City of Osage Beach taking ‘painful’ steps to minimize revenue loss
The city of Osage Beach is taking “painful” steps to help minimize an estimated $4.2 million loss in revenue due to the impact of COVID-19 on businesses.
The board of aldermen recently approved three segments of a proposed ordinance that would begin to reduce expenditures for the city.
“In response to the pandemic situation and the anticipated decrease in city revenue sources, many expenditure cuts have been considered to re-balance the budget,” City Administrator Jeana Woods told the board in a recent meeting packet. “Cuts include personnel expenditures needed to meet the decreased revenue projection.”
To meet the Pandemic Illness Emergency, a change in the definition of a full-time employee was approved. Previously, in order to qualify for benefits, an employee had to work 32 hours per week. Under the new rules, employees must work 24 hours in a week to qualify for benefits. This is pandemic related.
The new, temporary rules apply to all full-time employees in all departments. Contrary to some social media posts, no particular department is being singled out for changes.
“We can go back to the drawing board and reassess how to make cuts in personnel costs,” she told the board as it wrestled with its options. “But three months from now, I won’t have time to recover operationally and still meet the city’s needs. Yeah, it’s painful.”
Woods noted that half of the $4.2 million in reductions will come from the city’s reserves and the other half will come from not only personnel but also operations and maintenance expenditures and capital expenditures.
Employee benefits account for about 26-27 percent of the city’s overall expenditures.
Woods said the changes are to help preserve cash flow on a temporary basis at a time when sales tax revenue and other revenue sources are down. Most businesses have been shuttered or have had their hours reduced due to the health department and state COVID-19 requirements.
Employees will absorb some of the increased costs of health insurance.
The city pays 100 percent of a single employee’s health insurance premium, but only a portion of employees with a spouse and/or children. After the changes approved recently, the city will pay 85 percent (down from 90 percent) of the monthly premium for employees with a spouse and/or children.
•An employee with a spouse will pay $36.98 more a month
•An employee with children will pay $36.98 more a month
•An employee with a family plan will pay $48 more a month
In addition, the city pays $900 annually toward a single employee’s Health Savings Account and $1,800 toward all other categories of employees and/or spouse or children.
A $250 annual stipend for all full-time employees to be used for health care costs was eliminated.
Under the new rules, the city administrator has the authority to suspend the program for up to one year. Only two employees would be affected.
The new language allows the city administrator to convert education incentive pay to comp time for up to one year.
Woods said she and her staff will closely monitor revenues. The city has furloughed several employees to help reduce personnel costs. If revenues are higher than expected, Woods said she would begin to bring employees back to work.
Department heads were also asked to defer any non-essential purchases until the budget picture improves.