Balancing 1980 Budget
..
.
MEMORANDUM #80-3
TO:
FROM:
DATE:
SUBJECT:
City Commission
City Manager
Ap r i 1 4, 1980
Balancing the 1980 Budget
The adopted 1980 budget, adopted by the Commission in August, 1979, was balanced <-
between revenue and expenditures. It is apparent that revenues will not be
sufficient to finance the level of expenditures established by that budget.
This fact has been apparent for some time. The short falls in revenues are
caused by a combination of circumstances. Listed below are short falls of
revenue:
TABLE I
SOURCE
SHORTFALL
Schill ina Manor Tax Case
Building Permits
Franchise Tax
10% Li quor Tax
TOTAL
$80,000
60,000
65,000
45,000
$250,000
The assessed valuation for Schilling Manor was included in determining tax
rates for 1980. Unfortunately, Saline County District Court has ruled Schilling
Manor is not subject to property taxes in 1980. The net result is $80,000
lower property tax receipts.
As is well known, building activity is down in Salina, as indeed it is nation
wide. The net result produces an estimated building related receipts of
$50,000, which is $60,000 less than the budget of $110,000.
The 1979 legislature adopted a 10% tax on the sale of liquor in Kansas' private
clubs. The City utilized the revenue estimates from the State Department of
Revenue. We have received the first collections and estimated that tax will
provide a revenue short fall of $45,000. The combination of conservation and
a relatively mild winter will produce a short fall in franchise tax fees of
approximately $65,000.
Not I ne 1 uced in the tot a 15 above is the I eve I of property tax co 11 ect ions. In
the past, city has collected better than 99% of property taxes levied. Normally,
during a recession, property tax collection declines somewhat. That may not
happen this year, but it is likely. Each 1% decline means a shortfall in tax
supported operations of about $30,000.
It has been apparent for some time that the City would be short in revenues in
1980. To reduce the impact, a hiring freeze on tax supported, that is general
fund programs, has been in effect since January 22, 1980.
Currently there are 13 vacant positions that were short because of resignations,
retirements, and the I ike. Those pos.itions are 1 isted below:
..
,
..
TABLE II
DEPARTMENT
POSITION
Engineering (2)
Engineering Technician
Engineering Aide
Fi re (2)
Park (2)
Firefighter
Laborer
Pol ice (3)
Police Sergeant (1)
Police Officer (2)
General Services (4)
Maintenance Worker (2)
Concrete Finisher (1)
Laborer (1)
It is evident that natural attrition will not be sufficient to overcome the
shortfall in revenue. The City's general fund has approximately 75% of its
resources devoted to personnel. It would seem that the most effective way to
make the necessary reductions will be through personnel.
GENERAL FUND VS. OTHER FUNDS
There is a great deal of confusion surrounding City activities. Property
taxes support the general fund items. The departments financed out of the
General Fund are as follows:
City Commission
City Manager
City Clerk & Finance
Legal
Municipal Court
Bui Idings
Engineering
Fi re
Permit & Inspection
Park
Po 1 ice
Street
Human Relations
Traffic
Swimming Pools
Administration & Planning
Insurance & Contingencies
Arts Commission
Cemetery
General Improvement
Publ ic Health
Industrial Development
Noxious Weeds
Tree Maintenance
Flood Works
Human Resources
There are approximately 249 full-time employees in general fund activities.
All other City programs aren.ot tax supported and any action taken in those
departments does not affect the shortfall in general fund revenues.
These departments are supported entirely by fees collected. They are as
follows:
Sanitation
Parking Meters
Golf Course
Sol id Waste
Special Gas
,,_ Water & Sewerage
,.
In addition, the Bicentennial Center and the Neighborhood Centers, except for
the director, are financed out of Revenue Sharing and not from tax funds.
These activities have approximately 142 employees.
There are 14 vacancies in these enterprise funds. These are detailed below:
Sanitation (2)
Laborers (2)
Paper Recycl ing
Laborer
Human Resources (3)
Recreation Supervisor
Neighborhood Center
Activities Coordinator
Custodian
Bicentennial Center
Custodian
Water & Sewerage (7)
Lead Maintenance Workers (2)
Maintenance Workers (4)
Sewer Plant Operator
PROPOSED COURSE OF ACTION
There has been a General Fund hiring freeze since January 22, 1980. This
hiring freeze has produced 11 of the 13 vacant positions. The other 2 positions
happened between January 22 and April 1.
