Crucial decisions ahead
Mike McCormick, Shawnee News-Star
Shawnee city staff and commissioners are facing some crucial decisions. Over the next few weeks, they must decide about furloughing some city employees, possibly closing city hall at least one day a week, and other measures to ensure the city remains solvent.
Declining sales tax revenues are the culprit. As city manager Brian McDougal pointed out, people are shopping less, particularly for the big ticket items. He consistently sends the message of "Shop Shawnee."
In order to make the budget balance, the city has pretty well depleted its savings account. The city manager stated the funding balance, or money saved from the previous year, was $1,288,879 entering fiscal year 2009-10, he said.
He predicts the proposed budget for the 2010-2011 fiscal year, which begins in less than two months, likely will begin with a funding balance of $225,672. That is dangerously low, and the city could be in a precarious situation unless some major and drastic measures are taken.
Salaries and benefits account for 86 percent of the general fund budget. McDougal acknowledges that has grown from roughly 8o percent. Not many private sector businesses would stay operating very long with that amount of its revenue going to personnel costs.
Even though the city has held up filling positions and finally instituted three percent cuts a little more than two months ago, the financial stability of Shawnee government remains at stake.
City officials have not furloughed anyone, even though they considered forcing employees to take two holidays without pay. They backed off that proposal, however, and instituted the three percent cuts to all non-union employees.
Obviously, with the continued decline in sales tax collections since February when they made that decision, that has not improved the city's financial outlook. It has only worsened because the economy is not rebounding. Too many people are without jobs still, and citizens appear not to have the confidence to resume shopping and spending at the level needed to help replenish city coffers.
As painful as it might be, city officials and commissioners should look at cutting some city employees. Just not filling empty positions, instituting a three percent pay cut for nonunion personnel and police agreeing to two furlough days each is not improving the city's overall financial status.
We understand the effects that layoffs have on employees and their families, but they have become a sad reality in the current economy.
There are different methods of dealing with a crisis. Furloughs provide a short-term solution. We have a long term crisis and that calls for more drastic action.
The private sector has been faced with making cuts for more than a year and a half, in addition to instituting furlough days and taking other substantial measures to adjust to declining revenues. It's time for the city to do the same, until at least the local economy rebounds significantly enough to put the city on more stable financial footing.
Posted on Mon, July 19, 2010
by Jennifer Gilliland