TUPELO – The city will slash personnel costs from 65 to 55 percent of the general fund budget over the next two years to free up money for capital projects and infrastructure improvements.
Employees won’t face layoffs in the move, initiated by Chief Financial Officer Lynn Norris. Instead, municipal department heads will trim overtime costs and reassign duties so they can leave vacant positions unfilled.
“Personnel cost is the largest, single cost we’ve got,” Norris said, “and we have to manage it.”
The city currently spends 65 percent of its $32 million general fund budget on personnel.
That’s nearly $21 million annually on its 484 full-time and 120 part-time employees. Costs include hourly wages, overtime, salaries and benefits.
The rest of the general fund goes toward providing municipal services, completing capital projects, purchasing equipment and carrying out other city functions.
Personnel costs shouldn’t surpass 55 percent of the general fund budget, said Norris, who was reappointed to his position in September after having left in 1998 to take a job as a private consultant.
That would amount to $17.6 million in the current budget as compared to the actual $21 million.
During his previous 13-year tenure, Norris said the city’s personnel costs stayed in the 48-50 percent range.
Now that he’s back on the job, Norris said it’s his goal to realign the city’s largest expense. He estimated the effort to require two years.
Municipal leaders currently are preparing the next fiscal year budget, and personnel expenses are projected to drop by nearly 4 percent – or by roughly $743,000.
The reduction comes from a combination of attrition and overtime savings. Overall, Tupelo will lose 10 full-time employees this coming fiscal year versus the current FY. Most occur in the Public Works and Police departments, which lost four and five employees, respectively.
“We’ve had some, of course, retire, and due to the capabilities of existing employees, we feel we can carry on if during our peak season we hire temps,” said Public Works Director Sid Russell. “We feel confident we can provide the same level of service and save the taxpayers a little bit of money.”
Additional savings will come from overtime reductions, especially in the Fire Department, which restructured its staffing schedule to trim nearly $300,000 from that line item.
The City Council must approve the FY11 budget by Sept. 15, including any new capital projects funded through the personnel cuts.
The fiscal year begins Oct. 1.
Contact Emily Le Coz at (662) 678-1588 or firstname.lastname@example.org.
Emily Le Coz/NEMS Daily Journal