Facing a mounting budget crisis, DuPont’s Mayor Michael Grayum froze all exempt city staff salary increases effective immediately. The mayor also announced that effective July 1, 2012, all exempt staff will take a three percent reduction in pay for one year. Grayum made the announcement during the May 22 DuPont City Council meeting.
“This is not something I take lightly. This three percent reduction mirrors the State’s reduction and was a topic proposed by members of the Community Finance Committee,” said Grayum.
The pay reduction and salary freeze has no impact on the city’s union employees. Exempt staff include the positions of city administrator, finance director, police chief, fire chief, public works director, planning manager, human resources manager, city clerk, and community development director which is currently unfilled.
Mayor Grayum explained that the reductions will be effective for one year, or until a new performance management system is in place.
“I want to take this time to evaluate our current personnel policies, procedures and practices. This is not intended to discount the mechanics of the current system we have in place and the benefits that it provides to the City by encouraging longevity, consistency and stability. It is intended to build upon it and move us forward to a more progressive style of performance management,” said Grayum.
The mayor is also voluntarily taking a three percent cut from his mayoral salary. He asked council members to do the same.
“Since elected officials salaries are set by a Salary Commission, this is something that can only be done on a voluntary basis,” he said.
Freezing exempt staff salaries and implementing a three percent reduction for a year is the latest cost-saving measure the city has implemented to survive the recession and dwindling revenues. Mayor Grayum recapped earlier cost-saving measures that were implemented starting in 2007. They include eliminating or not filling four positions in 2007 and 2008.
In 2009, after two failed levy attempts, the city’s ambulance service was mothballed. Three more positions went unfilled and cost-saving measures such as reducing printed materials, and reducing janitorial services went into place. City staff began updating the city’s website instead of contracting out that service.
Grayum reported that in 2010, several positions were reclassified. Four more positions were eliminated. The Assistant Fire Chief contract was reduced to half-time. Certain staff were promoted to management positions without receiving corresponding pay increases. Union contracts were negotiated to include no cost of living adjustments for 2012, 2011 and 2012. The city newsletter was eliminated, and the city reduced landscaping costs. The city also increased utility taxes, passed an admissions tax, and increased some fees.
In 2011, the city switched to a less expensive health insurance plan and increased employee co-payments. Rental fees for parks and facilities were increased, and the Police Department took advantage of a new impounded vehicles fee that helped fund police training and replacing aging equipment.
Grayum reported that the city is no longer in a position to fund essential services, nor can it pay the debt on the Civic Center facilities.
“Not paying the debt on the civic center is not an option, and constantly borrowing from the city’s reserve funds to make the payment is not fiscally responsible,” said Grayum.
The city has a Civic Center debt payment due in June, and another due in December. At the May 1 Community Finance Committee Meeting, it was revealed the city’s 2012 shortfall on the debt payment was $770,000. It’s $770,000 the city does not have. As much as he doesn’t like it, Grayum knows he will have to borrow from reserve funds for a second year in a row to make that debt payment.
“In the short-term, the salary freeze and three percent reduction won’t cover $770,000, but it will help reduce the amount the city has to take from reserve funds to make their 2012 debt payment,” said Grayum in a phone interview.
His announcement about pay reductions comes just a day before the Community Finance Committee is scheduled to host a Town Hall meeting to discuss potential property tax increases and other revenue options to address the city’s debt obligation on the Civic Center.
Grayum convened the Community Finance Committee in March to discuss the revenue shortfalls head-on. He describes the process as collaborative, transparent, and unprecedented.
“There are tough choices ahead that will require the determination of our lawmakers, and the understanding of our citizens as they see the choices we must make,” he said.
“We have no greater opportunity than the one before us to determine the kind of city we want: one that is leading, or one that is catching up. I know what I want, and I suspect what you want as well,” said the mayor.
The Town Hall meeting is scheduled for Thursday, May 24 at 6:30 p.m. at The Home Course golf course Event Pavilion.