Stock market, state reasons behind why city could cut workforce by 10 percent

Mount Pleasant may reduce its number of employees by as many as 10 percent as the city prepares for a decrease in state-shared revenue in the next budgeted year.

Because of the decrease in revenue and a decline in the city’s endowments in the stock market, officials are looking at removing eight to 12 positions, said Nancy Ridley, the city’s director of finance and administrative services.

“We’re hoping to propose some that have less of an impact on the public than what others do,” Ridley said of cutting city jobs. “And we don’t have all of that worked out yet.”

The city is projecting a decrease of at least $125,000 in state-shared revenue from the last fiscal year, and is down more than $1.1 million in state revenue since 2001. The city’s operating budget calls for 2010’s expected costs to total $12.3 million, and revenue is expected to total $11.8 million.

A special meeting to publicly discuss the 2011 proposed budget will take place sometime in March, said Mayor Jim Holton.

The decrease in state-shared revenue and property values have hit the city’s finances hard, he said.

“It’s like a double whammy,” Holton said. “We’re looking at a number of different opportunities.”

Vice Mayor Bruce Kilmer said his goal is to minimize the effect of the cuts on city residents.

“I think we want to balance the budget, but retain essential services,” he said.

Ridley said because of the decline in the stock market, the city’s interest and dividends for employee pensions — the largest expenditure — has declined while pension amounts increase.

Pension expenditures increased by $220,000 this year from last year, Ridley said, and the city will spend 70 percent of its revenue on compensation in 2010, compared to 65 percent in 2009.

To combat the decrease, Ridley said the city will dip into its surplus funds — money the city saves if there is leftover funds or if a grant is received.

“We’ve never dipped in. I’ve been here about 12 years now, and we’ve never had a situation where we’ve had to dip into that,” Ridley said.

Services will not be affected this year because of the surplus fund withdrawal, but Ridley said the city has not been worried about this year.

“Where we’ve been spending all of our time, focusing all of our time is on 2011,” she said.

Ridley said the city is hoping to remove some of its 127 positions through early retirement as opposed to layoffs.

This could mean any position, she said, including the recreation director position vacated by Chris Bundy, who is now the director of parks and public spaces.

“That’s part of why we’re holding off on filling that recreation (position), is so that we know what those recommendations will be for those eight to 12 positions,” she said.