Manhattan city commissioners are talking about laying off as many as 70 city employees as they consider cost-cutting measures to avert what they say is a potential budget crisis.
City officials during Tuesday’s meeting weighed options to increase the general fund. The fund’s cash balance is expected to drop from $11 million to $6 million by the end of 2024. Officials have said they like to keep the cash reserve above $10 million.
Commissioners have initially targeted a combination of staff reductions and tax increases. Personnel currently makes up around 70% of the general funds’ expenses. Commissioners are looking at cutting 35-70 staff, with limits of 36-32 hours a week for remaining staff. This is predicted to save between $1 million-$4 million a year.
City staff also suggested that putting a 1% sales tax increase on the November ballot to fund a proposed indoor aquatics project would free up money in the general fund. That proposal calls for putting the sales tax money into a separate fund for parks and rec.
Commissioner Jayme Minton said adjustments need to be made on the proposed project in order for it to pass.
“I strongly think if we’re putting something on the ballot, we need to put something on there that we think will pass,” she said. “I think that’s what we need to do. And so I think in workshopping that with the alternatives will be really important. I appreciate us getting this going now and not waiting til August to have those discussions.”
The tax would be for 20 years, and if passed would be a net .75% increase after the city ended the current .25% tax, which would free up $5 million-$6 million in the general fund. City officials said they believe the parks and rec department would also accumulate cash over time and eventually operate like an enterprise fund.
Another option is dipping into $4 million in city ARPA funds. The city also plans to halt replacing vehicles and equipment through the end of 2025. It may also halt capital improvements, filling vacancies and pay increases.
Interim city manager Jason Hilgers proposed a multi-pronged approach that involves cutting $2 million in expenses: laying off 47 employees and reducing 75% of the general fund work force to 36 hours per week; “recapturing growth” from last year’s mill levy; and putting the indoor aquatics sales tax on the ballot.
Commissioner John Matta proposed a 6% increase in funding for the Social Services Advisory Board (SSAB), but fellow commissioners Peter Oppelt and Minton disagreed because of all the proposed personnel cuts.
Oppelt said…
“On one hand, yes, I understand the requests for increased pay and things like that. But then on the other hand, we’re looking at freezing pay for general city staff. So how do we justify that with city staff not getting a pay raise, but all the police officers are? So to me it’s either do we either give everyone increases or no one? That’s really more of the fair way to look at it.”
Oppelt said the commission should consider setting a policy on cash balance. He said he might support a minimum of about $8 million to balance other cuts.
“We’re talking about it affecting our neighbors directly,” he said. “I would really like to avoid negatively affecting pay to our staff.”
Commissioner Karen McCulloh pointed out that the cash balance affects things like the city’s bond rating and ability to finance projects.
Minton said she wanted to move the $4 million ARPA funds to the general fund for the cash balance. Matta and Oppelt agreed with that.
Commissioners were four hours into the meeting by the time they reached this topic, so they tabled the issue for a future meeting.
Mayor Susan Adamchak asked for a draft policy resolution on the cash balance.
“I believe there is some support for the possible scenario you’ve provided here, though perhaps not in its entirety,” she said.
The post Cuts looming for city staff as Manhattan looks to increase its cash balance appeared first on News Radio KMAN.
