Saturday, February 16, 2008

City announces hiring freeze, budget cuts

In an interview with Jason Wert of our Mayor Pro Tem Gary Deaver decreed that the city has a balanced budget and is required to have one. In understanding how the budgeting process works the city based on the best criteria possible proposes a budget based upon ASSUMPTIONS of revenue that MIGHT be generated. This my dear friends isn't a balanced budget unless the revenue projected is ACTUALLY received

© 2008, Springfield News-Leader

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Springfield city government has been placed under an immediate hiring freeze, and city departments are being asked to cut their budgets by 7 percent because of an unexpected drop in sales tax revenue.

Deputy City Manager Evelyn Honea said today that city department heads must have their proposed budget cuts in by next Friday. She confirmed a hiring freeze was in place and would remain until the budget shortfall was fixed.

“The hiring freeze is putting some departments in a bind,” Honea said. “The fire department had five firefighters they were ready to make offers to, but we’ve asked them not to make those offers until this is resolved.”

The city has four other open positions affected by the hiring freeze.

Honea said she and City Manager Bob Cumley will review the proposed cuts and deliver a report to the City Council in March.

It will be up to the council to decide how to proceed, but she said the city needs to cut at least $4 million, she said.

While gearing up for the 2009 budget, the city had projected sales tax revenue would increase 3 percent, but it actually decreased 1 percent.

Honea said the city also was facing a $3.5 million shortfall in its contribution to the police and fire pension fund. The only way to solve the combined shortfall is to reduce the city’s general fund budget by 7 percent, she said.

In 2008, the $41 million general fund made up slightly more than half of the city’s $70 million total budget. Fees and revenue from other sources make up the rest.

Honea said it’s too soon to know exactly how department heads will meet the 7 percent budget cut goal. But cutting employees is likely to occur.

“Seventy three percent of the general fund supports personnel,” she said. “You can’t raise $4 million without cutting personnel. We hope to do it through attrition. We don’t plan on any layoffs.”

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