OUR OPINION: City hiring falls with good plan

By NEMS Daily Journal

Tupelo’s quiet movement toward a goal of spending no more than 55 percent of its budget on citywide staffing costs has reduced the city’s employment roll from 478 to 452 since this time a year ago.
The 55 percent goal was identified by Chief Financial Officer Lynn Norris based on his experience as a municipal finance expert and comparisons with other cities.
Some of the reduction has come through attrition (retirements and resignations), some with terminations.
The city’s aim, like the practices adopted in many private-sector businesses, is accomplishing goals and missions with more fewer and more efficient employees.
Reductions so far have cut the spending percentage for payroll from 65 percent of the general fund to 58 percent, which suggests the 55 percent goal could be reached during the 2012 fiscal year, which begins Oct. 1.
Tupelo’s Public Works Department has cut 20 percent of its workforce from a year ago, a status director Sid Russell says is “where we need to be.”
The Journal earlier reported that employees cost taxpayers $21.5 million in salaries, benefits and overtime in 2010, about 65 percent of the city’s $35 million general fund.
All governments, including municipalities, tend to put on employees like people put on pounds – gradually over time, and then find shedding them is difficult.
Strong revenues make adding employees, usually for justified additional services and facilities, relatively easy. When a recession and other factors reduce revenues or positions are added beyond proven need, problems start.
Norris has unique perspective because he served as Tupelo’s CFO previously in a time when employment consumed about 50 percent of the general fund. He appropriately raised the issue in the 2011 budget discussions during the summer and fall of 2010, and he found support on the City Council for proportionate spending.
Norris, the council, Mayor Reed and departmental leaders identified excessive overtime as part of the problem, too, and measures have dramatically reduced it.
The decisions understandably have not been popular among employees and among some citizens. A government job is not a guaranteed job.
Tupelo, in some ways, faces the same kind of revenue situation as the federal government: spiraling costs with revenues not keeping pace. Mississippi’s state government, too, has required some reductions in force.
The federal government usually only borrows; cities like Tupelo must trim expenses, raise taxes, or borrow from cash reserves, which Tupelo has built intentionally over the long term.
Tupelo historically has lived within its means, and as a result the financial picture remains strong if expenses are kept on a short leash.