For Immediate Release
City Manager FY13 budget calls for $4.3 million in reductions, eliminates some jobs
Surprise AZ (May 07, 2012)
City Manager Chris Hillman will propose an FY13 budget calling for $4.3 million in cost reductions, approximately $2.9 million of it in reduced personnel costs, which include some layoffs, and $1.4 million in department-identified savings.
The FY13 budget is the first major step in a two-year plan to address the City’s internal finances as directed by the Surprise City Council, Hillman said. The cost reductions, including reductions in force, go into effect today, he added.
“We will introduce the proposed budget to Council at its work session May 8,” Hillman said. “In coming weeks, the Council will publicly discuss the budget and may make changes.”
According to the City’s budget calendar, the Council will vote on a final budget June 12. The budget goes into effect July 1.
Hillman says the proposed budget meets Council objectives of building financial resiliency, strategically reallocating resources, keeping service levels high, achieving a restored reserve fund by 2014, and keeping Surprise moving forward and “open for business.”
The strategic cost reductions reflect internal restructuring and some reductions in force.
33 positions in the Public Works, Police, IT, HR, Fire, Finance, Community and Recreation Services (CRS), Court, City Manager and Community/Economic Development departments are being abolished. 14 of the positions are vacant.
Internal restructuring in Public Works, CRS, Community/Economic Development, Fire and Police will see an additional 19 positions eliminated and restructured. Hillman said employees in those eliminated positions may apply for the new, lower level jobs.
The result is savings of approximately $2.9 million, which Hillman says was achieved without taking any police, firefighters or solid waste personnel off the streets, without reducing recreation programs and special events and without impacting service levels in the city’s other utilities such as water and wastewater. “Our goal was to take an ‘inside-out’ approach to cost reductions and ensure residents will see little to no direct impact in day-to-day services,” he said.
“These reductions are being made strategically and in coordination with our department directors,” he added. “Again, residents will not see any reduction in our service levels or quality.”
For example, Hillman said the CRS Department was built to handle anticipated growth, but growth has slowed. “Some supervisory and management jobs will change to direct service positions at a lower pay scale. It makes management sense, it reduces costs, and we maintain the services of the affected employees who can decide to apply for the restructured positions,” he said.
“These adjustments create permanent and ongoing savings,” Hillman said. “These savings will help accomplish the Council goal of replenishing our reserve fund by July of 2014.”
“It is painful to have to eliminate positions, but unfortunately, the times call for those difficult decisions,” he said.
According to Chief Financial Officer Scott McCarty, City revenues are forecast to increase by approximately $5.8 million in FY13. Hillman says over two years, the improving revenue picture, when combined with the proposed reductions, will replenish the City’s now-depleted two month reserve fund, an estimated $13 million, by July 2014.
According to the City’s Human Resources Department, employees who lose their employment with the City will receive a severance package of four weeks’ pay plus one week for each year of service, to a maximum of 12 week total. The City will extend health care coverage for three months at no cost to the employee, and accrued leave time may be converted to cash.
Eight individuals left City employment under a voluntary severance program. Hillman says the program will also reduce FY13 personnel costs, though the impact is still being evaluated.
Hillman says the City has eliminated104 full time positions since 2009 and employees have not received merit pay increases since 2007 or cost of living increases since 2008, while absorbing increases in health care costs.
Council will hear a presentation of the proposed budget in their workshop session Tuesday, May 8 at 4 p.m. in the Surprise City Council Chambers. The meeting will be broadcast on Surprise 11 and streamed live at www.surpriseaz.gov.