Four Lakewood city employees will be handed pink slips Wednesday as officials work to close a budget shortfall of slightly more than $1 million.
Another four positions that are vacant will be lost under the budget-balancing plan that City Manager Andrew Neiditz presented to the City Council on Monday night. The city has about 240 employees.
“We don’t at all have a spending problem, but we have a revenue problem that needs to be reconciled,” Neiditz told the council.
The city manager didn’t identify employees who would lose their jobs but said no police officers will be laid off.
The shortfall arose several weeks after the council made $14,000 in total budget adjustments in November, about midway through the two-year cycle.
Finance Director Choi Halladay said those adjustments were based on projections through September. But revenues during the last three months of 2011 came in at less than expected, and officials predict that trend will continue through 2012.
Sales and gambling taxes are down, as are building-permit fees, he said.
The city says it will collect about $1 million less in revenue for its general fund than the $34 million it had anticipated, a 3 percent cut.
The city manager’s plan trims nearly $1.3 million, enough to cover the shortfall and provide a small cushion. Reduction in labor costs goes the furthest toward closing the gap, representing $708,000.
In addition, the city eliminated this year’s cost-of-living adjustment for nonrepresented employees making more than $100,000 and reduced the COLA from 2 percent to 1 percent for nonrepresented employees who make less than $100,000.
By comparison, Tacoma is closing a projected $33 million shortfall in its $398 million two-year budget, an 8.3 percent reduction. Tacoma and Lakewood are the largest cities in Pierce County.
Similar to Tacoma, Lakewood officials are charting out a second round of reductions depending on whether the city loses liquor tax and other revenue that the state shares with cities and counties. Halladay said cities expect to lose revenue but must wait for the end of the legislative session to determine how much.
In anticipation of a second round of cuts, officials have approached the city’s three unions to realize savings from labor contracts. Neiditz said managers have broached adjustments to COLAs for all three unions as well as furlough days for non-police union employees.
Neiditz said the immediate layoffs will occur between mid-March and mid-April.
Since January 2009, the city has laid off three employees and eliminated 17 vacant jobs, Halladay said.
Dan Penrose, president of the city’s largest union, said it thought layoffs could be avoided when managers notified them of the budget shortfall in January. During the next meeting Feb. 1, managers notified them three members would be laid off.
“We were taken aback,” he said.
Christian Hill: 253-274-7390
christian.hill@thenewstribune.com
Twitter: @TNTchill
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