City spending plan calls for elimination of 14 jobs

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November 6, 2008

BY MIKE FAHER The Tribune-Democrat Thu Nov 06, 2008, 11:29 PM EST

In the convoluted world of Johnstown city finances, there may be only one question with a simple answer:

Can the city afford to maintain its current work force?

“The answer to that is clearly ‘no,’ ” said Jim Roberts, a lawyer who coordinates the financially distressed city’s recovery process.

As officials consider their 2009 budget, the issue at hand is whether job cuts should happen now or later – and how many will be necessary.

City Manager Curt Davis’ proposed spending plan calls for eliminating 14 positions in order to save more than $500,000. That will allow the city to avoid a property-tax hike, Davis has said.

Retirements could play a role: The more workers who leave voluntarily, the fewer who will have to be furloughed. But officials cannot be sure how many retirements there will be, and City Council must adopt a 2009 budget by the end of this year.

City Finance Director Mary Lou Johnston on Thursday pitched a plan to bridge that gap: Insert a line in the budget for what she called a “vacancy allowance.”

That would allow officials to monitor city finances as 2009 progresses.

If more than a few employees retire, or if the city’s revenues are higher than expected, administrators would not have to furlough as many workers.

“We may have to lay people off or let them go after the first quarter or the second quarter of (next) year, but that decision wouldn’t have to be made now,” Johnston said.

“I think it would be a positive way to approach this.”

Some council members concurred.

“There are people who are going to lose their jobs (at this point),” Councilman Nunzio Johncola said. “If there’s a way and an opportunity for that not to happen, I’d like to take a look at it.”

But not all were sold on the idea.

Councilman Jack Williams noted that, in the past few years, City Hall administrators have a poor track record of keeping council up to date on financial shortfalls.

Williams is arguing that layoff decisions must be made now to ensure that the city is living within its means next year.

“You fund what you can afford,” Williams said.

He added that, if the city’s fortunes improve during 2009, jobs that had been cut could be restored.

Council members did not vote on the matter Thursday but will consider it at their Wednesday meeting.

Also at that session, officials will debate how they should fill a hole of up to $5 million in this year’s budget.

Bills – including repayment of a $3 million tax-anticipation loan – are coming due before year’s end, and the city has no money to pay them.

Davis has advocated taking out a $5 million loan, and he needs a decision relatively quickly:

Such a loan must be approved by council, a county judge and the state Department of Community and Economic Development.

The loan would be repaid over the course of 10 years, Davis said.

But some on council are balking at incurring more debt, instead advocating that the city cover this year’s shortfall by spending $4.8 million left over from a 2006 bond issue.

“It’s unfair to future councils and taxpayers to saddle them with long-term debt,” Williams said.

There are concerns, however, that by spending that cash the city leaves itself no money to cover emergency expenditures.

“I’m a little nervous about having no savings account,” Roberts told council.

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