Starkville aldermen will consider a proposed $737,500 in cuts to the city’s budget to start to make up for what Mayor Lynn Spruill said she anticipates to be a $1.3 million sales tax revenue shortfall due to the COVID-19 coronavirus pandemic.
The cuts include a 20-percent pay cut for the mayor, board of aldermen and all city department heads and a furlough of 15 percent of the city’s employees, both until further notice.
Spruill’s salary (an annual pay of $75,000) would be cut by $1,250 per month with this measure. The aldermen, now with an annual salary of $20,000, would see their pay slashed by roughly $333 per month.
Other cost reductions include reduced gas and oil usage, forgoing training in some departments and choosing not to open the Moncrief Park pool or hire seasonal Parks and Recreation staff, Spruill said at the board’s Friday work session.
“We took $500 back, we took $250 back, we took $5,000 back, so every little bit of this added up to get us to the point of $737,500,” Spruill said. “Even though the governor may open the city back up, that doesn’t keep us from having experienced this revenue loss that we’ve got to make up, so there are several things I am recommending that pain me greatly to do so.”
The proposed cuts are the second round of cost-savings measures after the board voted April 7 to suspend pay raises the board approved for some city employees in September, suspend all travel and equipment purchases except for ongoing projects and enact a hiring freeze with the exceptions of two critical jobs.
Each measure is set to last until June, but the board will consider extending them through the end of fiscal year 2020, or the end of September, according to Tuesday’s meeting agenda.
Who to ‘do without’
Spruill initially wanted to propose two pay periods of staff furloughs but decided during the work session, at some aldermen’s encouragement, to leave the potential furloughs open-ended.
The difference between a furlough and a layoff, city human resources personnel officer Navarette Ashford explained, is that furloughed employees are still on the city’s health insurance plan while laid-off employees are not.
Spruill said it is up to the department heads to decide who to furlough based on who they can “do without” while still maintaining functioning departments. The furlough quota is 47 of the city’s 306 employees, 35 from departments paid for by the city’s general fund and 12 from the sanitation and utilities departments, which are paid by the enterprise fund.
The police and fire department furloughs will be solely in administrative roles, not “boots on the ground,” Spruill said. Starkville Police Chief Mark Ballard said some responsibilities would be re-delegated as a result.
“Anytime we can apply technology to assist us and handle our losses, we’re going to,” Ballard said. “Some of the losses (might) be felt in quality control, and some other units are going to be tasked with extra duties.”
The criteria for choosing who to furlough in Parks and Recreation include an employee’s salary, seniority, role in the department and past disciplinary actions, interim executive director David D’Aquilla said. Other cost savings come from park maintenance, such as cutting the grass less frequently. Keeping the Moncrief Park pool closed means saving about $50,000, including on chemicals and lifeguard staff, if it stays closed all summer, he said.
Thinking ahead to next year’s budget
Spruill said the board will start preparing the Fiscal Year 2021 budget sooner than it normally would, perhaps as early as May, due to the revenue shortfall and the city’s responses. She also said she is willing to tap into $450,000 of the $1.5 million fund balance that is usually left over at the end of every fiscal year.
“While that sounds like a lot, it won’t take anything if this continues to suck that dry,” Spruill said. “I’m loath to do it, but I think this is one of the places where we can pull at least some funding.”
Ward 5 Alderman Hamp Beatty suggested using the city’s “rainy day fund” (fund balance) at the April 7 board meeting but was the only one to support the option. He said Friday that “this is what rainy day funds are for.”
Ward 2 Alderman Sandra Sistrunk, the board’s budget chairperson, said the board will keep evaluating the city’s finances every two weeks and keep “trying to make cuts as painless as possible.”
“Things continue to change and I’m (also) loath to dip into the cash reserves that we’ve built up through the years, mostly because it delays the inevitable,” Sistrunk said. “If we spend those up this year, when we begin our budget for next year, we’re already in a hole.”
Congress passed a $2 trillion COVID-19 relief package last month that provides funding for large cities, large businesses and small businesses, as well as improved unemployment benefits, but does not designate any funds specifically for small cities. Sistrunk said she had been hoping the federal government would provide or at least indicate any upcoming funds for small cities by now, but there are still no such funds.
The board passed a 10 p.m. to 5 a.m. curfew on April 7, originally in effect until April 20 in line with Gov. Tate Reeves’ “shelter-in-place” order that began April 3. Reeves extended the order by a week on Friday, and the city’s curfew was set up to automatically extend with it.
Even so, the board will consider a resolution “in the interest of clarity” at Tuesday’s meeting to make it clear that the curfew will remain until April 27, city attorney Chris Latimer said.
The resolution will also state, as Reeves said Friday, that “nonessential retail” businesses can serve customers via drive-thru and curbside pickup as restaurants are already doing, Latimer said.
Sistrunk praised the change as a benefit for small businesses in Starkville.
“It won’t help us that much, but it will help us a little bit and it will help them greatly,” Sistrunk said.