Mayor Proposes 10% Pay Cut

Mobile Mayor Sam Jones is asking the city council to approve a 10% pay cut for all city employees.

In a letter to the city council, Jones blamed the city's $14.4 million budget shortfall on the national economy. "These extraordinary circumstances call for a fair and immediate approach, shared responsibility and shared sacrifice," Jones said in the letter.

Barbara Drummond, a spokesperson for the mayor, says if the council does not approve the across the board pay cut, then 300 city employees will be laid off. The pay cuts and the lay offs would include police and fire fighters.

"I do not relish taking such actions," said the mayor, who agreed to take the same pay cut as city employees. "An immediate solution is only achievable with a reduction in our personnel cost. The fairest way to reach this goal is a 10% across the board salary cut," he wrote in the letter.

In addition to the paycut, the Mayor says he has also asked department heads to slash 25% from their operation budget since the first of the year, reduce overtime, reduce travel, training and equipment purchases. The city has also implemented a hiring freeze except for in the police and fire departments, according the mayor.

City employees are upset about the possible pay cuts. Officer Ron Wallace spoke to News 5 before the city council meeting. Wallace said he and other city employees would like to meet with Mayor Jones to come up with other ways to balance the budget without cutting salaries.

Mobile is required under Alabama's Zoghby Act to operate with a balanced budget. Mayor Jones says he must fill the $14.4 million gap by September 30.

The Mobile City Council's pre-council meeting is underway. Their public council meeting begins at 10:30 a.m. News 5's Jessica Taloney will be there. Click here to follow her on Twitter.

LETTER FROM THE MAYOR:

March 30, 2010

To: The Mobile City Council
Reggie Copeland, President
Fred Richardson, Vice President
William Carroll, Councilmember
Jermaine Burrell, Councilmember
John Williams, Councilmember
Connie Hudson, Councilmember
Gina Gregory, Councilmember

Dear Councilmembers:

The City of Mobile is at a crossroads as it relates to budget shortfalls, due to the downturn in the national economy. Though it may be expedient to blame or point to variables which do not have any measurable impact upon our current financial situation, this is a time where we must work together to address the issue.

Please know that I along with my staff and every department head in city government have spent three exhaustive months looking at the budget and possible reductions, based upon the financial forecast that continues to show a consistent drop in city sales taxes.

We have explored countless options, including staff layoffs, which would assuredly lead to the elimination of some services to our citizens and further increase the local unemployment rate, which is approaching 13% - the largest in any metropolitan area in Alabama.

In preparing a proposal for immediate measures for the remainder of this fiscal year in the midst of a severe national recession, we faced many challenges and tough choices. Our rising unemployment, coupled with the dwindling sales tax base, has hit Mobile just as hard as they have hit families and industries across the nation.

What we are facing is a simple but stark choice about how to close an estimated $14 million budget deficit. Do we deeply slash municipal services or push thousands of city employees into unemployment? Do we do what is necessary to keep city government operating or what is politically popular? These are real possibilities that were created by one of the worst economic crisis in the history of our country.

It is vital, if at all possible, that we not add to the burdensome woes facing families and businesses. Please note that we have already taken measures to reduce the operational budget for the city. They are:

Cut department’s operational budgets by 25%, trimming items that will allow the city to continue an adequate level of services;
Reduced overtime;
Reduced equipment purchases;
Reduced travel and training;
Froze hiring, with the exception of police and fire;
No filling of vacant positions.
Following a thorough review of the budget, it is clear to us that these measures won’t generate enough funds to absorb this deficit. An immediate solution is only achievable with a reduction in our personnel cost. The fairest way to reach this goal is a 10% across- the-board salary cut. Please be mindful that we have also assessed the impact of reducing salaries for certain employee classes; however we found that this approach would not be adequate in eliminating the deficit for the five months remaining in this fiscal year.

Please know that I have agreed to take the same salary cut that will be sustained by our employees; therefore I encourage City Council members to follow suit.

As you know the actions being taken are completely necessary for the City of Mobile to be in compliance with the Zoghby Act.

The economy’s downturn has affected all levels of government – state, county, city, as well as our school system. The one thing that we have in common is that we cannot control the national economy or precisely predict the economic forecast.

These extraordinary circumstances call for a fair and immediate approach, shared responsibility and shared sacrifice, and the willingness to make changes that close the deficit today and lay the groundwork for a secure tomorrow. I DO NOT relish taking such actions. I realize the City of Mobile has some of the most dedicated employees. However, we also have a responsibility to citizens. The fairest measure to insure continued employment for city workers and the responsibility entrusted in each of us by citizens is the aforementioned proposal.

I know that shared responsibility and shared sacrifice are already at work in the homes and businesses across Mobile. Working families are stretching and cutting. Employees in the private sector are working fewer hours or taking pay reductions to maintain their jobs and the jobs of their co-workers. These are tough decisions, but through our shared responsibility and shared sacrifice we will weather this economic crisis together, and emerge stronger when we recover.

These solutions alone will not balance the budget. In total, if no other actions are taken, the city’s general fund operating cash would be depleted by June 1. I wholeheartedly recommend these cuts and measures be approved immediately to avert any further erosion to the city’s ability to operate.

I know this action is not easy. Overcoming these challenges will demand patience, focus, collaboration, and creativity. However, there are critical city services and thousands of jobs at stake. During this time of crisis, it is up to all of us to think of the greater good, see the bigger picture, and take action to protect jobs and preserve vital services.

Sincerely,

Samuel L. Jones