Layoffs, cutbacks loom as city scrambles to right budget

Published: 11/25/2007 ET
By Zach Church
Staff writer

Lawrence - The city is in a five-week crunch to justify and fix a series of budget errors, lest it be forced to make "strategic cuts" that could include scaling back on overtime, not filling open city positions and possibly laying off city employees.
To avoid the cuts, the City Council will have to pass water and sewer rate increases and boost a long list of service fees, Budget Director Mark Andrews said.
Andrews delivered a draft proposal of budget adjustments to the City Council and go be before the Budget Committee Tuesday to urge them to push it forward.
His message to the council: "Put stuff in it. Take stuff out. But don't take too much out."
And do it quickly. The budget correction package has to be passed by year's end or tax bills that go out in January won't fund the budget.
The push comes after word from the state Revenue Department that Lawrence's $240 million fiscal 2008 budget is marked by a number of "problematic findings," according to a letter from the state. Overall, the state identified $14.7 million in shortfalls that need to be addressed.
How many and what type cuts will be made are still undetermined, but layoffs are "on the table," Andrews said. Also on the table are changes to contractual stipulations like employee vacation buyback, which allows city employees to forego vacations in exchange for extra pay.
City Council President Patrick Blanchette called the letter from the state "alarming," and a sign that the city budget is "out-of-whack." He said it is a message from the state to the city to get its act under control.
"The letter is very, very difficult to swallow, but it's fact," Blanchette said.
He, too, said everything, including layoffs, is being considered to pull the budget back in line.
"I think it goes to show the Band-Aid approach that the city of Lawrence has been taking for the past couple of years, and we can't keep going to bigger bandages," he said. "The cut is getting too deep."
In one case, the city had budgeted $3.2 million as income for three city properties up for sale - but the properties have not been sold.
In another, estimated income from license and permit fees is based on increases never passed by the City Council. State auditors suggested that the city boost water and sewer rates to meet funding goals there.
Andrews' plan addresses the state's findings point by point and includes a water rate increase of 60 cents per hundred cubic feet and a sewer rate increase of 75 cents per hundred cubic feet, bringing them up to $3.10 and $3.35 respectively. Both would take place in steps, with rates going up 10 or 15 cents every six months until July 2009.
Those increases would be well overdue, Andrews said, pointing out that rates are higher in many similar cities. He said water rates didn't increase significantly when the city borrowed money and began building its new water treatment plant two years ago.
"I'll show (the council) that we've been bleeding for quite some time," he said.
City Councilor Gilbert Frechette, who sits on the Budget Committee, said he'll wait until seeing the full plan Tuesday to pass judgment, but will be especially interested in what is suggested for water and sewer rates.
"I thought that when we passed the budget the numbers in there were correct, and it turns out that they're not correct," Frechette said. But a rate increase may be a must, he said.
"I think it's difficult to do, but we have to look at it seriously, because I don't think the Department of Revenue will allow an enterprise fund (like water and sewer) to run in the red," he said.
The plan also includes fee increases for everything from photocopy charges to fireworks permits and inspection fees. If passed, those increases would bring about $600,000 a year to the city, Andrews said. In many of those cases, Lawrence currently charges less than surrounding communities, he said.
"We're not looking to make money on marriage certificates or building permits," he said, mentioning two more possible fee increases. "We're just trying to absorb the fair market value."
Blanchette said he will support the increase, which he believes should have happened years ago. The water and sewer rates also need to go up, he said. He's hesitant, however, to vote for an increase without being assured that residents are being assessed for actual use, as opposed to an estimate.
On the immediate chopping block is police overtime, though it is unclear exactly how much money can be saved. The city spent about $1.2 million in officer overtime last year. This year's budget allows for only $730,000.
Andrews called that pay a "big-time problem" and a "tough one" to bring under control. He said reductions will require a hard look at how overtime money is spent. There may be a better way to schedule overtime, he said.
But police officials said they've already scaled back overtime as far as they can. Much of the overtime costs are unavoidable, they said. An officer may make an arrest near the end of a shift and have to stay late to finish a report. Or an internal affairs detective may be called to a late-night scene.
"We understand the limitations that the city has, but quite frankly, our overtime is nondiscretionary," police Chief John Romero said. "We're looking at ways to cut. Anything that's not required, we're not doing.
"It's not that we're over in overtime," he said. "The problem is that we're underfunded every year."