Manhattan is considering 5 to 10 percent cuts in city departments for the 2021 budget as officials look to fill a $2.7 million gap in revenues and expenditures.
City Commissioners Tuesday heard from department heads in a session that was extended past the midnight stop time implemented in 2018 by 4 to 1 vote, with Mayor Pro Tem Wynn Butler opposing.
Commissioners were also unanimous in authorizing sending the budget to publication in order to approve it by the state-required August deadline. It features no increase in the mill levy, though about half a million dollars in additional property tax revenue is anticipated due to new buildings and renovations. Overall, a $166 million budget will be published, $3 million over 2020’s figures largely due to sales tax revenue earmarked for project costs related to the new middle school recreation centers. Once published, the budget can only be further decreased. Publication is planned for Friday, with a public budget hearing planned for August 4th, the first in-person meeting for the commission since April.
Administrative staff had previously presented a budget option highlighted by $1.2 million in possible fund transfers in addition to $1.5 million in targeted cuts to fill the hole, but those cuts were targeted at part-time and seasonal staff and programs largely in the Parks and Recreation Department. Finding the proposal unpalatable — which would have closed CiCo and Northview pools for another year — commissioners instead asked each department to highlight how they would go about implementing across the board cuts. City Manager Ron Fehr says some of them are ‘bone deep.’
“Many of them are already operating on cuts with open vacancies,” says Fehr. “We put a selective hiring freeze on most departments so most of those vacancies continue into next year and the proposed cuts only add to those.”
Department heads painted a tough picture for the commission. Amid multiple years of plateauing revenue, they say they’ve been asked annually to make internal cuts to training opportunities, equipment and software upgrades and have held positions vacant with similar or increased workloads. Employees in various departments are also wearing multiple hats and working beyond the traditional scope of their jobs as a result, department heads told commissioners Tuesday.
Multiple departments spend most of their budgets on personnel, with heads saying cuts would require cuts in full time employees or replacing positions with part-time roles and likely reduction in service availability and speed. Multiple Parks and Rec. programs also would still be eliminated as well.
At the 5 percent level, the cuts in the City Manager’s Office would cut summer K-State internship for student government officials and reduce the travel budget. At 10 percent, all travel for employees and commissioners would be cut and would reduce hours for an administrative assistant that assists in numerous departments and with commissioners.
Community Development would cut 2,080 work hours at 5 percent, cutting a planner job that works with the housing and zoning appeals boards. Ten percent would further cut another 1,191 hours of internship work, many of whom serve as primary liaisons to various citizen committees.
Fire Chief Scott French requested they leave his budget untouched in 2021, saying further reductions in their training budget would result in more difficulty recruiting and retaining firefighters. He also said cuts would reduce code services capacity to do proactive code enforcement and could reduce their capacity to adequately inspect development.
Reductions in airport budgets could not occur in some areas due to the need to keep up with certain federal requirements and functions, but 5 percent reductions would reduce the budget from $1.5 to $1.44 million and 10 percent to $1.37 million. That would reduce marketing, pavement and building maintenance, travel including for training and their ability to purchase ice and snow treatment supplies. The airport, though, did receive an FAA grant that helped out in 2020 and remaining funds are projected to cover around one third of its ’21 budget.
Legal is one of the departments highlighted during a conversation about the Organizational Excellence Initiative in January as being chronically understaffed. The department has four full-time employees, below the national average of 6 for similarly sized organizations. Prior to any additional cuts, the assistant city attorney position has already been cut for ’21. City Attorney Katie Jackson says the department’s not grown since its formation in 2012 and any cuts will reduce services for those in the court system — possibly resulting in more cases going to collections and more warrants being issued — as well as to city departments.
Though spared the bulk of cuts first proposed, Parks and Rec would still see the elimination of support for programs like the Youth Wildcat and high school intramural leagues. At 5 percent, Arts in the Park would lose half its funding and 10 percent would cut it and municipal band dollars altogether. Two recreation coordinators would also be relocated to the new recreation centers eliminating the need for new hires. Five percent cuts would not close pools, though would require them to close at 6 p.m. and end the season mid August. At ten percent, CiCo would close in ’21. Reductions would further cut mowing and park maintenance service, lighting at various outdoor areas and trash services. Cuts would also eliminate travelling Discovery Center exhibits and at the 10 percent level cut seasonal employment and gift shop merchandise.
Public Works would see reductions in snow and ice clearing capabilities as well as require dollars to be shifted around from Special Street and Highway and Surface Transportation Program funds to make up for the loss of general fund support. That would limit their ability to pursue KDOT grants due to the lack of funds necessary for local matches for those awards. Director Rob Ott says at 5 percent, 50 percent of road salt and deicer would be cut, plows would not work on residential streets that did not see 3 inches and reduce 24 hour plowing service. At 10 percent, all road salt and deicer would be cut.
