From AP - News Headlines -

Champaign Asks City Staff to Develop Contingency Plans in City Budget

Champaign department heads and employee unions are being asked to develop contingency plans should rising costs and the poor economy force further cuts in services.

City finance director Richard Schnuer said the first $1 to $2 million in suggested cuts should be prepared by November, but he said departments could be asked to seek out an additional $4 million in cost reductions early next year. If the city has to act, Schnuer would not speculate on what areas could be cut, but he said that it is unlikely any department would go untouched. Schnuer added that employee compensation has become one of the key areas that could force these decisions.

"We had hoped that we would be able to have an agreement with the bargaining units to have a short-term contract that would have no increases to help us get us through this year, and hopefully, with the economy beginning to grow we'd have some more money for increases at at later time," said Schnuer. "But we have been bargaining for several months now, and unfortunately, that has been unsuccessful. We see that we will be paying some kind of increases."

Schnuer also noted that under Illinois law, police and fire unions can bring an arbitrator if they do not reach an agreement in negotiations. He said a number of parties at the state level want to reduce the share of income tax that goes to local governments.

"That would cut us close to $2 million based on proposals that have been made," said Schnuer. "We would like to think the state would balance its budget without reducing revenues to our city, but certainly, that may not be the case."

Schnuer also said the city is not counting on revenue growth in the current year. Schuner said there have already been more than $8 million in cuts in the last three years, primarily coming from city administration and public works. Proposals will be posted for city council consideration by November, but Schnuer said information will be available for the public review through the city's website as the process moves forward.

Categories: Economics, Government, Politics