Lee’s Summit might cut in half the raise pool for its employees in the coming year.
Councilman Rob Binney brought up the issue at a Budget Committee meeting this week as a possible way to blunt deficit spending for 2014-15, that would be eroding part of the city’s reserves.
City Manager Steve Arbo has proposed a two-year plan for reducing spending to bring the city’s spending in line with revenue trends. He’s proposing to dip into reserves for about $1 million to cover a one-time general fund deficit. Concurrently he hopes to reduce personnel costs by attrition and controlling health care expenditures.
The general fund would stay above the council’s policy of a 17 percent minimum balance for the about $60 million general fund.
In the 2015-16 fiscal year, Arbo’s plan projects the general fund would be balanced with spending and revenue at about $60.3 million with a reserve of about $14 million.
Under the city’s charter, Arbo presents his budget to the council for approval. The Budget Committee can either endorse it or recommend amendments for the fiscal year that starts July 1.
The general fund pays for services such as fire and police protection and administration.
Arbo’s proposed budget includes about $600,000 for raises, expecting to give a 2-percent average for merit increases.
“That’s a very large chunk,” Binney said. He noted that many residents have not had that kind of raise in recent years, given the state of the economy. He suggested looking at about a 1-percent average increase.
Councilman David Mosby said, “I concur it’s something to take a peek at.”
The committee met twice this week, May 6 and 7 and is to meet again May 12 to decide if it will endorse Arbo’s proposed budget for 2014-15.
Arbo, in an interview, said that he would prefer to present a budget endorsed by the committee, but he is undecided about Binney’s suggestion.
“I’d rather keep talented, highly qualified employees who are more productive and pay them better,” Arbo said, even if he trims the overall number of employees.
That was a step Councilman Bob Johnson wants to take, saying often the city doesn’t spend about $500,000 of its allotted personnel costs each year.
The 2014-15 budget calls for 699 full-time employees and 387-part time employees. Many of the part-time positions are summer jobs with the parks department.
Johnson said the city should reduce the number of overall positions by 10.
“We never hire to the amount we have budgeted...” Johnson said. “Obviously it doesn’t take the 699 to run the city.”
Arbo said in his budget he plans on vacancies reducing personnel costs by an average of 2.7 percent of the overall personnel expense.
Some years there are more vacancies, to carry over money to the city’s fund balance in the next year. Sometimes, like last year, there is not, he said.
Arbo said the city needs a large enough personnel budget to cover approved jobs because he cannot predict which or how many positions will be vacant each year.
“I have flexibility without having to freeze a position,” Arbo said.
Arbo said the city is getting better at finding where it really needs employees and where it doesn’t. If a vacancy doesn't affect expected services, he will cut the position, he said.
Other committee members resisted Johnson’s proposal to cut positions.
“How many employees do we really need to get the job done?” Gray said. “We need to be careful before we start reducing employees too much.”
Mosby and Gray did ask Arbo to consider tightening the amount allotted to personnel so it is closer to “zero” at the end of each year.
Johnson was frustrated at Arbo’s explanation and other committee members. He griped that no one else cares about the deficit.
“I’ve had it with this discussion; it’s double speak,” Johnson said.