Human resources and finance are also departments that the OEI highlighted as understaffed. Those two departments were not asked to make cuts as a result. HR has not grown in years despite increased workloads and finance has numerous vacancies that have resulted in employees regularly working past midnight. Even then, the city’s audits have been late for multiple years with staff unable to keep up along with other duties. Instead, finance would make hires for the vacant director job — which is being held in interim by the current HR director — Tammy Galvan, as well as for a treasurer, staff accountant and administrative assistant (as a replacement for the old assistant director position unfilled for more than a year). Any increased costs will be made up with cuts elsewhere.
Deputy City Manager Jason Hilgers says the presented 5 percent reductions are what is necessary to cut the targeted amount of expenditures from the overall budget if cuts are not targeted more toward part-time employees and the Parks and Rec department. He also notes that further revenue hits related to COVID-19 or other situations, such as the $4 million to $8 million projected for the current budget year, might result in the 10 percent reductions being unavoidable.
“Categorically, you’ve heard tonight there are some departments here that are very difficult to make cuts,” says Hilgers. “Fire department, airport, legal, public works, park and rec, all providing very essential services to this community and without additional revenues coming in and anticipated shortfalls, these are the areas we have to look to.”
Butler pointed to the economic development funds as a potential stopgap, with projections showing a balance of 4 million through 2025.
“And then we make a heck of an effort to get a replacement tax put in place,” says Butler. “But apparently, if those numbers are correct, we’re not going to end up with a crisis in that EcoDevo fund — even if we use a lot of it — until 2025.”
Butler preferred more targeted cuts rather than doing them across the board. He was in favor of plans for Legal, but wanted to avoid even a 5 percent cut for Parks and Rec following public response to previous proposals.
He instead favored cuts up to 10 percent cuts in the City Manager’s Office, Community Development and the airport while also bringing the library and outside agencies into that mix as well. He was also reluctant to OK cuts to public works, except ‘maybe’ for reductions in snow removal operations on residential streets. Butler further reiterated opposition to utilizing any utility funds for transfers and advocated privatizing some services such as pet licensing.
Mayor Usha Reddi, though, wanted the commission to take more time to digest the information and come back for a more comprehensive conversation with all available information at a future date.
“We need to look at a worst case scenario because this is not over yet as far as COVID,” says Reddi. “We don’t know where that’s going to fall, we don’t know how much money there’s going to be from the SPARK funds for any of the social service agencies.”
Manhattan will return to in-person meetings in August, though some commissioners may still attend via zoom.
City Commissioners Tuesday expressed consensus to amend its COVID-19 emergency resolution and return to City Hall August 4th. Though the resolution will follow the Attorney General’s best practices recommendation and allow commissioners to stay remote if they choose.
“We need maximum flexibility with regard to our meetings,” says Commissioner Linda Morse. “And I want to accommodate the public also and it seems to me that in-person piece is what we have all been speaking to as necessary and as needed.”
The resolution had also expanded City Manager Fehr’s spending authority to $75,000, with reports to the commission, and reduced the number of readings per agenda item to just one. Butler proposed allowing one reading on items if commissioners had discretion to require a second reading on items of their choosing. Mayor Usha Reddi, though, favored 2 readings.
“When you have two readings on anything, things I may or may not think are important are usually important to somebody else and they realize […] it’s going to come up for second reading and […] didn’t know it was on the agenda the first time around.”
Multiple commissioners desired two readings for items such as the budget or potential extension of the city’s mandatory face covering ordinance. Morse further expressed support for splitting the difference on Fehr’s spending authority at $50,000, up from the usual $25,000, though a majority were favorable of continuing the $75,000 for the time being.
Commissioners also expressed interest in having this resolution expire at the end of the year, to coincide with the county’s emergency declaration. No vote was conducted during the work session and the item will be brought back to the board for final approval.
Commissioners further discussed priorities for their allocation of SPARK funding. As the deadline for state COVID relief fund assessments for local governments approaches, Manhattan is hoping to take in 8 million dollars.
State allocations of relief funding are being distributed through the SPARK program, administered at the county level. Riley County received $15 million for reimbursements and direct aid for governments related to past and potential COVID-19 expenses.
While governments have restrictions on the use of the funds to make up for lost revenue, City Manager Ron Fehr says the program does allow for city programs that provide such support for area businesses.
“Hotels, that’s where the big hit is,” says Fehr. “You’ve got a situation where we might use ’19 data as what were your occupancies in those months of March and April and May normally and what was it actually?”
He says the difference in revenue has the potential for reimbursement. Another idea he floated was shifting the business loans provided by Manhattan and administered by the Chamber into grants and opening a new round of funds as well. Commissioners discussed potential uses of the funds including medical equipment, fundraising losses for groups like the Friends of the Sunset Zoo and even rental assistance.
Commissioner Aaron Estabrook pointed to a Flint Hills Wellness Coalition survey indicating some of the highest needs amid the pandemic were rental and food assistance. Butler also discussed extending further rent relief to Manhattan Town Center, which had requested a year’s abatement but was awarded relief for a quarter of the year.
The deadline for assessments is this Friday. If the assessed expenses qualify, Manhattan will have another week to complete a formal application for funds.