WILKES-BARRE – Against the backdrop of looming layoffs of city employees, Mayor Tom Leighton announced further job cuts in the private sector with the closing of two local businesses.
The mayor did not identify them but used them at Thursday night's council meeting to strengthen his point the city had company in the struggling economy.
I just heard today two local fairly large businesses in the region … either announced it or are going to announce it that they're shutting down their operations, he said. So it's not only government having difficult times.
The city has to make up an approximate $2.5 million revenue shortfall this year through layoffs and could carry them into next year to balance the $45.8 million budget he proposed.
The mayor offered little on how many employees would be cut when pressed for details, saying it depends upon how much money the city can take in before the end of the year. It's short between $800,000 and $1.5 million in earned income tax due to a mess created by the former collection company Centax-Don Wilkinson Agency. The loss of other budgeted revenue compounded the situation, prompting the call for voluntary layoffs. But not enough employees responded, setting the stage for the layoffs.
Councilman Tony George opposed cuts that could affect the city's services.
I'm totally against laying off anyone from the fire and police departments that man the streets and the Public Works, he said.
Leighton sympathized, saying. We are against laying off anybody.
But he said he can't expect any city employee to work for free.
Only one representative from the city's four unions addressed council at its combined work session and regularly scheduled meeting.
Greg Freitas, vice president of the International Association of Fire Fighters Local 104, recapped the union's cooperation with the city that he said saved $9 million since 2004. The union negotiated a contract without an arbitrator that included new pension language and restructuring vacation time. The union also benefited from an arbitration award during that time that gave them 14 percent raises over four years and no increase in health care costs, he pointed out.
In order to address the city's financial problems three firefighters agreed to retire in response the mayor's request that employees eligible for retirement do so by Nov. 15 to help with next year's budget. That's a savings of $160,000, Freitas said. In addition, one firefighter volunteered for the furlough. In both instances, the employees would continue to receive health insurance – through the end of the year for furloughed employees and for three years for the retirees.
Still Freitas demanded an answer from the mayor on layoffs.
These guys back here all have families, Freitas said referring to other firefighters attending the meeting. Christmas is coming up. What am I supposed to tell these guys and their families for that matter?
Leighton acknowledged the cooperation of the union in the past. But he left Freitas wondering.
The answer to your question is unknown, the mayor said.
The city does not expect to receive enough revenue to pay employees for the next six weeks, he added. The layoffs will be announced within the next week.
Whether they stretch into next year depends upon the millage rate for the 2013 budget under consideration by council, the mayor explained. He proposed increasing property taxes by 30 mills to 126.63 mills to raise approximately $2.7 million in revenues. It would cost the average household an additional $183 next year. But the rate could be lowered if employees agreed to concessions. Without the givebacks, the mayor warned of layoffs.
Rather than reducing the city's workforce by eliminating the jobs of the lowest-paid employees, several residents said the mayor and council should take pay cuts, and administrative salaries be trimmed as well.
When not discussing the budget, council conducted business on its meeting agenda. It adopted the 2103 Action Plan funded by $1.5 million from the U.S. Department of Housing and Urban Development for street paving, housing rehabilitation and preservation, homeless shelter services and other programs.
Council approved a resolution to allow construction vehicles to travel on city-owned property for repairs on the Cross Valley Expressway bridge.
Council must hold a public meeting before adopting the 2013 budget by the end of the year. The meeting has yet to be scheduled.