Lynchburg's proposed budget calls for 3 percent pay cut

Lynchburg officials are considering closing the downtown library, ending bagged leaf collection and eliminating school crossing guards in an effort to balance their diminished budget.

Employees are also facing across-the-board pay cuts and the loss of employer contributions to their retirement accounts.

City Manager Kimball Payne proposed those and other cost-cutting measures Tuesday while making his budget presentation to City Council. He noted staffers mulled over many “distasteful” options in their quest to balance the $364 million budget and called this an unprecedented year that will see the city’s resources shrink as revenue levels fall.

“We really tried to scrub and find money wherever possible,” Payne said, adding budget handlers also worked to stay true to council’s vision for the community — although “some compromises may have been made.”

Lynchburg is expecting its funding to drop by 2.9 percent in the new fiscal year as a result of the nationwide economic crisis, which is prompting reductions in state aid and causing consumer-based taxes to suffer.

Payne said the budget came to him with a $10 million gap in the general fund, a large pool of money used to bankroll most city operations, including schools, public safety and social services.

The breach was created by a combination of diminished revenues, new spending requests and payments on new debt slated to be acquired this year for capital projects, including the new Sandusky Middle School now under construction.

To balance the budget Payne recommended a long list of cutbacks, the most significant being a 3 percent pay reduction for all employees.

The proposal — expected to save $1.5 million in personnel costs — comes on the heels of a recently approved 2½-day furlough equal to 1 percent of the city staff’s current salary.

Payne also suggested council eliminate the government’s contribution to employees’ retirement accounts, an estimated savings of $83,000. He said it was unfortunate employees were “taking a major hit” in the new spending plan, but also said it was inevitable given that personnel costs make up roughly 70 percent of the budget.

Layoffs were largely avoided in the city manager’s proposal, although he did call for eliminating some part-time and temporary positions, including school crossing guards.

Additional cost-cutting recommendations included:

- Close the downtown public library (estimated savings of about $81,000)

- Forgo new positions in the police department and emergency communications center ($180,693)

- End bagged leaf collection (about $25,000)

- Defer capital projects (full accounting of savings not immediately available)

- Defer vehicle replacements ($1.3 million)

- Reduce funding for economic development ($700,000)

- Delay planned increase to tourism funding ($220,000)

Payne’s plan also called for no change in the real estate tax rate, despite a reassessment that will bump total property values up by 5 percent when the new fiscal year begins July 1.

Officials estimate the heightened property values will generate an extra $3 million in tax revenue — not enough to offset losses in other funding streams, including sales tax and personal property tax.

City Council is scheduled to approve the budget in May. A series of work sessions will take place before then to allow officials to comb through the numbers and make revisions.

The final form of the budget, including the tax rate, lies in council’s hands. “It’s our budget now,” Vice Mayor Bert Dodson said.