Council members propose layoffs
Reduction in management positions sought
A handful of city of Newark employees could lose their jobs next year if a few council members get their way.
The staff reductions – which would only affect management-level employees – were brought up Monday during a hearing on the city’s 2018 budget.
“It’s not easy, it’s not popular, but it’s necessary,” Councilman Jerry Clifton said.
Council rejected the proposed budget Monday, citing concerns over the size of city government and a proposal to finance capital projects through debt financing.
It failed by a vote of 3-4, with Clifton, Chris Hamilton, Mark Morehead and Jen Wallace opposed. Acting City Manager Tom Coleman will make revisions to the budget and bring it back for a vote next month.
The $87.4 million budget contains no tax hike or increases to water, sewer or electric rates. It does, however, include the monthly stormwater fee that was approved last month. Under the fee, residents will pay between $1.77 and $5.31 each month, which for the average resident is akin to a 7 percent tax increase.
“This is a conservative budget we feel will provide a solid foundation for the next city manager to build off as they develop their vision for where Newark heads from here,” Coleman said, urging council to approve the budget Monday. He called this year the longest and most public budget process in the city’s history, noting that it began in July when council began hearing budget requests from each department.
It quickly became apparent, though, that a majority of the council still had concerns.
A major sticking point was the cost of personnel. Salaries and benefits add up to $32 million, or approximately 37 percent of the budget.
The 2018 budget includes no new positions, but personnel costs are up 4.4 percent from last year, mostly due to raises dictated by union contracts and an increase in the city’s contribution to the pension fund.
The city’s workforce has increased 6 percent – from 234 employees to 249 – in the past decade, Coleman said.
Clifton, who made concerns over growing personnel costs a central part of his campaign in April, said he would like to see the city cut at least $300,000 in personnel costs from the budget.
In an interview Tuesday, he said he has four positions in mind, but declined to name them out of respect for the individual employees. Clifton said those positions are “unique positions” that involve duties that can be reassigned.
“They’re unique enough that there are some good options for cross-training other people to do those jobs,” he said.
He said the process of considering layoffs is “emotionally draining.”
“You’re not out to hurt the employees; you’re out to do the best thing for the city,” he said.
Both Clifton and Morehead are targeting management employees, not those lower in the organizational chart.
“I’d like to put a stake in the ground and settle all the people who think they’re going to lose their jobs tomorrow morning,” Morehead said. “We aren’t talking about the front lines.”
He noted that council can only directly affect management positions. He declined to provide a number of cuts he wants to see but said it is less than six.
“I’d like people to understand we aren’t talking about the folks that are digging ditches and the folks that are keeping us safe and the folks that are pumping water and so forth,” he added. “We’re talking efficiencies and some redundancies.”
However, Coleman warned that reducing the city’s workforce would have consequences.
“There aren’t people here that are just sitting around waiting for something to happen,” he said. “If we reduce personnel, we’re going to have to reduce service.”
Councilman Stu Markham had similar concerns.
“People equal service,” Markham said. “We always talk about ‘committed to service excellence’ and how great our people are. I worry how do we maintain that if we don’t have the people.”
Another concern from some council members was the proposal to change the way the city funds the capital improvement plan, which includes expensive projects meant to serve the city for many years. Rather than paying for the projects with cash in this year’s budget, the city would use bonds and loans that could be paid off over a number of years.
The CIP is approximately $14.7 million and under the proposal, $7.7 million would be financed through bonds and loans, and $1.4 million would be funded with current revenue, with the rest covered by grants, reserves and other sources. Last year’s budget funded $4.1 million of the CIP with current revenue.
Doing so would require taxpayers to approve a referendum authorizing the city to take on debt. The city is already planning a referendum on the Rodney stormwater project next June, and the CIP bonds likely would be placed as a second question on the same ballot.
“The city has maximized its ability to utilize the ‘payas-you-go’ method of funding capital projects,” Finance Director David Del Grande said. “It has come to the point where Newark’s capital program will need to be frozen until we are able to use either secure bond financing and/ or the state’s revolving loan program to provide fiscal relief to funding its long-term projects.”
Several of the council members said they support using bond funding for big-ticket items like the Rodney stormwater project but not necessarily small items. Coleman’s proposal uses bond financing for a number of smaller-scale projects, such as new playground equipment and updated surveillance cameras.
“My comfort level is a little wobbly with funding these smaller projects,” Wallace said. “I’m concerned we’re setting a precedent.”
Morehead compared bond financing to a resident taking out a bank loan, “which makes sense for things like my house, not for things like my grocery bill.”
Clifton used a similar analogy.
“You don’t pay your food bill on credit card, and I see this as doing just that,” he said. “I’m extremely uncomfortable.”
Coleman also proposed monthly service fees of $1 each on water and sewer bills as a way to recoup some of the fixed costs of providing the services, though the budget is not dependent on those fees.
“Technology, the conservation of resources and education has led to lower consumption by those we serve, resulting in the inability to properly recover the revenues necessary to meet our expenses,” Coleman explained at an earlier budget workshop. “Infrastructure needs to be there regardless of usage levels. Alternative energy users still rely on the city’s grid.”
He also proposed a $1-perhomeowner fee to help increase the city’s subvention payment to Aetna Hose, Hook and Ladder Company from $74,000 to $224,000. Aetna is a mostly volunteer fire department and has seen its calls for service increase while its funding has declined.
Council will discuss the budget again during a special meeting on Dec. 4.
Councilman Jerry Clifton said he has a plan to eliminate four positions and redistribute those duties to other employees.