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Stratton says Schenectady layoffs likely

Stratton says Schenectady layoffs likely

Despite six months of belt-tightening and reorganization, the city is still facing a staggering defi

Despite six months of belt-tightening and reorganization, the city is still facing a staggering deficit for next year.

At best, Mayor Brian U. Stratton said, the city will have a $5 million hole in the 2011 budget.

Layoffs are likely, he announced at Monday’s City Council meeting.

“It’s probably going to be necessary,” he said. “We’ll do everything we can to reduce or eliminate that. That may not be possible.”

But he emphasized that he isn’t willing to raise taxes instead of cutting city workers.

“That’s the last thing I want to think about or talk about,” he said of tax increases.

First, he’s hoping that workers will leave voluntarily. Stratton wants up to a fourth of the city’s 600 employees to retire early this year under a state retirement incentive, which would give him the leeway to reorganize departments without laying off staff.

Layoffs are also logistically tricky, he said. Workers can use their bumping rights to push into a lower-level job, and savings can be difficult to calculate if the worker uses unemployment and COBRA, which allows workers to stay on their health insurance for a limited time if they pay for most of it.

Considering the human impact of layoffs as well, he said, it’s better to persuade workers to retire.

friday deadline

About 160 city workers are eligible for the incentive. They must tell the city by Friday if they want to retire. Finance Commissioner Ismat Alam will calculate the savings from their departure by the end of July, and the City Council would have to approve the retirements by the end of August.

The goal, Stratton said, would be to replace as few of the retirees as possible. However, the city could still save money if a retiring employee is replaced because the new, inexperienced worker could come in at a much lower salary.

Stratton has already asked every department head to submit budget proposals that include a list of “opportunities” to cut staff.

Department heads have already taken a variety of other steps to trim costs. The Fire Department began billing for advanced life support services last month and is expected to bring in $200,000 this year. Next year, the department should raise $500,000.

Increased fees at everything from ball fields to parking meters, many of which have already gone into effect, will net the city another $200,000 next year.

Also, city negotiators convinced one of the city’s health insurers to cut its price by $1 million and increase some services if every city employee switches to that insurer.

Stratton wouldn’t say which insurer offered the deal. The city’s unions are voting on the idea now, with results expected by July 23, Director of Administration John Paolino said.

Galesi Group has also agreed to pay $1 million in back taxes for the AlCo property.

Those changes cut the projected $12.8 million deficit by $2.7 million — but there’s still $10.1 million to go.

Stratton said he sees realistic ways to cut another $2.2 million, and a way to postpone another $2.8 million. But the final $5.1 million will likely depend on union contract givebacks, retirement savings and layoffs.

“The fact is, with all these changes, we’re still looking at a very large number,” Stratton told the council.

As for the $2.2 million in additional deficit cuts, the city could bring in $500,000 by selling more tax liens. A state law allowing that is on the governor’s desk awaiting his signature.

Paolino also expects to save $200,000 in workers’ compensation costs next year through increased education to avoid accidents.

And Stratton wants the council to take another $1.5 million off the deficit by telling the county that the city will no longer pay the taxes of those who ignore their bills.

The council can’t do the same for the delinquent school taxes, which cost the city $2.8 million a year.

But the council could delay its payment by one year, and Stratton wants to do that.

Usually, the city waits until December to determine which taxes have not been paid. Two months later, it pays the school district and county.

But next year, the city would calculate what it owes — and then not pay up in February of 2012. The school district would not get paid until 2013.

The change would not truly help reduce the city’s deficit but would give the city more time to resolve it.

It would also help in the short-term by improving the city’s cash flow, Alam said.

Commissioner of General Services Carl Olsen has suggested that his workers do body-shop repairs for other municipalities at the new facility on Foster Avenue as a way to make money.

City officials are also looking into an incentive-based recycling program that might persuade residents to decrease the amount they throw out every week. Council President Gary McCarthy said the city should be recycling three times as much as it is now — and that if residents tripled their recycling, it could have a significant impact on the city’s waste disposal costs.

Stratton agreed.

“We think it is viable,” he said of the plan, which will be discussed at the City Council’s August meeting. “We are going to do everything we can to get this [deficit] down to zero.”

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