DANVILLE - Anticipating personnel cuts, Danville city administration officials want to offer a severance package, specifically free health insurance for a limited amount of time, to ease the transition for employees who might lose their jobs in coming months, according to Mayor Scott Eisenhauer.
In the last several weeks, the possibility of personnel cuts has been mentioned as city officials and aldermen have discussed next year's property tax levy, which will be finalized later this month. City officials anticipate a 6 percent decrease in the city's equalized assessed valuation, which means the city would have to increase its property tax rate to generate the same revenue as last year. If the city doesn't increase the tax rate, then it will consider cutting expenses to make up for the loss in revenue.
City administration supports keeping the tax rate the same, $1.97 per $100 of assessed valuation, which means approving a levy that's about $380,000 less than last year.
That reduction in revenue combined with an increase in expenses that are normally paid for with property tax revenue means the city will need to cut about $500,000 in expenses for next year to keep a balanced budget.
Last week, aldermen on the city council's public services committee also voiced their support for keeping the property tax rate the same. City administrators have presented up to seven different property tax levy options. Generally, those with a higher tax rate meant more revenue and fewer cuts, and those options with the same tax rate as this year or a rate close meant less revenue and more cuts.
Alderman Tom Stone, Ward 5, said option one, which keeps the tax rate the same as this year, "would be most palatable to the public." Stone asked Eisenhauer what the impending cuts would entail under that option.
Eisenhauer said when personnel expenses make up 75 percent of the city's total budget, a large percentage of the $500,000 in cuts must be in personnel. He said it means a large number of cuts, but didn't specify how many. He said the goal would be to cut positions in a way that would reduce city services but wouldn't eliminate any. The other four aldermen on that committee, Sharon McMahon, Ward 4, April Gilbert, Ward 3, Steve Foster, Ward 7 and Steve Nichols, Ward 6, all agreed with Stone that keeping the property tax rate the same is the preferred choice.
On Tuesday, the full city council will vote on whether to choose that levy scenario initially, putting the proposal on pubic display until the council takes a final vote on Dec. 17.
Also on Tuesday, the council will discuss whether to offer a severance package in the future. The council meets at 6 p.m. Tuesday in the lower level city council chambers in the municipal building, 17 W. Main St., Danville.
Eisenhauer said he wants approval from the council for a severance package so that when city officials eliminate some positions in the future, they have the ability to offer employees in those positions three months of free health insurance.
"So we are just simply preparing for what we know will be happening in the course of the next five to six months as we work toward trimming $500,000 in expenses," he said.
Eisenhauer added that the city also would like to offer a voluntary separation program to employees. With that option, he said, there may be employees who take advantage of a voluntary incentive program who are in positions that the city might re-fill. But it would be "at a rate less than today," he said, referring to the total compensation of a new hire being less than that of the employee who left the position.
The city has added back very few positions since its last major reduction in force in February 2009 when it cut 24.5 positions across its five major departments, including seven in the fire department — five were positions that hadn't been filled in the previous year, and two were eventually cut through attrition. The public-works department, which oversees parks, streets, solid waste and more, lost seven positions, but five were auxiliary workers. The police department lost five positions, one police officer through attrition and the rest transcribers and records clerks. And the public development department lost four positions — four city inspector jobs were consolidated into two and the zoning and code enforcement manager and the neighborhood services specialist were both cut.
About a month after the council approved the cuts in 2009, the city offered a severance package to employees in those positions — two days pay for every year of service and about a month of health insurance. The city then offered the same package as a retirement incentive deal, and several additional employees took advantage of that.
Currently, the city has 253 full-time employees and 46 part-time, seasonal or temporary employees or interns.