MANCHESTER - The aldermen on Tuesday had pointed questions for both department heads and the mayor, as they take a hard look at his $138 million city budget for the 2014 fiscal year.
In a special hearing that lasted five hours, the department heads raised their own concerns about the budget, including the mayor's proposal to leave the severance account unfunded and the impact of federal sequestration.
The past year has seen a surge in retirements - triple last year's amount - as veteran employees have sought to take advantage of a buy-out incentive. The largest departments, police, fire and highway, saw the greatest number of retirements, while unlike other departments, they sought and were given increases in their budgets for the next fiscal year, which starts July 1.
Manchester Fire Chief James Burkush told the aldermen that paying out the retirement incentive of $13,000 per employee cost the department more than $400,000, which offset any savings from hiring new employees at a lower pay grade and with lower health insurance costs.
However, Finance Director Bill Sanders said it appeared that promotions were allowed to continue and that this was undermining the purpose of the buyout plan.
"This buyout thing only works when you eliminate positions, and when you eliminate the position, you want the old guy, not the young guy," he said. "I understand you need the management people, but that significantly dilutes the savings and the math."
Burkush projected that he would have at least 10 more employees retire next year, and he said there are 66 eligible for retirement.
Sanders suggested that aldermen might want to end the buy-out incentive, saying, "There's that old rule if you keep doing something, and it fails over and over again..."
The aldermen questioned the department heads on how they can boost revenues and increase savings for the remainder of the current fiscal year, with the goal of maximizing the surplus. Several aldermen have raised the possibility of sending that money to the school district.
Gatsas has proposed using any surplus for retirement costs.
Alderman Dan O'Neil urged department heads to hold off on filling any positions the remainder of the year.
"We're tracking to have the same number of employees retiring in '14 as this year, and that's going to be another $1.4 million," he said. "I would just encourage the departments to slow down the hiring and promotions."
Alderman Joe Kelly Levasseur proposed a hiring freeze, to which Gatsas replied that the city is already in one.
"Then the freeze has thawed," Levasseur said. "A freeze is a freeze."
The aldermen have given the mayor the authority to sign off on any new hires. Gatsas has blocked some and approved others.
None of the department heads lobbied the aldermen directly for a larger allocation, but they were frank in describing the challenges they faced.
Public Health Director Tim Soucy said after working out a budget with the mayor in February, he was dealt a blow in March, when Congress and the President were unable to avert sequestration cuts. Soucy said, should a 10 percent cut in federal funding go forward, it could result in a $73,000 hole in his budget, on top of the $18,000 cut that was part of the mayor's budget.
"I'm not asking for $73,000," he said. "I'm asking that you give me the ability to manage my budget."
Alderman Joyce Craig, who has been critical of the mayor's budget and supports increased funding for the school district, requested data from assessing board Chairman Robert Gagne comparing Manchester's tax rate for schools and city services with those of other cities and towns.
Gagne's data showed that Manchester's local school rate of $7.16 is the lowest among 10 other communities, including Nashua, Concord and Rochester, and its rate for city services, $11.40, is the highest.
Other department heads will appear before the aldermen next firstname.lastname@example.org