A worsening budget situation may force Tempe, for the first time in its history, to lay off employees. Cutting 75 jobs by mid-2010 would bring the city’s books back into balance, City Manager Charlie Meyer said Friday.
Meyer and other city staff members repeatedly noted no decisions have yet been made. But he also admitted it was “not really feasible” to make up the shortfall through other means.
The City Council has scheduled a Dec. 1 workshop to discuss how to best respond to the budget problems. Meyer said he expects a plan to be finalized by the end of January.
Mayor Hugh Hallman said he expected this news: “We’re in a boat filling with water and it’s not getting better.”
Any cuts made would come after the city eliminates, by the end of next year, perhaps as many as 104 positions. City officials are confident none of those are expected to result in actual layoffs, as they will be eliminated by moving employees into other jobs or through attrition.
Tempe is facing deficits this year and into the future, and Meyer has said paring down the 1,800-employee payroll is essential for the city’s long-term financial health.
Other solutions include changing salary/benefit policies and reducing the number of part-time positions and contracted services.
However, the accelerating slide of sales tax revenue plus the lack of return on the city’s investments means Tempe’s financial situation is worse than first estimated, financial services manager Jerry Hart said.
If nothing were done, Hart estimated, Tempe would rack up a deficit of close to $64 million by the end of fiscal year 2011-12.
“The numbers are much more difficult than we had looked at previously,” Meyer said.
That conclusion, which Meyer said was reached Thursday afternoon, means Tempe may join an East Valley neighbor in reducing about 10 percent of its workforce. Mesa is considering eliminating and outsourcing 346 jobs over the next 18 months.