DANVERS — The town will ask its unions to accept a salary freeze to avert up to 25 layoffs as officials look for ways to close a $900,000 budget gap.
"As we sit now, we have increases in the salaries that we are contractually obligated" to pay, Town Manager Wayne Marquis said. "Something has to give."
The crunch is due to a plunge in state aid and the loss of other sources of cash, Marquis said. Cutting 20 to 25 jobs would close the funding gap.
"We will be having conversations with our employees to see how they could reduce that number," Marquis said yesterday during a briefing with schools Superintendent Lisa Dana and Doug Rendell, the director of the Peabody Institute Library.
Marquis would not term what the town might be looking for as "concessions." He said the town has already contacted union representatives, but no formal negotiations have begun.
If the town goes ahead with cuts, about 10 to 12 jobs would come from the schools, including teachers, administrators and others, and the rest would come from police, fire, the Department of Public Works, the library or other areas of town government.
Those cuts would be in addition to the 10 positions the School Department has already trimmed due to shifting enrollments, the combining of positions and the elimination of the assistant director of student services position.
"Our goal is to minimize any additional layoffs," Dana said.
The municipal government and the schools employ approximately 700 people who fall under 11 unions.
Michael Beskid, president of Local 1098 American Federation of State County and Municipal Employees, said he has not heard about layoffs, only that officials were looking for ways to save money in the budget. The Department of Public Works working foreman said it was too soon to say if members would be asked to accept a wage freeze.
"They need to explore a lot of different areas before they decide on a wage freeze," Beskid said. For instance, the town could cut its spending on Family Festival activities held each summer. "There's a lot of things they could cut before cutting the wages of employees."
The schools plan to meet with selectmen tonight at 7 in Holten Richmond Middle School's multipurpose room. Selectmen are scheduled to approve the budget during a hearing tomorrow night in the Senior Center's Great Room, 25 Stone St.
The current $900,000 budget gap is down from $2 million a few weeks ago.
The town budget has been dealt a double whammy from a $1.3 million drop in state aid and a dip in revenue during the recession. An estimated $186,000 in economic stimulus money never materialized, the town's pension fund has taken a hit — meaning the town has to pony up more to fund it — and investment income has dried up.
Managers' wage freeze
To save $100,000, 49 senior managers, including Marquis, Dana and Rendell, have agreed to a salary freeze. The move will save two employees from being laid off. Most managers were expected to receive a 3 percent salary increase.
"It makes a statement, and they certainly understand the position we are in," Marquis said about managers willing to forgo a raise.
Marquis said he would be asking selectmen tomorrow to approve a bottom-line number without spelling out all the specific job cuts.
As it stood yesterday, the town's overall spending plan was $87.8 million, Assistant Town Manager Diane Norris said, down from $89.6 million last month.
That new number includes $1 million in reductions the School Committee identified in its budget Monday night. Reductions of staff on the town side would reduce that number by another $450,000.
Marquis called the budget "level-funded."
"Our expense budget, utilities and supplies will be slightly below what we approved in '09," Marquis said.
On Monday, Dana and the School Committee hinted at 10 to 12 more layoffs in the schools, amid a host of money-saving moves, before the committee went into a secret meeting to discuss contract negotiations. The school district trimmed its requested increase to 1 percent from 4.48 percent, with a budget that now stands at just under $30.3 million.
Teachers are in line for a 3 percent pay hike under their latest contract, with the raise phased in over the year.
Attempts to reach Danvers Teachers Association President Thomas Sangermano by phone and by e-mail were unsuccessful. A message was left and an e-mail was sent to Patrolman Dana Michael Hagan, president of the Danvers Police Benevolent Association. A message was left for firefighter Brian Barry, the firefighters union head, at the Fire Department.
Staff writer Ethan Forman can be reached at 978-338-2673 or by e-mail at eforman@salemnews.com.
budget crunch
The town will ask its unions to accept wage freezes to avoid layoffs.
Proposed town budget: $87.8 million
Shortfall: $900,000
Number of union employees: 700
Raise obligation (in contracts): approx. 3 percent
Proposed layoffs: 20-25
Source: Town Manager Wayne Marquis
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