SARATOGA SPRINGS — Without new federal aid, the city needs to start imposing 90-day furloughs on much of its workforce to save money, Finance Commissioner Michele Madigan said Wednesday.
Speaking at a press conference, Madigan said that furloughs are preferable to layoffs, but need to be among a number of measures the city should take as it faces a serious revenue shortfall — as much as $14 million to $16 million — due to coronavirus-related economic slowdown.
“The more people we furlough now, the fewer we will need to lay off later,” she said.
Speaking to the City Council Tuesday night and again on Wednesday, Madigan said she is looking to save $3 million through furloughs, in which employees stop working and aren’t paid, but would continue to receive health insurance and other benefits. They would also qualify for $600 per week in compensation under a previous pandemic relief bill, the CARES Act.
The number of employees to be furloughed is unknown; each city department has been asked to come up with a furlough plan, including the Department of Public Safety, which includes the Police and Fire departments. “No one is exempt,” Madigan said.
The city has about 300 employees, some of them part-time or seasonal. The city commissioners were asked to submit furlough plans to Madigan by the end of the day Wednesday.
Furloughs would require negotiations with the seven labor unions representing city employees, and those negotiations will be in the hands of Mayor Meg Kelly’s office. Madigan said she’s hopeful the unions will accept furloughs, given that layoffs are the alternative.
The proposed furloughs would be part of a multi-pronged plan to re-balance the city’s 2020 budget, including short-term borrowing of $2.4 million, drawing an additional $4.5 million from the city’s fund balance, cutting $3 million in non-salary expenses from city departments, and the furloughs. All those measures together could still leave the city with a deficit of up to $3 million.
The city has a $48 million annual budget — but that assumed revenue would come from sales tax, track admissions tax, and other sources that have dropped off a cliff with the economic shutdown.
“It is critical that we reduce spending immediately,” Madigan said at Tuesday’s council meeting.
The plan is subject to approval by the City Council. Madigan said she expects it to be discussed at the next meeting on May 19.
“Saratoga Springs may not be able to avoid cuts in essential services without new federal aid,” Madigan said.
In calling for new federal aid, Saratoga Springs is joining with Capital Region municipal leaders, including Schenectady Mayor Gary McCarthy and Albany Mayor Kathy Sheehan, who have said employee layoffs are likely if Congress does not include new aid to economically devastated cities in its next coronavirus pandemic relief bill.
Senate Majority Leader Mitch McConnell has so far resisted calls for federal bailouts of states, counties and municipalities, saying they should consider filing for bankruptcy if necessary.
On Tuesday the entire New York state Congressional delegation — a bipartisan group ranging in ideology from conservatives like Elise Stefanik, R-Schuylerville, and Lee Zeldin, R-Long Island, to liberals like Paul Tonko, D-Amsterdam, and Alexandria Ocasio-Cortez, D-Bronx — signed a letter to Congressional leaders urging aid.
“As a result of shutting down the majority of economic activity in New York to prevent the spread of this terrible virus, our local governments have incurred massive financial losses due to expenses and lost tax and fee revenue,” the delegation wrote.
“Direct funding would help support first responders, teachers, nurses, sanitation workers,
transit workers, and many more, all of whom are vital contributors to our communities,” the letter continued. “We needed them before the pandemic, we need them now, and we will continue to need them as we get through this together.”
Madigan said she considered the letter a “very positive” development. “It’s Democrats and Republicans working together,” she said.
“We’re not unique. I present you the story of Saratoga Springs, but this is happening everywhere,” she said.
The New York State Association of Counties has also called for federal aid to counties, which it says face unexpected expenses from the economic shutdown, as well as deep revenue losses. It estimates counties outside of New York City will lose more than $2 billion in revenue, factoring in sales, room occupancy and other taxes and fees. Counties are also bracing for another $1.25 billion in cuts in state reimbursements, the organization said last week.
“Without help from the federal government in the form of direct aid to state and local governments, the counties who are leading the effort to stop COVID-19 and lay the foundation for reopening will face savage cuts to staff and services that could not come at a worse time,” said Albany County Executive Dan McCoy, president of the state County Executives Association.
Madigan said her projections assume little of the usual tourist-related economic activity in Saratoga Springs this summer, and that 2021 also will be a challenging year for the city. “I think it’s going to take a very long time before we see revenues return to where they were pre-COVID-19,” she said.
Madigan said she hopes there is thoroughbred racing at Saratoga rRace Course this summer, even if it’s without fans present. “It would be worth it for the impact on the region, on the agricultural industry,” she said. “There would still be wagering, maybe record amounts of wagering.”
New York Racing Association officials have said they are working on possible ways to safely hold the meet, which is scheduled to start July 16 and run through Labor Day. Another summer visitor staple, the Saratoga Performing Arts Center, is seeing a growing list of its events canceled.