The City staff and I have carefully reviewed possible alternative methods to
meet these revenue shortfalls. We have decided to recommend.a combination of
reductions in City staff and postponement of other expenses to produce sufficient
savings during the 1980 year to balance the budget.
We propose that the City General Fund departments be reduced by 12 positions.
The department heads have decided upon the following reductions:
.---/
DEPARTMENT
POSITION
City Manager (1)
Department of Finance (1)
Fire.Department (2)
Police Department (2)
Secretary
Senior Clerk
Firefighter (2)
Clerk I (1)
Humane Officer (1)
Park Department (1)
Building Inspection (2)
General Services (2)
Laborer (1)
Inspectors (2)
Laborer (2)
P I ann i ng (I)
Planning Technician (1)
TOTAL
12
fI'
",'
The reduction will be effective April 4, 1980.
When combined with the 13 present vacant positions, this makes the total
vacant positions in the general fund of 25. This is a 10% reduction in the
general fund authorized staffing of 249 positions. After paying vacation and
two weeks termination pay, these vacant positions will result in a budget
savings of approximately $180,000 in 1980. I anticipate that these positions
will not be funded in the 1981 budget, although certain real ighments may be
possible.
Based upon a tt r i t ion and reductions the following staffing patters results:
DEPARTMENT AUTHORIZED REDUCTION PERCENT
City Manager 5 1 20
City Clerk 9 1 11
Municipal Court 3 0 0
Bu i 1 dings 2 0 0
Engineer 9 2 22
Fi re 71 4 6
Inspection 6 2 33
Park 16 3 19
Po 1 ice 73 5 7
General Services 44 6 14
Planning 4 1 25
Arts Commission 2 0 0
Human Resources 1 0 0
Human Relations 2 0 0
City Attorney 2 0 0
249 25 10%
# .
, The second part of the proposal is to postpone expenses. These are delained in the
table below.
TABLE III
DESCRIPTION
Police Cars
Out of State Travel
City County Health
City-County Butlding
Salina Arts Commission
( .::: c~..,-, c.' (), ~ '
Water and Scwerege v.) .',
-:,j. ~'.
$60,000
3,200
5,000
2,300
1 ,000
10,000
8,900
Total
$90,700
NON-TAX SUPPORTED PROGRAMS
The financial condition of the non-tax supported programs are similar to the
General Fund, although the condition is not as acute. I recommend a hiring
freese in those departments also. There are 142 positions and 14 full-time
positions are currently vacant.
EXCEPTIONS TO THE HIRING FREEZE
All full-time positions in all city are frozen with one exception. Sanitation
employees have a relatively high rate of turnover and thes~ full-time positions
will not be subject to the freeze. Sanitation services are paid from fees and
do not involve property taxes.
The Bicentennial Center and the Park and Recreation programs utilize many
part-time and seasonal personnel. These positions would not be subject to a
hiring freeze. The park and recreation programs are now entering their busy
season and, in the slow season the temporary and part-time employees are not on
the payroll.
Likewise at the Bicentennial Center part-time personnel are utilized primarily at "
events and are not on the payroll except on those occasions.
THE EFFECT
The effect of these reductions will, of course, be a lowering of services. There
will, however, be no reduction in the level or quality of emergency response by
either Police o~]Fire Departments.
The General Services Department will provide less frequent street sweeping and
other routine maintenance. The downtown area presently is swept on 5 days
a week schedl:lle, that will be reduced to Mondays, Wednesdays, and Fridays.
Neighborhoods will be swept every other month rather than monthly as is the
present practice.
, .
The level of mowing and grounds maintenance in both parks and city rights-of-way will
be reduced.
Building activity is, of course, low at the present time and the reduction in
inspectors will not adversely affect that program immediately.
The administrative reductions will certainly not have as an apparent
effect on City services as those in the operating departments.
The net result is to reduce the City work force approximately 10%. The City staff
has not prepared the 1981 budget, but I anticipate that the General Fund
reductions will be permanent although some realighment is possible. Also,
reductions in the staffing pattern for the non-tax supported activities will be
permanent, although that may also be re-adjusted slightly.
I want to assure the Conmlssion that these reductions, although painful, are
necessary and the City staff will continue to provide excellent services to
the citizens.
Rufus L. Nye
City Manager