WEST JORDAN — A Utah city is looking to shrink its workforce as sales tax revenue projections plummet amid the global coronavirus pandemic’s economic downturn.
West Jordan Chief Administrative Officer Korban Lee sent a letter to city employees this week asking “with a heavy heart” for volunteers who would be willing to retire early.
“As you may be aware, the shutdown of businesses due to the COVID-19 pandemic has intensified what was already a very challenging financial situation for the city,” Lee wrote in the letter. “Unfortunately, we are facing a budget that requires a major restructuring and will need to include a reduction of personnel.”
Lee asked employees to let city administrators and department heads know if they’d be willing to voluntarily leave their positions by Monday. He said the city is offering eligible volunteers either three months of wages and three months of health insurance benefits, or an equal COBRA insurance package. Other leave benefits such as vacation time would also be paid out, according to the letter.
“This is very difficult for me, and for the mayor,” Lee said. “The next few months are going to be challenging for all of us.”
Tauni Barker, the city’s spokeswoman, said Friday the city will likely need to make up to $8 million in budget cuts, and “our goal was to explain the budgetary situation to employees” while also giving them a “degree of choice.”
“That’s why we offered this voluntary separation option,” she said.
Given the current economic troubles and record unemployment numbers due to COVID-19, Barker said city leaders wanted to be transparent about the troubles ahead.
“Any consideration and compassion we can offer at this time is vital because right now we know every paycheck counts,” she said.
The city’s employees account for almost 70% of the city’s expenses. Last year, West Jordan leaders approved a roughly $59 million total budget.
As of Friday, Barker said several employees had already let city administrators know they’d be willing to retire now if it meant saving the job of another employee who wanted to keep working.
“One of the things that has really risen to the top through this process is really the compassion our employees have for one another,” Barker said.
It’s not yet clear how many positions the city will need to cut, Barker said, but the hope is enough employees will voluntarily leave their positions that there are no forced staff cuts.
“As a municipality that provides vital services to residents, we need to make sure we’re fully funding public safety officers” and other important city functions, Barker said.
She said staff reductions are just “one piece of the puzzle” city officials are working with to balance the budget this year as they head into the May budget process with the City Council.
“There are going to need to be cuts and creative solutions in every department,” she said.
The West Jordan City Council is slated to finalize the budget in May. Councilman Chris McConnehey told the Deseret News on Friday the city’s upcoming budget situation is “concerning,” but he’s appreciative of West Jordan City Mayor Dirk Burton and his administration, particularly the city’s finance director, for working with City Council members to find solutions.
“I appreciate the mayor’s staff being proactive and reaching out before the concern becomes a crisis and so we can partner with the employees and give them the choice,” McConnehey said. “I appreciate the compassion that’s being exercised as we’re trying to figure out in times of trouble which of our employees can benefit.”
As officials urge Americans to stay home to shield themselves and their families from the highly contagious virus, the state’s and nation’s economy has been thrown into upheaval, with some businesses forced to close their doors. As a result, sales tax revenue projections have taken a hard hit, affecting government budgets at all levels.
In Salt Lake County, leaders have been bracing their government budgets for an economic downturn. Fiscal analysts’ estimate the county will see a $78.5 million drop in one-time revenue. County officials estimate they’ll need to make $10 million in additional cuts this year, but they aim to prevent any county employee layoffs.
Cameron Diehl, executive director of the Utah League of Cities and Towns, said his organization is currently surveying cities asking about possible staff reductions. The results of that survey are pending, he said, but it’s no question that COVID-19 is challenging cities across Utah.
“On one hand we’re seeing revenues shrink because of impact on the economy, and on the other hand we’re seeing expenses go up because of first responders and other emergency needs,” he said. “The private sector and the public sector are both feeling the drastic impacts of COVID-19.”