City freezes new hires, anticipates retirements

With freshman member Melissa Hunt strongly opposed, the Anderson City Council voted 4-1 Tuesday, Feb. 19, to reduce the city’s 2007-08 budget and leave unfilled six vacant positions due to the current economic downturn.

“We are causing undue jittery feelings among employees. I just don’t like it,” Hunt said during a wide-ranging discussion that had at least three of the other council members defending City Manager Scott Morgan’s recommendations.

“If you had been here when Scott (Morgan) was first hired 10 years ago and he told us that we were almost bankrupt, you would see this in a whole different light,” said Norma Comnick, who made the initial motion to accept Morgan’s recommended course of action.

Phil Burnett, who has served nearly eight years on the council, seconded Comnick’s motion.

The current year’s budget, adopted last June, has already been amended three times previously to increase expenditures by a total of $33,637 — primarily due to wage increases for police dispatchers, a staff report indicated.

The council’s current action recognizes an anticipated revenue drop of $31,450 primarily due to lower building permit fees that have fallen victim to a nationwide housing slump and near-recession sparked by the high default rate in sub-prime mortgages.

“Our building permit revenues of just $3,000 in January do not justify having three employees in that department,” Comnick pointed out to Hunt. For the year so far, building permit activity in Anderson is running more than 56 percent behind the $170,815 collected in 2006, the first full year of slowing house sales.

However, to help correct the nearly $405,370 anticipated deficit, the “modified, somewhat flexible, hiring freeze” that Morgan instituted some months back will result in a projected salary savings of $190,300 that cuts the single-year shortfall to a more manageable $215,070.

Since Anderson uses a two-year budget cycle, in this case from July 1, 2007, through June 30, 2009, any deficits in the 2007-08 budget year will need to be covered from revenues collected in 2008-09.

Most of the savings in this year’s budget — $103,000 of the total — comes from not hiring two police officers and a public safety dispatcher, a staff report indicates.

Not yet factored in to the mix is the city’s share of gas tax revenues that state legislators have announced will not be distributed in April. Instead, the state may hold onto those funds until late August or early September, Comnick noted.

To further sharpen the city manager’s ability to forecast revenues and expenditures, the council also authorized Morgan to question employees nearing retirement age or length of service as to their plans.

The city has had fewer than the usual number of retirements during the past two years because several employees nearing eligibility chose to remain working until an enhanced retirement package takes effect July 1. At that point, Morgan said, he expects the rate of retirements to rise dramatically, maybe even as high as eight employees.

“Up to this point, we have had very few retirees as our employees knew this package was coming on line. Once it (the enhanced retirement package) starts, it’s possible that we won’t be able to freeze all of those positions. We may need to hire replacements for some vacancies, and therefore, layoffs may be needed to adjust our expenditures,” Morgan cautioned the council.

In other unrelated business, the return of Mayor Butch Schaefer from vacation allowed for a 3-2 vote with Comnick and Keith Webster in appointing Larry Mower as the city’s representative to the Shasta Mosquito and Vector Control District’s governing board. The appointment is for a four-year term.

Mower, who retired from Citizen Utilities, served on the Anderson City Council from 1990-91, and is a past member of the Anderson Planning Commission.