Staffing and overtime pay, pension costs and the use of take-home vehicles at city expense are some of the issues that the City Council could address to cut costs, according to a report by the city’s finance director.
Finance Director Leslie Haase will outline a package of options Monday night to the City Council that could cut city expense by up to $5 million a year in order to create a more sustainable city budget.
While some of the options involve costs and operations across city departments, a majority of the large expenses would affect police and fire department costs that are discretionary or fringe benefits.
Options that could raise city revenues also are outlined. Those include the possibility of increasing city sales taxes and and property tax.
City Manager Sam Anselm said the purpose of the report is to help the council find ways to cut expenses in order to protect the long-term financial viability of the city, but the council will not yet talk about pay increases.
“It is my hope that Monday’s discussion will set the stage for future talks about a sustainable pay plan for all employees,” he wrote.
Haase writes in the report that “As noted with the adoption of the current year budget, in order for the city to achieve long-term financial sustainability, operational changes resulting in a reduction of expenditures and/or an increase in revenues is needed.”
The city has a number of different funds that can only be tapped for specific purposes. But the city’s general fund is the only one that can be used for general services to the public, such as employee wages and operational costs.
The city’s 2018 fiscal year budget for the general fund totals more than $28.3 million. Of that, personnel costs (wages and benefits) take up nearly three-fourths of the budget for that fund, or about $21 million. Operational costs are about 20 percent, or about $5.7 million.
Public safety costs, or the wages, benefits and equipment costs for the police and fire departments, amount to 68 percent, or nearly $19 million, from that fund. The general fund revenue includes proceeds from the half-cent public safety sales tax, which this year is budgeted to provide nearly $2.7 million for police and $2.22 million for fire services.
“The city is at a crossroads in addressing the long-term financial sustainability of the general fund,” the report states. “Without making operational changes, the financial outlook of the general fund will continue on the same path as the last several years of extremely limited resources to provide services to our citizens and community.”
The options presented will not cut any services to residents, according to the report: “Rather, the options are methods of changing operations to provide services as efficiently and effectively as possible using limited taxpayer resources to help ensure the long-term financial sustainability of our city,” the report reads.
Some of the options would prove to be sweeping changes for the city’s public safety departments involving changes to pension fund coverage for some, a reduction in the number of required personnel to man fire stations, stricter accounting for overtime pay and in the use of city vehicles.
• PENSION: One option would be to move newer police and fire employees from a city pension fund, the Police and Firemen’s Pension Fund, to a state LAGERS fund for public employees. General city employees are covered by a LAGERS plan. It would reduce the amount of money the city is spending to provide pension benefits. Pension costs would be reduced by more than $1 million.
There are a number of pay issues cited regarding the police and fire departments. Some of those are:
• FIRE DEPARTMENT STAFFING: An option could lessen payroll costs in the fire department by about $1 million a year by reducing minimum staffing levels from four to three per firetruck. That option also was suggested by the council’s finance committee, which looked at staffing in nine other departments during an examination of city budget issues several years ago. The fire chief has kept the staffing level saying it improves firefighter safety and reduces property damage.
• CALL BACK POLICY: A policy was adopted in 2012 on overtime paid to employees who are called back in to work after they leave a shift to cover for an absence. The fire department schedules its shifts a year in advance but still charges overtime pay for extra shifts even though they should be paid at the regular rate of pay because they are scheduled in advance. The fire department call back pay for last fiscal year was $407,780 versus police call-back pay of $70,233, according to the report.
• PERSONAL USE OF VEHICLES: A number of city employees are using city vehicles to drive home, and that is not being counted on W-2 forms as compensation. Joplin does not have a policy addressing the practice of employees taking home the city-owned vehicles they use for work. The practice has been criticized by the state auditor.
Currently, 71 city vehicles are driven home, 58 of those by police department employees and the others by members of the fire department, public works, parks and the animal control division of the health department. Those vehicles are fueled and maintained by the city at a cost of $142,000.
The council has already acted on the first item of revenue identified in the report by proposing a use tax to voters. It could generate an estimated $1.2 million.
The report identifies other sales tax options:
• An economic development sales tax that could only be used for certain purposes.
• A museum tax that could be used only for historical and museum purposes.
• Property tax. The city’s current levy of $0.1794 per $100 assessed value is considered low compared with other cities, according to the report.
Comparable rates of sales and property taxes are contained in the full report, which can be viewed at www.joplinglobe.com.
The city could realize another $2.4 million in additional sales and property tax as existing tax increment financing districts are paid off. Some of those may wrap up within five to six years, the finance director has previously reported.
Telephone franchise taxes are down $700,000 as a result of people switching from land lines to cellphones.
When and where
The presentation on financial options will be made a City Council meeting at 6 p.m. Monday. The council meets on the fifth floor of City Hall, 602 S. Main St.