The worsening economy has found its way into Blue Springs.

Eric Johnson, city administrator, issued a memo to city staff this week addressing what is becoming a common concern for cities throughout the country: a decrease in sales tax revenue.

The worsening economy has found its way into Blue Springs.
Eric Johnson, city administrator, issued a memo to city staff this week addressing what is becoming a common concern for cities throughout the country: a decrease in sales tax revenue.
Johnson indicated that the city, five months into its 2009 fiscal year operating budget, has experienced a 10 percent decline in  its sales tax collection. Translated into dollars, that’s $250,000.
And it could get worse.
In fact, Todd Pelham, assistant city administrator, said the city is anticipating a $1 million shortfall for 2009.
“We’re taking this very seriously,” Pelham said Thursday.
Passed by the City Council in September 2008, the current $51.9 million budget runs from Oct. 1 through Sept 30. As the city does every year, staff has kept a close eye on incoming sales tax revenue, which is the largest source of income to the city’s general fund, along with licenses and permits, charges for services, interest income and others.
Following the holiday season, the city began noticing that typical sales tax generating areas like car sales and retail were down. And with those losses come the after effects, specifically in licenses and permits.
“All of these sources of revenue are down,” Johnson said in the memo, “and, based on staff’s analysis of the trend, they are projected to further decline through the end of our fiscal year.”
The city has in the meantime responded, implementing the following changes:
n Suspending pay raises for all employees.
n Directing staff directors to reduce overtime whenever possible.     
n Reducing various operating supply amounts and contractual categories.
n Delaying the replacement of operating equipment, including the purchase of police cruisers, code enforcement vehicles, and public works vehicles.
n Reducing travel and training expenditures to reflect only critical items directly required for job performance.
n Job vacancies other than public safety positions will not be filled, though Pelham said each vacancy will be looked at individually and kept open if there are no negative effects.
This year’s budget allotted funds for four new police officers, according to Troy Pharr, spokesperson for the department. One officer has started and the remaining three are in the academy.
Pharr said the department will not hire additional officers this year, but rather wait until the 2010 budget to make such a request – if at all.
n Reassigning and reallocating staffing resources (in some areas) based on workload and available funding.
By suspending annual pay raises for staff, Pelham said the city expects to save about $280,000. By delaying capital purchases like vehicles, the city expects to save about $400,000.
“Informing city employees about the pay raises was tough,” Pelham said.
On the positive side, Pelham said the city isn’t anticipating  any layoffs at this time. At the same time, however, personnel services, or staff, accounts for 33 percent of the total budget and 61 percent of the general fund.
“At some point it becomes about people,” Pelham said. “But it’s not at that point.”
Economic forecasters claim the recession will worsen during the year, and Pelham said the city is already preparing for next year’s budget and how it will affect city services and the 278 full-time employees.
In the Kansas City area alone, 200,000 jobs are expected to be lost this year; workers throughout the United States filed 667,000 new claims for unemployment insurance last week, according to the U.S. Department of Labor.
“Next year could be just as difficult,” Pelham said.
He said the City Council may hold a work session in March to begin talks. Some of the discussion will likely include prevention techniques the city already uses to help soften economic blows. After discovering the trend late last year, Pelham said the city implemented a policy where money allotted for expenditures could not be spent until a specific time.
“That helped,” he said.
Mayor Carson Ross said basic services and safety will not be affected during the city’s difficult time.
“This will eventually turn around,” Ross said of the economy. “We just hope it’s not long term.”