JONESBORO, AR (KAIT) – Jonesboro Mayor Harold Perrin told Region 8 News late Monday night the city of Jonesboro is slashing $300,000 in personnel costs in 2010. Seven city employees were told they would have to look for another job January 1, 2010.
"What we have done through this budget process, we've been working through this thing very methodically and working with department heads in coming up and looking at personnel costs. Today, we had to actually tell seven people at the city of Jonesboro that we had a permanent layoff with those seven positions," said Perrin.
Perrin said declining revenues and a drop in interest rates have fueled the decline. The city, which started 2009 with $29-million in the bank, is projected to end 2009 with $22-million in the bank. The city expected to spend $8.4-million in reserves, but a drastic drop in sales tax revenue caught the city off guard.
The city is trying to make up for a $2.5-million shortfall in sales tax revenue. That's roughly the entire budget for the Jonesboro Street Department.
Scroll down to read the statement from the mayor.
"That's tough to do, but with the economy the way it is, there's going to be some other things that you'll see as far as reorganizing and restructuring job descriptions in the future," said Perrin.
Perrin said he also wants to update the city council more often in 2010, promising to show the public where each dollar is going.
"One of the things we're going to do in 2010 is that we're going to accrual accounting. I will show the public every month on cash flow coming in and where it's going month by month," said Perrin. "This conversation started about March after you get through those sales tax figures after you get through January and February, which is November and December, after the Christmas spending, you start looking at reality."
"We looked at retirement and people who might retire in 2010 in the beginning. We also looked at positions that we have here that we have not filled in 2009 that have come up. We have worked with attrition," said Perrin.
Perrin said the total amount of savings on job losses and retirements will be released when the budget is submitted to the Jonesboro City Council. Perrin said he hopes to have a proposed budget to the council by November 17.
Perrin said the city was down a projected $1-million in interest income.
"That would actually fund the total cost of the planning, code enforcement, animal control and probably one other department. You can see just how one item, a million dollar loss in interest income, how that affects your budget," said Perrin.
Perrin said the seven people notified are all in administrative roles. Each person was told they would be paid through the end of the year, including benefits and holiday pay they accrued.
"We're trying to do everything we possibly can to come up with a balanced operating budget," said Perrin. "You've got to look at all of the expenses and that's what we're doing now. We've got to trim our operating costs in each department through the entire city," said Perrin.
"I think Jonesboro is going to be bright. It's going to look good. We've got Olive Garden that's going to open up restaurants. We've got Best Buy, which I think will have a great Christmas season. I think the economy is going to pick up a little bit, but a lot of our indicators show that it'll come up and it may make another reaction or an adjustment," said Perrin.
Statement from the Office of Mayor Harold Perrin
The recession of the national economy that started in 2008 has slowly impacted various parts of our local economy over the last year and a half. While we remained somewhat insulated during the early stages of the recession, progressively our city and county have begun to feel the impact of decreased building activity, job losses, and a decline in local sales tax.
Cities and counties all across the state are being forced to reorganize and restructure to meet the challenges of providing services with lesser resources than have been available previously. Unfortunately, Jonesboro has now joined those other local governments.
Our local sales tax revenue could be as much as $2.5 million dollars below budget by the time we end 2009. Sales tax collections are not only below budget, but have regressed as compared to just one year ago; and the disappearance of the growth to which we have become so accustomed and staffed to meet is forcing us to deal with the situation with due diligence.
It is becoming increasingly obvious that a full recovery, or whatever the recovery lends itself to be, could be several years in the making. Many economists are predicting that we will experience periods of prosperity followed by subsequent periods of adjustment. Those predictions lead us to believe that whatever short term solutions we find to our current situation may or may not be enough to sustain us for the long term.
For those reasons, as well as our commitment to the citizens to run their government as efficiently as possible, we are being forced to reorganize our operations and adjust our staffing to meet these new demands. For some, jobs and duties will change. For some, they may be reassigned to different departments in an attempt to utilize experience in new and innovative ways. And for some, positions have regrettably had to be eliminated.
The process of reorganizing was done with tremendous diligence and the highest regard for those most directly impacted. We established as a priority the practice of utilizing as many opportunities as possible to take advantage of attrition by capturing savings on unfilled positions, capitalizing on retirements, and as a last resort, reducing existing staff.
We, as a team, have labored over this reorganization for days and hours on end. We have, over the course of the process, become frustrated, perplexed and heartbroken. To lose one member of our team is one person too many. But in the end, we were forced to make some very tough decisions that we absolutely did not want to make. Ultimately, several administrative positions were eliminated. I do not envy our management staff and department heads that had to make the final decisions on exactly how the reorganization would impact their respective departments. I am proud of the compassion and care displayed by each and every one of them; and I know that none of the decisions were easy.
The end result will be a leaner, more diversified administrative operation. We will be forced to do more with less, and to compensate for the loss of some very dedicated and talented individuals. This is not just an exercise in reducing the cost of payroll; it is an attempt to begin an overhaul of a system that will in turn become more efficient and accountable to the citizens it serves.
It is our prayer that we are able to help find employment for every displaced member of our team in the private sector. We are working diligently to try and help them find new employment with companies that will benefit from their loyalty, experience and work ethic. No one is leaving the city of Jonesboro for any reason other than the conditions that have forced us to rethink how we do business. Each and every person will be an asset to whatever future organization is fortunate enough to have them.
While this is a sad day for us in city government, we do remain optimistic that our local economy is showing signs of resilience. Local retailers are optimistic going into the holiday season; new national chains like Best Buy and Olive Garden continue to find our market attractive; new companies like Nice-Pak and Nordex continue to progress and create new jobs; existing members of our business community like Alberto Culver, Frito Lay and Nestle continue to expand and add jobs; and we are actively negotiating with new industry and developers on a weekly basis who see our community as a bright spot on the national landscape. A private report compiled by PortReal, LLC recently listed Jonesboro as one of its "Top 20" markets for residential real estate investment in the fourth quarter of 2009.
We have a lot to be thankful for in Jonesboro. We are truly a blessed community with a rich heritage and a bright future.
We have been diligent in our attempts to address this reorganization from an administrative perspective, and to do little if anything in the way of impacting direct service to the community. We have been careful to not impact the interaction of our police, fire, animal control, E-911, parks and sanitation departments with the people we serve. As we move into our next phase of planning, we will continue to be forthright and transparent in our attempt to preserve these services.
Until then, we ask that you pray for wisdom and discernment for those who are working to find solutions to these issues; and for each and every family that has been impacted by our current reorganization.