GR Manager: City services will suffer

GRAND RAPIDS, Mich. (WOOD) - The city of Grand Rapids laid off 65 fewer people than the 110 outlined in a cost-slashing plan announced in November.

But the number of positions left empty -- 137 including jobs already left unfilled when the cuts were announced -- will remain the same.

"To somehow think that it's possible to continue to provide every service that we have in the past, with the same frequency and the same timeliness is really unreasonable," City Manager Greg Sundstrom told 24 Hour News 8.

On Tuesday morning, city commissioners got their first look at results of the reorganization plan announced in November, which aimed to cut $10.5 million, $3.5 million this year and $7 million from next year's budget.

"I do want to make crystal clear that on Nov. 10, I estimated the cost savings to be about $10.5 million from this round of layoffs and we will be saving every bit of that," Sundstrom said.

But some of those who received layoff notices in December were able to keep their jobs.

Sundstrom said various labor contracts allowed higher seniority employees who were laid off to move or bump into other positions, mainly in departments that receive revenue from sources other than the general fund -- such as water, sewer and parking.

In other departments, such as police, employees were saved by reorganizations and outside funding sources like federal grants.

Many officers saved by reorganization had to switch to lower-paying desk jobs and emergency dispatcher positions.

In the fire department, union members agreed to fund a special retirement program allowing 13 senior firefighters to retire, preserving the same number of lower-seniority firefighters.

"That's just incredible that our fire union and the city could work together to try to maintain those jobs," Sundstrom said. "And we've seen it in departments across the city -- police and fire, particularly."

But 45 city employees, including 14 police officers and five firefighters, lost their jobs in December.

Five mid-level managers were laid off as part of the reorganization of a number of departments. Seven higher-level managers were given additional duties.

"Days are gone when managers sit at a desk and all they do is make decisions and manage," Sundstrom said. "All of our management employees are working throughout their entire work day on projects and work just like any city employee."

As many as 10 more employees, most of them attendants in Parking Services, will lose their jobs when the city privatizes parking booth operations later in 2010.

Although the layoffs are not as severe, the city's overall workforce has been reduced 25 percent since 2002. Residents will notice the impact, Sundstrom said.

"The city has made huge strides in its efficiency, both with technology and by leaning our operations to really minimize the effect on our citizens," he added. "But we're at a point now where really, we're running out of ways to reduce staff and not have significant impact on our service delivery."

Asked whether some residents may view November's announcement as "crying wolf" over the budget, Sundstrom said the impact on the city's general fund -- the portion of the budget funded mostly by dwindling income and property taxes, along with state shared revenues -- is in trouble.

The dramatic cuts are brought on by a financial situation that continues to deteriorate. Income tax receipts are expected to be down $1.1 million this year and another $2.5 million in the next budget year.

State revenue sharing is expected to drop $3.8 million this year and another $2.3 million in the 2010-11 budget cycle. Property tax levels -- already hit hard by troubles in the housing market -- are expected to decline further in the next two years.

A deficit pegged at $3 million for the rest of his fiscal year, which ends in June, has grown to an expected $9.2 million. A $21 million deficit expected in 2011 could grow to $27 million.

"Yes, we were able to find jobs for employees in other funds -- in like, the water fund, in the sewer fund," Sundstrom said. "But we're still realizing the full impact of those savings in the general fund."

And, he said, he can't predict whether these cuts will be the last.

"I don't know what's going to happen with tax revenues that citizens pay in. I don't know what's going to happen to state revenue sharing that the state pays to the city," Sundstrom said. "We need to learn to live within our revenues."

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Grand Rapids city information (pdf)