Senior city staff have proposed a hiring freeze for casual staff along with other cost-cutting measures to reduce a projected $805,000 deficit for the year, city council heard at its meeting Tuesday night.

Administration director Rob Fendrick told council the shortfall in this year's annual budget is largely due to the city's obligation to ensure employees are receiving appropriate wages and benefits.

It wasn't until late December 2010 that the city received clarity from the Yukon Human Rights Commission regarding its responsibilities under the fair wage legislation, Fendrick explained.

By then, he said, there was no time to insert adjustments into the 2011 budget. The city was forced to recalculate its obligations and deal with them on the fly.

Fendrick put forward a long list of adjustments required to balance the budget by Dec. 31. They range from cutting $55,200 for new playground equipment to saving $206,042 in wages from the hiring freeze on casual staff for the remainder of the year; not filling vacancies deemed non-essential; and locking down all overtime, which now must be approved by the city manager.

"Really, there is no option, given we need to account for these variances, and we need to bring in variances that will result in the balanced budget by year end,” Fendrick said.

He noted, however, that as a public service organization, when employee positions are not filled, there will be a reduction in the level of service to the public.

The budget shortfall was identified in the city's standard review after the first six months of spending are over at the end of June.

City council is scheduled to vote next Monday on the proposed cuts and savings.

Fendrick pointed out to council, for instance, that there are normally four city clerks assigned to the front desk of city hall to provide services.

There are three now, which may be OK for this time of year, but there's no way they could manage with three at property tax time in the spring, he said.

Fendrick emphasized there will be no wage cuts nor layoffs, and none of the cuts will compromise the city's commitment to safety in playgrounds or elsewhere.

While he faced a couple of pointed questions from council, there was no outright display of grief, but for the obvious frustration – perhaps anger – telegraphed in a brief comment by Coun. Ranj Pillai. (See story below.)

Council heard the savings are not budget cuts that will never be revisited but rather are projects postponed for consideration in next year's budget.

Fendrick noted the $222,987 in landscaping for the Takhini North subdivision is being put off but will be back as a priority item for council to ponder in the 2012 budget.

Fendrick and other senior staff held a briefing Tuesday afternoon to explain the situation and present the austerity package to reporters.

The city, it was pointed out, has found itself on the road to deficits in previous years following its second-quarter review, but has always managed to square the books by the end of the year.

Fendrick explained the city adopted its new job evaluation system back in 2006.

In 2010, when contract negotiations with its two unions broke off, the city sought clarification from the human rights commission regarding about its fulfilling the principle of equal pay for work of equal value, he explained.

Fendrick said the commission provided the clarification on Christmas Eve, and contract negotiations were wrapped up last January.

When the city applied its obligations under the new contracts along with the clarification from the commission on the job evaluation system, the cost of adjusting wages and providing back-pay outstripped the $1.1 million the city had budgeted for the adjustments, he said.

Fendrick explained the freeze on hiring casual staff and not filling positions left vacant by staff leaving the city or vacationing is only proposed until the end of the year.

In addition to the $206,042 saved through wages, another $65,933 will be save in benefits.

City departments have also been asked to squeeze out another $129,000 in savings by shaving spending in such areas as supplies and equipment that are not essential. All told, cuts in the city's operation will account for just over $400,000.

Fendrick said the entire austerity package will amount to approximately $1.1 million saved, or enough to handle the $805,000 shortfall with $300,000 to be put in the bank to cover anything unexpected arising from repairs to the Canada Games Centre following June's deliberately-set fire.

Most of the $5.2 million in fire damage is being covered by insurance, but in the process of making the repairs, the city may find it makes sense to do other uninsured work at the same time repairs are being made, he told council.

Other projects to be put off are:

• Upgrades to downtown streets – $50,000;

• Park improvements – 48,059;

• Completing Hillcrest reconstruction plans – $6,299;

• Office furniture – 25,000;

• Upgrade heating plants (equipment) – $35,000;

• Finishing off rope rescue course for firefighters – $2,500;

• Purchasing decontamination tents for fire department – $6,000;

• Purchase of small equipment for public works – $47,000;

• Upgrading fire hydrants – $70,616;

• Upgrades to the Mount McIntyre Recreation Centre – $20,723.

Fendrick explained the items being put off are not optional for the most part, and will have to be brought forward at some point if not next year.

The measures to save money through staffing, on the other hand, will be done by the end of the year, he explained.

By Chuck Tobin

Star Reporter