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 Sullivan: 2009 budget deficit leads to staff reductions 

  

8/13/2009
Mayor's Office

Additional costs surface: city still in the red

                           

Aug. 13, 2009  |  Contact:                          Sarah Erkmann, (907) 343-7103

Mayor Dan Sullivan provided an overview of savings in the current city budget at a news conference at City Hall following weeks of discussion with city executives and department heads.

A total of 27 layoffs are effective immediately, and 56 positions will remain unfilled. A spreadsheet showing which departments are impacted by personnel reductions and the effect they have on overall department budgets is attached.

Leadership in departments affected by staff reductions presented layoffs to the mayor as the most immediate way to trim costs. Some of the proposed cost-saving measures were found to be unacceptable to the mayor; those are noted in the spreadsheet.

As with other communities across the U.S., Anchorage has been affected by a dramatic downturn in the national and global economy: specifically, a drop in bed and car rental tax collection, the Dow’s continued poor performance, and labor contracts that stand in contrast with current revenue forecasts.

Recent meetings with city executives have brought additional, unfunded expenses to light. They include a $130,000 City Hall Permit Center lease, a half-million dollar unbudgeted payment and $235,000 in unrealized savings from labor contract concessions. (See spreadsheet.)

Adjustments that have been made or will be made immediately:

  • A five percent reduction in executive salaries
  • $5.7 million in department-identified reductions
  • $277,000 in additional revenues

Unfortunately, the budget scenario we walked into on July 1 is dramatic enough to mandate serious spending reductions, including some personnel,” said Mayor Sullivan. ”This is not a pleasant exercise for anyone, especially the families impacted by such fiscal mismanagement. Even with all these cost-saving measures, the city is still about $2.8 million short in 2009 alone, so we still have tough choices to make.”

The mayor’s transition report identified a $9 million revenue shortfall soon after Mayor Sullivan took office on July 1. In the weeks since, the administration has worked collaboratively with all city departments to identify ways to trim expenses and save money. The exercise recently has become more complicated because of the continued discovery of unfunded expenditures and unrealized savings from wage concessions.

The budget outlook for 2010 is equally dramatic, with the full impact of increased labor costs coming to fruition and financial markets predicted to remain relatively flat. As such, the mayor’s administration anticipates having to identify additional savings in order to balance next year’s budget. Those discussions have begun and will continue as the 2009 budget process concludes

FY 2009 Savings

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