Payne: Cost-cutting helps save city employees from furloughs

Furloughs are no longer being considered for Lynchburg City employees in the current fiscal year, City Manager Kimball Payne says.

Payne, citing upticks in certain revenue streams and aggressive citywide cost-cutting measures, said he does not plan to order any unpaid furloughs this year. He credited the decision to employees pinching pennies and shouldering heavier workloads in order to keep the budget in the black.

“I think the entire city workforce should be commended for what it’s done,” he said. “It’s been a stressful time and it’s still stressful because we don’t know what’s going to happen in the future, but they have stepped up.”

The city’s 1,200 or so employees were required to take 2.5 furlough days last year and the possibility that more could occur this year was mentioned after City Council decided to nix a controversial pay cut from the budget.

Council was told that furloughs were no longer under consideration during a budget retreat last weekend. The news was one of the few bright spots in a meeting otherwise occupied with somber financial projections.

“This is very positive,” Vice Mayor Bert Dodson said. “Obviously, we’re thrilled.”

The city manager said current financial projections indicate that furloughs will not be needed to balance this year’s budget. Although the city finds itself in an austere climate, officials feel they’re on track to end the year on a positive note.

Tentative projections built around data from the first six months of the fiscal year predict the city will have a general fund surplus of about 2.3 percent — or $3.7 million — by the time the year draws to a close in June.

Those figures were based on increases seen among a handful of the city’s revenue sources and the results of a push to reduce personnel and debt costs. The general fund is the center of the city’s budget and bankrolls most of its departments.

The city estimates that general fund revenues could exceed budget expectations by as much as $2 million due to multiple factors including: a better collection rate on ambulance bills following a switch to a new collection agency; a rebound in the assessed values of SUVs and trucks as gas prices stabilize under $3; and sales tax performing slightly better than expected.

At the same time, the city has also reduced its anticipated expenses by about $1.7 million by maintaining a staffwide hiring freeze, refinancing some of its debt and taking advantage of the new low-cost Build America Bonds program, which is subsidized with stimulus funds.

It’s routine for the city to end its financial year with a healthy surplus. Typically, a portion of the cash is used to pay for a variety of capital projects, such as road and facility improvements, while the rest is rolled over into a reserve fund.

Although the city finds itself on a solid footing for the moment, officials say they will continue to scrimp and save. Budget managers note the year is only halfway over and projections are subject to change. The city would also like to head into the next fiscal year, which brings with it the promise of steep cuts in state aid, with a strong reserve fund.

City employees were notified of the furlough decision Monday in an e-mail. The city manager plans to hold a Web cast later this week to follow up and answer questions.

The city is still considering taking severe personnel measures in its next budget.

Officials are talking about cutting spending by 10 percent, which could include eliminating 126 staff positions. The city currently has more than 90 vacancies in its workforce due to the hiring freeze.

The new fiscal year begins on July 1. City Council is scheduled to hear Payne’s budget proposal March 9.