Because of what it calls a financial perfect storm, the city of Sarasota is considering a number of steps to create a balanced budget, including more layoffs, a wage freeze, a two-week furlough, a pension reduction and more.
“We intend to give you a balanced budget in July,” City Manager Bob Bartolotta told the City Commission during an April 23 budget meeting. “But the biggest concern I hear (from our staff) is matching budget cuts with community expectations. We have to start saying ‘no’ to new services.”
The city is expecting property tax revenue for the 2009-2010 fiscal year to come in 20% — or $4 million — below estimates. Its other sources of revenue, such as the gas tax and half-cent sales tax are expected to be $2.6 million short of expectations.
“That’s trouble,” said Chris Lyons, the city’s finance director, who said he couldn’t remember a budget crisis such as this during his 20-plus years with the city.
To deal with unprecedented budget problems, the city is considering unprecedented measures. Bartolotta and Lyons told commissioners they were going to have to consider asking employees to forgo raises next year and go unpaid during a two-week furlough period, which equates to cutting their pay by about 4%.
Lyons said he doesn’t believe the city has ever taken either of those steps. It would cost the city $1.8 million to give each employee a raise next year.
And, although it eliminated 127 jobs in the past two years through attrition and layoffs, the city will consider laying off more employees and cutting vacant positions.
“We’ve never seen a budget year that started with a deficit,” Bartolotta said.
Other perks that could be cut are pensions and post-retirement health-and-life insurance.
Before 1993, the city promised employees free medical coverage and discounted coverage for their dependents even after employees retired. That policy changed in 1993, but employees hired before then are still entitled to that retirement benefit. The city will be taking a large hit for the next 15 years if a change is not made.
The city’s health-coverage expenses were a little more than $6 million last year. Because of the pre-1993 retirement benefit, that cost will rise to about $15 million before it levels off in 2023.
Pension costs are estimated at $9.1 million next year if nothing changes.
Lyons said city commissioners would have to consider reducing those benefits to help balance the budget.
Another perk the commission will need to analyze, said Bartolotta, are bonus days. City employees are entitled to five days off per year, called bonus days, if they don’t use any sick days. They are allowed to accrue those bonus days during their entire careers at the city.
Employees can also earn up to six days off per year by participating in the Run/Walk/Swim Program, which gives workers those days off if they hit certain exercising milestones.
“We’re going to have to look at all time-off programs,” Lyons said.
The city will also look at new sources of revenue. One possibility Bartolotta mentioned was charging non-residents for car-accident investigation.
“We could bill them, and it’s covered by their insurance,” he said.
Sarasota residents would not be charged, because their taxes already pay for it, said Bartolotta.
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