Next year's budget gap was estimated at $44.6 million, calculated as the potential shortfall in funds if the city took no action to reduce expenses and no action to increase revenues.
SPRINGFIELD – The city’s finance team and Mayor Domenic J. Sarno, faced with a potential $46.6 million budget gap next fiscal year, are exploring remedies ranging from union concessions to use of reserve funds to pare down the deficit.
Lee C. Erdmann, the city’s chief administrative and financial officer, in a report to the City Council on Monday, said he, Sarno and the Finance Department, have made initial decisions that reduce the budget gap from $44.6 million just one month ago, to a current gap estimated at $14.9 million.
The proposed budget for next fiscal year, which begins July 1, should be ready for presentation to the council by the first week of May for its consideration, Erdmann said. By law, the council can cut the budget but cannot add expenses.
Lee C. ErdmannErdmann said the reduction of the budget gap was accomplished in part by the assumed use of $12.5 million from the city’s stablilization reserve “rainy day” fund.
In addition, departments’ budget proposals, as directed, have reduced expenses by a total of $8.9 million thus far, including the elimination of most vacant postions, a hiring freeze, and reduction of overtime for the police and fire departments, Erdmann said.
Ideas for eliminating the final $14.9 million budget gap include a proposed trash fee generating $3 million in income, with the mayor proposing a graduated bin system that would charge residents based on the size of their bins. The current trash fee, which is $75 per bin, also generates roughly $3 million annually, and is slated to expire June 30, unless extended by the council.
In addition, Erdmann said another option under consideration is a wage freeze, that would save an estimated $1.8 million. Other union concessions are also under consideration, he said.
“Union negotiations will need to be completed to achieve such savings,” he said in an executive summary.
In other action Monday, the council:
Õ¤Voted to accept a $500,000 state grant from the Sen. Charles E. Shannon Jr. Community Safety Initiative, to combat youth and gang violence. The grant acceptance was briefly delayed in March as councilors sought more information on who was receiving the money and the process used.
Õ¤Voted to approve plans by the owners of the former Holiday Inn on Dwight Street to pursue an application for a $2.5 million federal, low interest loan to revitalize the hotel as a new La Quinta Inn & Suites.