City Manager Jon Jennings on Wednesday presented his recommended budget to city councilors, who will grapple in the coming weeks with ways to save as many services and staff as possible while dealing with a drastic drop in revenue flowing into city coffers because of the pandemic.

Jennings said his original budget, completed in March, would have increased property taxes by 1.8 percent, but the economic fallout of the COVID-19 pandemic prompted him to reverse course.

“In light of the ramifications we are now facing with the pandemic, the budget we now present to you is drastically different,” Jennings told the council’s Finance Committee during a virtual meeting. “It does include a tax decrease for FY 21, which I felt was very important for residents and businesses and others during these difficult economic times.”

The revised $202 million municipal budget proposal, excluding school spending, represents a $4.2 million spending reduction from the current budget and would decrease the city’s property tax rate by a penny per $1,000 assessed value, despite a 4 percent increase in county taxes.

Although new development will bring in an additional $987,000 in property taxes, the budget projects a nearly $12 million loss in non-property tax revenue, according to a budget memo to city councilors. Projected revenue losses include: $3.2 million in parking, $2.5 million in parks and recreation from canceled programs, $2.1 in facilities and waterfront from the lack of cruise ships, $1.5 million drop in state revenue sharing and $1 million in excise tax revenue.

Jennings’ budget would eliminate about 65 full-time positions, including 32 that are vacant. A city spokesperson said that would result in 37 people being laid off, many of whom are with parks and recreation programs, and five people would have hours reduced. The city employs 1,400 people.

Since March, nearly 700 furloughs have been ordered across all city departments, including leadership, the memo said. Freezes on nonessential hiring and nonessential spending also have been in place.

Five of the city’s eight labor unions will not receive any cost-of-living increase this year, since they are currently negotiating contracts, according to the city’s finance director. The city’s Professional and Technical union agreed to forgo its 2.75 percent increase, but the city’s largest union, City Employee’s Benefit Association, and the Labor and Trades union voted to maintain their COLAs, which total $400,000.

Nonunion workers, who account for 10 percent of the city’s workforce, will not receive a COLA or any performance pay increases, according to the budget memo.

While most departments are dealing with cuts, health and human services was one of four to receive a budget increase. Budgets for permitting and inspections, as well as the city clerk, saw slight increases, with the latter being raised because of the presidential election and the expansion of ranked-choice voting. The budget also includes a reorganization, combining the housing and economic development departments, which shifts costs from planning.

Jennings proposed a $1.75 million (11 percent) increase in the health and human services budget to $14.6 million, primarily reflecting a new state law that makes asylum seekers eligible for General Assistance. Some staffing and outreach efforts will also be increased, according to the budget memo.

Meanwhile, parks and recreation is facing the largest cut with a proposed 20 percent reduction, which includes the elimination of 32 positions. The reductions also will impact community gardens, elder and child care, and park and cemetery maintenance, including compliance with the city’s pesticide ordinance.

Spending reductions also are proposed for police and fire departments, according to the memo.

Jennings recommended decreasing the police budget by $1.1 million, or 3.2 percent, eliminating two school resource officers and one community policing position. The fire department is facing a recommended reduction of $430,800, or 2.4 percent, including the proposed elimination of the division chief position overseeing fire prevention and community outreach.

Public works could see a 6.7 percent reduction, including the loss of seven positions. The cut would reduce road-striping from twice a year to once a year and eliminate the collection of spring yard waste and recyclables on holidays. It also reduces contracted services for snow plowing, meaning it will take longer to clear the roads.

Councilors will continue their budget review Thursday and next Wednesday. A public hearing before the Finance Committee has been scheduled for Sept. 2, with a final public hearing before the council and vote slated for Sept. 21.

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