Budget Crunch Forces Layoffs in Ludlow, More Could Follow
The City of Ludlow public works department was cut in half this week amid concerns over a looming budget deficit.
Director Patrick Walkenhorst and another full-time employee were let go earlier this week, Police Chief and interim City Administrator Scott Smith told The River City News. That leaves the department with just two employees.
Smith said that further layoffs could be on the table. There are forty-one full- and part-time staff in the city.
"It's more serious than I realized," Mayor Josh Boone said of the city's budget situation. He was elected mayor last November after serving on city council. "We were told we were facing about a $200,000 shortfall last September. Then, when I came in in January, I was under the impression it had been filled through different cuts and revenue that had come in. That doesn't seem to be the case."
Boone fired city administrator Elishia Chamberlain earlier this month. He said the budget issue was a concern but not the reason for her dismissal.
Smith will serve as police chief and city administrator indefinitely while the city works through its financials. "I have no plans on filling the city administrator role. We need to get through the fiscal year," Boone said. The fiscal year ends June 30. In the meantime, various tasks will be delegated among the remaining staff.
A full-time administrative assistant resigned recently and that role also won't be filled.
When asked whether the police department could see cuts, Chief Smith said all options are on the table.
Right now, the city is still in the midst of its annual audit. Boone and Smith said that the auditing firm could present its findings in May, much later than is usual for local cities who undergo the standard procedure of an annual audit. Some warning sides emerged during the auditing process, they said.
No criminal activity is suspected, they said. "It's a series of issues that led to this point," Smith said.
The projected budget deficit for the current fiscal year is approximately $200,000. The city's operating budget is around $4.5 million. The city also has a $350,000 tax anticipation note (TAN), an amount of money governments borrow to cover expenses until tax revenue is collected. Smith said that Ludlow will likely roll that debt over.
Smith and Boone confirmed that part of the outstanding debt is related to the city's new train viewing station near the city building. That project is responsible for $103,000, or a little more than half of the debt, Smith said, calling it unaccounted for or mismanaged.
For now, in addition to the two layoffs and no plans to fill the city administrator or administrative assistant jobs, the city building has cut back on cell phone allowances and other services, Smith said. "We are now picking up slack," he said, "internally and around the city."
Last week, city council approved a 2 percent increase to its insurance premium tax, which could generate about $125,000 when the tax bills are collected later this year.
And remaining staff members are handling the situation well, Smith said.
"This staff, across the board, police, fire, everybody, have been completely supportive and volunteering to make sacrifices," he said.
Written by Michael Monks, editor & publisher