City cuts employees, explores other options to balance budget amid weak economy

In the face of declining tax revenues and weak economy plagued by low oil prices, Breckenridge city leaders made the tough decision to lay off several city workers on Wednesday in preparation for next year’s tight budget.

City Manager Andy McCuistion said they cut five full-time employees and one part-time employee. He said originally they had planned to cut six full-time employees, but had an employee resign on Wednesday morning.

 “We were going to lay off six full-time and one part-time employee, but since I had an employee that resigned this morning, I may be able to fill that position without having to lay somebody off,” he said. “It just depends if I can move people around to the positions where I need them. I’m trying to work all that out now.”

He said the cuts were spread out over different departments within the city’s workforce. There was one cut in the bookkeeping, one in the water office, one in public works, one at the cemetery and one at the waste water treatment plant. He said the part-time employee was cut from aging services center.

McCuistion said all the full-time employees who were laid off were offered a severance package and have seven days to review the package, sign it and return it. Then, at the next payroll period they will be paid their severance and anything that’s due. The city will then begin paying their COBRA health care for the next six months.

He said regardless of whether they accept the severance package or not, all the layoffs became effective immediately following his meeting with the employees on Wednesday.

“The city is not obligated to offer a severance package, but we offered these folks a severance package,” he said. “If they sign it and take it, they’ll get severance and we’ll pay some of their benefits for awhile. If they choose not to sign it or if they feel like they want take another direction, that’s OK, too. But, in any case, all those folks are gone from the City. ”

McCuistion said Wednesday’s cuts were made in anticipation of what’s going to happen next year, and right now he doesn’t see any additional layoffs coming next year.

In addition to the layoffs, McCuitsion said, there are other steps he wants to take to balance next year’s budget. He said he was going to recommend to city commissioners that they raise the property tax rate. He said the sales tax rate is already is maxed out; it can’t go any higher.

He said he will also discontinue the transfers they were making to the equipment replacement fund and will transfer more money from the water and sewer fund to the general fund to cover the deficits in that fund. He said those steps, along with the $243,000 they will save with the layoffs, the city will have a minimum balance in all those funds.

“We can make it that way for another year,” McCuistion said. “We can’t continue to do that, but that’ll get us through this next year, if all my revenues come in and barring some economic catastrophe out there. If oil and gas stay way down, I don’t know what’s going to happen.”

He said his projections are contingent on a lot of things, and if people continue to lose their jobs, sales tax continue to decline, and it continues to rain so people don’t need to water their yards driving down water revenue, things could change.  

McCuistion said they’re hoping that now that the lakes are full again the city will see an increase in sales tax revenue. He also said that maybe after the election the economy will stabilize a bit, and the city will begin to see some economic growth in the area.  

“Right now, based on my projections, I think we can make it next year just fine,” he said.

The Breckenridge American


114 East Elm Street

PO Box 871

Breckenridge, Texas 76424

Phone: (254) 559-5412
Fax: (254) 559-3491