From: Walton, Curt
Sent: Wednesday, March 25, 2009 11:16 AM
To: _Everyone (City & CMPD)
Subject: FW: Managing Personnel Costs
As we all know, the past 9 months have been very difficult economically. The revenue that the City will receive for this fiscal year is significantly below the budget approved by City Council last June. Each of you has worked diligently to help us manage through this budget and, for the most part, we are in good shape to finish the last 3 months of the fiscal year within budget. However, significant challenges remain ahead of us, especially as we head into the next fiscal year beginning July 1. Next fiscal year’s revenue will be significantly below this year’s budgeted revenue.
On March 23rd City Council expanded my authority to manage our personnel-related costs. The Manager has had the authority to implement lay-offs as necessary; however, there was not similar authority for other actions that will help us manage our costs, while minimizing lay-offs. This new authority includes: work furloughs, unpaid holidays and reductions to base pay. Again, our goal is to retain as many City employees as possible and manage within the resources we have. This authority applies citywide to all departments, although the measures that could be applied will vary by Key Business in order to meet business needs.
Charlotte Area Transit Service (CATS) has been hardest hit by the economy because it is funded primarily by sales taxes, which are down considerably from the budgeted estimates. CATS has done an exceptional job managing its costs up to this point; however, as revenues continue to drop, additional action is necessary. At 1:00 p.m. today, CATS will be announcing that it will not be paying its employees for the Memorial Day holiday. In addition, CATS will be eliminating up to 10 City positions, the majority of which are currently filled, and up to 40 contractual positions (primarily bus drivers, who are employees of the company that manages Bus Operations on CATS’ behalf).
Other actions outside of CATS may be necessary before the end of the fiscal year, which is June 30th. If additional actions are necessary, I expect them to be very limited; however, it all depends on the economy and its impact on our budget.
On May 11, 2009 I will present my recommended budget to the Mayor and City Council. As I mentioned earlier, we will have less revenue next year than we budgeted this year. Our biggest expense is personnel cost. Unless there is dramatic improvement in the revenues over the next 45 days, I will not be recommending a compensation adjustment for any City employees in the upcoming budget, including step adjustments in Police and Fire. To do so would require laying off literally hundreds of existing City employees, an action that I am not willing to take. Given that we already have hundreds of frozen and unfunded vacancies in the next fiscal year, our service delivery would suffer greatly by taking hundreds more employees out of our workforce; more importantly, this is a time that we close ranks as a City workforce and support each other and support our community, a community which is going through circumstances unlike any it has faced in many years.
Thank you again for your cost-saving efforts this year. Those efforts have resulted in countless City employees keeping their jobs. As we move through the rest of this fiscal year and into the budget process for next year, we will keep you informed about the decisions that are being made and why they are being made. In the meantime, I encourage you to talk with your KBE to get your concerns or questions addressed.
And the City of Charlotte's resolution giving the authorization:
RESOLUTION AUTHORIZING THE CITY MANAGER TO IMPLEMENT
TO REDUCE PERSONNEL COSTS
WHEREAS, the City of Charlotte has been granted the authority to determine employee
compensation and benefits by N.C.G.S. §§160A-162 and 160A-164; and
WHERAS, pursuant to Section 2-121(a) of the Code of Ordinances, City of Charlotte, the
Charlotte City Council has delegated to the City Manager the authority to promulgate and
put into effect rules regarding the layoff of employees; and
WHEREAS, pursuant to Section 2-121(b) of the Code of Ordinances, City of Charlotte,
the Charlotte City Council has retained authority over issues governing employee
compensation and paid holidays; and
WHEREAS, the City Council desires to grant the City Manager authority to implement
actions necessary to reduce personnel costs, including budget-required furloughs, unpaid
holidays, and reduction in base pay;
NOW, THEREFORE, be it resolved by the City Council of the City of Charlotte, in
regular session duly assembled as follows:
The City Manager is authorized to implement changes as necessary to reduce
personnel costs by issuing budget-required furloughs which are compliant with the Fair
Labor Standards Act, including but not limited to, reduction in work days, work hours, or
unpaid holidays; other changes in the holiday pay structure; and reduction in base pay as
This Resolution is effective upon adoption.
This the ___ day of _____ 2009.
I, Stephanie C. Kelly, City Clerk of the City of Charlotte, North Carolina, DO HEREBY
CERTIFY that the foregoing is a true and exact copy of a Resolution adopted by the City
Council of the City of Charlotte, North Carolina, in regular session convened on the ___
day of _______, 2009, the reference having been made in Minute Book______, and
recorded in full in Resolution Book ____, Page(s) ____.
WITNESS my hand and the corporate seal of the City of Charlotte, North Carolina, this
the ____ day of _______, 2002.
Stephanie C. Kelly, City Clerk