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Pay reductions, not layoffs proposed to address deficit

By Bill Short

 Flag City LogoThe Millington Board of Mayor and Aldermen has proposed salary reductions rather than layoffs for city employees to address a projected revenue shortfall.

Board members reached that consensus during a March 19 work session on the budget at City Hall.

Noting that he has received some feedback from city employees, Alderman Frankie Dakin said he believes they would like to “go with a little less” before they see their co-workers “get the ax.”

Rather than talking about individuals losing their jobs and city services being cut, Dakin said he thinks the board should consider “rescinding” the 3-to-5-percent pay increases that were implemented during the previous fiscal year.

City Manager Thomas Christie said that, if the board takes back the 3-percent increase and does not extend it into the upcoming fiscal year, it could theoretically save $150,000. And rescinding the 5-percent increase for city department directors would amount to approximately an additional $10,000 to $15,000.

“The problem is that three-fourths of the year is over,” he noted. “Those 3-to-5-percent raises have already been paid out. So, all you’ll be gaining this year will be one-fourth of that.”

The layoffs were proposed by Christie, who told the board at its March 5 meeting that he was projecting a $598,000 revenue shortfall for the current fiscal year. Because of $219,000 in projected expenditure reductions, he forecast a deficit of $379,623.

“Since then, we’ve also brought it down an additional $42,000,” he told the board members at the work session. “So, your total is $261,000 that we’ve already identified.”

For the remainder of the current fiscal year, Christie said, the board is looking at approximately a $300,000 to $330,000 shortage. But the “difficulty” is that it “burns” that much more of the city’s fund balance before the upcoming fiscal year begins.

Alderman Chris Ford, who is also Millington’s vice mayor, acknowledged that the board has its “work cut out” for it. But he noted that the city did not get into this position overnight.

“I’m not going to agree to lay off anybody sitting out here because of what happened over a long period of time,” he said, eliciting applause from the audience. “We didn’t create this yesterday. It will take us some time to get this thing right.”

While noting that the city may be “top-heavy” in its total personnel, Ford said attrition may “take care of” much of that. But he acknowledged that it is not going to take care of it “tomorrow.”

Alderman Mike Caruthers said he will not agree to anything that will affect the “essential services” to the public.

If the board is not willing to consider layoffs, Christie said, then it has no other alternative than to continue to take money from the city’s fund balance, unless it wants to explore revenue increases. He said he is “fine” with whatever the board wants to do.

“I won’t be able to recommend it,” he noted. “I’m emphatic about that, because it’s not fiscal good sense.”

Christie said he and City Finance Director John Trusty need to have a decision by the board, because they are attempting to prepare the budget for the upcoming fiscal year, which will have a projected deficit from the fund balance.

Alderman Thomas McGhee said he would like to see what impact rescinding the 3-to-5-percent salary increases will have.

“I’d rather not have anybody lose his job,” he noted, “and I’d rather not take back money that we’ve given. But there has to be some adjustment. If not, we’re going to burn through the Reserves.”

Alderman Hank Hawkins acknowledged that the city’s employees will not be happy about it. But he believes going with “a little less” is better than having nothing at all.

While she also supports salary reductions rather than layoffs, Alderman Bethany Huffman noted that the board has talked for years about how Millington employees are underpaid. She said the 3-percent increase was designed to “get them in line,” so the city would not be a “training ground” for other municipalities.

Because the training costs are almost equal to the employees’ payroll, Huffman said she wanted to make sure the board is not “shortsighted” in doing the pay reductions rather than other things.

“If we do that, and we end up losing really good employees,” she concluded, “then all we end up doing is having to retrain people, which actually hurts the services we’re trying to protect.”

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March 2013
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