income tax has been at 1 percent since 1971, and the city offers a 0.5 percent income-tax credit to residents working outside of the city. The tax would generate about $930,000 and the ending cash reserve for the general fund and fire levy for this year would be about $906,000, Mr. Shah said.
If the tax increase is not approved, it is estimated the city will have a combined ending cash balance of $160,000. Next year, a $2.3 million deficit is projected, but if the income tax increase is approved, the city could see a $2 million combined ending cash at the end of 2010.
Committee member Jean Seaton said she agrees with putting the income tax increase on the August ballot, as opposed to the May ballot. She praised Mr. Taft for melding the group into a team.
Last week, there initially was a rush to put the income-tax increase on the May ballot by Mr. Akers, because, if it were approved, the city would receive money in June. If the levy were approved on an August ballot, the city would not receive money until September.
But Mr. Akers said he took guidance from those he trusts who said not to rush the process, because there would not be time to thoroughly explain the dire situation to residents. If the issue did not pass in May, it could even be more difficult to get it passed in August, he said.
Committee member Michael Hardy said there was not enough time to sell the tax to the citizens for a May vote.
Absentee voting starts in about 40 days.
Mrs. Mayland said last week the city needed to make cuts in its budget before asking voters to approve an income tax increase.
Councilwoman Jill Miller Zimon had reservations about rushing to get the issue on the May ballot because she did not think the city was prepared to make the case to voters.
"It's a historic situation for the city from a process perspective that we would have to make a decision without two members," she said.
Councilman Allan Krulak, also a member of the committee, was away this week and was to miss the meeting last night (Feb. 17) along with Mrs. Mayland. In order to put the issue on the May ballot, all five remaining council members would have had to agree to do it last night because the filing deadline to the Cuyahoga County Board of Elections is today (Feb. 18).
Mr. Shah had developed a projected five-year budget to share with the committee. He projected no estate tax revenue for 2011 to 2015. Typically the city estimates about $500,000 each year, but has averaged $1.8 million for the past 10 years, he said. But, in 2009, it only received $430,000. This year, the city has received $230,000, he said.
Councilman Scott Newell said he was glad to hear the reasoning for waiting until August. It's a very wise move, he said.
Committee member Cindy Eickhoff, an Orange School Board member who has been active in levy campaigns over the years, said it was important for the committee to "speak with one voice" when answering questions and to take time to examine the issue. That's the key before going public, she said.
James Weaver, a member of the committee, said he wanted the city to weigh in on how much it would save if it contracted with Chagrin Falls for dispatch service, instead of having its own center.
Police Chief John Crivel invited committee members to visit and meet the officers so they could "put a face" on the situation. It's not just about the bottom line, he said, these officers have families. He said he is concerned the city will lose some of its top young officers, whom the city has spent thousands of dollars training, due to the cuts. Other cities are currently looking for officers, he said.
"It's a tough nut to swallow," said Fire Chief Thomas Hartman, who was concerned about the logistics of having enough manpower on each shift.
Service Director Robert Girardi said it would be rough for everybody but the service staff always would put its best foot forward.
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