By Emily Ford
eford@salisburypost.com
In a letter to city employees, Salisbury City Manager David Treme warns of potential layoffs, furloughs and salary cuts next year in response to a $2.7 million budget shortfall.
To help close the expected budget gap, the city is considering “cost containment measures” including reductions in staffing, furloughs, salary reductions, service level prioritization, operation streamlining and service consolidation or elimination, Treme wrote Feb. 25.
“As we move through this process, our first priority will be to continue to provide services to our citizens at the optimal level,” he wrote. “at the same time, I want you to know that we will make every effort to be sensitive to the needs of our employees as we evaluate the overall needs of our organization.”
Treme told the Post the city faces the toughest budget year he’s ever seen, as a result of the Great Recession. The local economy has taken many hard hits, he wrote in the letter, and the adjustment to the new economy is painful.
“We have to adapt to the economic environment we’re in,” he said. “For the last 40 years I’ve been in local government, I’ve seen many situations like this, but none this severe.”
Sales taxes, a major source of revenue for the city, have fallen significantly in the past two years. Property taxes, another source of cash for the city, remain flat due to the lack of new construction.
At the same time, expenses will increase. The city’s cost for health insurance, gas, oil and mandatory retirement contributions will go up during the next fiscal year, which begins July 1.
“You always have to adapt the size of your government to the dollars that are available,” Treme said.
The city must trim $2.7 million from the current budget, he said.
“I’m sure we can achieve this objective because we are overcomers in the city of Salisbury,” he wrote.
The city will feel the effects of the financial dilemma for years to come, he wrote. The city already has a hiring freeze for non-essential positions and requires pre-approval for all capital and special expenditure projects.
Treme said he’s encouraging employees to consider early retirement, as well as asking for any ideas on how to save money.
He provided a cost-saving suggestion form with his letter and said he’s received several replies. Employees have suggested streamlining and consolidating various operations.
All departments should limit spending to only items essential to the delivery of services, Treme wrote.
“Since every dollar we save will improve our overall financial stability, we all need to be mindful of this in our day-to-day spending,” he wrote.
While other sectors of the economy have started to recover from the recession, government has not. Dr. John Connaughton of the University of North Carolina at Charlotte told City Council last month to expect at least five more years of slow, anemic growth in revenues.
“Normally, local governments feel the effects of these recessions long after the private sector,” Treme told the Post. “Nobody is surprised.”
Contact reporter Emily Ford at 704-797-4264.