MONTPELIER — The Capital City will have a lowercase workforce starting next week, when 30 municipal employees are placed on voluntary furlough as part of cost-saving plan designed to avoid the wave of red ink being forecast due to the COVID-19 crisis.
City councilors unanimously approved the two-part plan – one that deals with most, but not all, of a projected $500,000 operating deficit – during its virtual meeting Wednesday night.
Acting on the recommendation of City Manager Bill Fraser and Finance Director Kelly Murphy, councilors embraced the plan they were told would keep furloughed employees “whole” – and leave some better off – while authorizing an additional $245,000 in budget reductions between now and the end of the fiscal year.
Councilors were told the combined effect of the two-pronged plan would leave the city facing a projected operating deficit of $113,000 when the fiscal year ends on June 30. However, they were urged to “let the pandemic play out” before deciding how to deal with that anticipated shortfall.
The furloughs will start next Tuesday, and are projected to save roughly $192,000 if they remain in place through June 30. Approximately $40,000 of that savings will be realized by the city’s water and sewer funds. That leaves $152,000 to help cover operating deficits now being projected in the general fund ($247,000), the parking fund ($203,000), as well as net losses (just over $51,000) linked to canceled programming at Recreation Department and the Montpelier Senior Activity Center.
Fraser told councilors employee response to the voluntary furlough was better than expected. City officials had hoped as many as 25 employees would take the option, but 30 did.
That will put a detectable dent in the city’s workforce, which includes 116 full-time equivalents – a number that reflects part-time and seasonal help.
The city’s police and fire and ambulance departments will remain fully operational, as will the water and wastewater treatment facilities. But Fraser said most other departments will be short-staffed for the foreseeable future and services will be curtailed.
“It will be a really ‘basics only’ city for the next two or three months,” he said.
According to Fraser, streets will be swept and striped and potholes will be patched, as needed, but a preponderance of the work planned for completion this spring will be deferred.
Fraser said opening the pool this summer seems iffy at best and it is unclear when recreation programs could resume and the senior center be reopened and predicted the current crisis will have “ripple effects” that will have to be dealt with in the coming fiscal year.
The plan approved by the council is designed to get ahead of that problem without severely depleting a $740,000 unassigned fund balance, which councilors were told could be used to offset some, or all of the projected operating deficit. However, Murphy said that surplus already is less than the policy suggests the city should hold in reserve.
The recommended alternative involved a mix of budget reductions, furlough savings, and what Murphy described as a “wait-and-see approach” that would likely involved decisions made after July 1.
Some, if not most, of the 30 employees who volunteered to be furloughed will likely earn more by being paid to stay home, thanks to a $600 weekly supplemental benefit included in the Families First Coronavirus Response Act. That money would be paid weekly in addition to Vermont’s maximum unemployment benefit of $513 a week.
In order to entice employees to volunteer to be furloughed, the city agreed to extend health insurance and other benefits without any gaps in coverage through June 30 and to advance an annual merit pay of $650 to $750 to employees to help cover the five-day waiting period for obtaining unemployment benefits.
Though the furloughs are anticipated to run through June 30, the city has reserved the right to recall some – or all – employees back before then, and hasn’t rule out extending the furlough beyond July 1, though that is not currently the plan. The additional federal subsidy is available through July 31.
More than half of the $245,000 in budget reductions authorized by the council Wednesday night – nearly $143,000 – is tied to work that would otherwise have been done and materials that would otherwise have been used by the public works department during the spring construction season.
The next biggest reduction should is a $52,500 cut from an equipment line item that would finance a future bond payment for a new ambulance. The only department that proposed cutting more than $10,000 was the parks department, which accounts for roughly $19,500 of the total.
The only proposed reduction that generated any conversation among councilors involved $9,500 that was belatedly added to to the budget at the request of the Social and Economic Justice Advisory Committee. The committee plans to use the funds, an additional $10,000 that was included in this year’s budget and money it has yet to privately raise to hire a consultant to complete a social and economic justice assessment project.
Councilors said they remained supportive of the project and open to considering an additional appropriation during budget deliberations later this year, but stopped short of making a commitment.
“Our heart is there, but I have no way of making a promise now when so much is unknown,” Councilor Dona Bate said.
Though councilors unanimously approved the plan for dealing with the projected deficit, they balked at the recommendation that all committee meetings, with the exception of the Development Review Board, be canceled during the duration of the employee furlough.
The council did agree to suspend committee work until its next meeting, when Fraser has been asked to report back on the viability of allowing some committees to meet remotely without the staff support they typically have.