ACES Letter to Mayor & Council – Cost Saving Ideas

ACES – Ashland Citizens for Economic Sustainability             

May 29,2020

Dear Mayor Stromberg and City Council:

We are dismayed with the lack of substantive progress on cost reductions in response to the Covid-19 crisis and the structural deficit that already existed in the budget.  Yet, we hear talk that the deficit for the next budget cycle could exceed $10 million and wonder why no action is being taken.

Provided below are ACES suggestions for cost cutting measures some of which were included in letters to you dated April 5th and May 5th.  In response to those ideas, councilor Akins is the only elected official who reached out to us. The reality is that our city government, nearly 3 months into this crisis, the city has taken few meaningful steps.

Implementing a number of these ideas would free up funds to cover the deficits in TOT and Meals taxes as well as make available funds to help our citizens and business community during this difficult time.

This can’t be business as usual.  As the Mayor said in a recent letter, Council is elected to make hard decisions.  Well, this is the time to act to ensure Ashland’s fiscal sustainability. Your constituents are waiting!

Proposed Administrative Cost Savings: (Based on data in the 2019/21 budget.)

Reduce salaries of all city staff by 15% immediately: would save city $270,000 a month. Follow the examples of SOU, our state government and other cities in Oregon.

Cut salaries by 25% for those with total compensation over $125,000 a year.

Furlough non-essential staff immediately, not only part-timers but full-time staff as well.

Cap/stop all personnel cost increases to all employees immediately.

Stop all incentive pay until 2022 (e.g. travel costs for top city staff living outside of Ashland).

Require non-union staff to immediately begin picking up the employee’s share of PERS costs and make all staff contribute their share by the end of the biennium.  This could save $1.2 million per year.

Cut 2% health care HRA Veba to all staff immediately. This could save $200,000 per year.

Increase health care contributions for all non-union staff to be in line with the Oregon private sector.

Eliminate immediately the “make whole policy” for city staff.  Why should salaries/benefits be increased to offset increases in employee’s share of health care premiums?

Freeze all new hires.  Stop using recruitment firms to conduct searches (with the exception of the City Manager position) until the next budget cycle.

Follow the lead of the Ashland School District by having a city representative immediately renegotiate with all unions.

Reevaluate all CIP projects to ensure they are absolutely essential for the future of Ashland.

Reduce the Materials and Services budget:

As city operations have slowed in most areas, there will be fewer purchase requirements.

  • Cut 10% from supplies – saves $250,000
  • Cut 20% from rental, repair and maintenance – saves $2 million
  • Cut 10% from contractual services – saves $2 million
  • Cut 10% from other purchased services – saves $1.9 million

Cut funding to the equipment budget by 40%.  Potential savings $1.2 million

Move forward aggressively to sell non-essential city properties.

Convene the budget committee and ask for help and additional ideas on cost savings for the city.

Reduce costs in the General Fund and other departments: 

  • Reduce Parks contribution by 5% to 10% which could free up to $1 million in the General Fund.
  • Reduce Community Development Department budget as was recommended during the budget process.  This could save $360,000 a year.
  • Delay all funding for 3rd party research and consulting related to Capital Improvement Projects until the 2022 fiscal year.
  • Make City Manager responsible for Public Works and don’t hire a new Public Works This could save $225,000 a year.
  • Outsource Ambulance Service before the renewal of the ASA contract.  The Fire/Ambulance budget is over $19,000,000 and this could save taxpayers $2 million a year.
  • Outsource the Human Resources department.  Make the Finance Director, when recruited,responsible for Human Resources.
  • Close Energy Conservation Division to eliminate duplication of efforts with CEAP.  This could save a minimum of $730,000 in personnel costs.
  • Streamline customer service utility billing department. Outsource tax collected via F&B and TOT, business license data, tobacco licenses and electric user tax.  Offer incentive discounts to increase participation in paying bills via credit cards.
  • Outsource Information Technology Department with 8.25 FTE’s by hiring a VAR (value added re-seller) to bundle all computer services.
  • Due to the crippling impact of Covid-19, review economic development and tourism programs including the $500,000 given annually to the Chamber’s VCB
  • Cut, or reduce substantially, community development and social services grants.

We hope you understand the urgency of addressing the city’s budget.  We look forward to a thorough discussion of the above and other cost savings ideas as part of the supplemental budget discussion at your June 2nd meeting.

NOTE ON SOURCES: The cost cutting proposals we have forwarded come from former city finance directors, members of the Citizens Budget Committee, actions taken by other cities, proposals considered by Councilor Slattery cost-cutting ad hoc committee, ACES members and others with experience in municipal finance.