Park City freezes hiring, expects ‘more severe reductions’ as coronavirus financial toll mounts
City Hall has instituted a hiring freeze and suspended the recruiting efforts for full-time positions that are vacant, two of the moves made by officials in response to the impacts of the economic turmoil wrought by the spread of the novel coronavirus.
Staffers described the moves in a report drafted in anticipation of a Park City Council meeting that was held on Thursday. Mayor Andy Beerman and the City Council are in the early days of what are expected to be the most difficult budget talks since the depths of the recession a decade ago.
The staffers provided a narrative within the report of some of the measures undertaken by City Hall in response to the economic downturn. The narrative says City Hall, “proactively,” implemented what is described as a “broad hiring freeze.” It also says posts that are seasonal or part time “will not be filled until necessary.”
As an example, the narrative indicates between 50 and 75 positions that are seasonal for the summer are currently being held vacant. The narrative did not provide details about the departments, but the municipal government typically hires seasonal staff for the summer for recreation programs, among other needs.
The narrative also says the municipal workforce has dropped by upward of 100 employees as compared to the same time a year ago. It says the posts that are unfilled are mostly at the Park City Ice Arena, in the transit system, in recreation services and in administration.
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The Park City Police Department, meanwhile, typically has 130 officers on a part-time basis to work special events. The narrative says the officers normally hired for the special events will not be tapped since some of those gatherings in the summer have been canceled. The Park Silly Sunday Market and the Tour of Utah bicycling race are the two most notable summertime event cancellations. They would be hired if “the major event schedule is reinstated this summer,” the narrative says.
The narrative, using the acronym “PCMC” to stand for Park City Municipal Corporation, notes the timing of the impacts of the spread of the illness, which is seen as less damaging to Park City than it could have been since the economic losses during the ski season were limited to the final weeks and as the community was entering the spring shoulder season, normally the slowest stretch of the year.
“For the time being, PCMC has benefited greatly, particularly in terms of its labor savings, due to the time of year COVID impacts were first felt. In other words, PCMC was already approaching its ‘mud season’ lower staffing levels, whereby seasonal employees are no longer as necessary, as municipal services contract accordingly with the decrease in demand. This seasonality is generally the case across the organization as a whole. Had it not been for the seasonality, immediate reductions in force would have likely been necessary given the abrupt and drastic impacts of COVID,” the narrative says.
It also says City Hall departments are requested “to implement serious reductions yet, where possible, maintain existing service levels. This is only possible for 90 days, until which time more severe reductions will be necessary, including programmatic cuts and reductions in force.”
The possibility of a reduction in the municipal workforce is an especially sensitive one since layoffs have wider impacts on a range of issues such as personal spending and mental health. In April, shortly after the Park City ski season ended several weeks early in an effort to combat the spread of the coronavirus, Park City Manager Matt Dias indicated the municipal government was not considering layoffs or furloughs through at least June 30, which is the last day of the 2020 fiscal year.
There is a projected revenue shortfall in the current fiscal year that the elected officials must address alongside the discussions about the upcoming fiscal year of 2021, which starts on July 1. There is a projected revenue shortfall in the 2020 fiscal year of $3.9 million while the revenue shortfall in the 2021 fiscal year is forecast to be upward of $8.6 million. A drop in the projected collection of sales taxes amounts for most of the anticipated shortfall. Sales taxes are initially projected to drop by 36% from what had been expected in the 2021 fiscal year.
“With increased economic uncertainty, projections of FY 2021 municipal revenues remain incredibly difficult to predict. … Generally speaking, staff has assumed a slow return of sales tax revenues as the impacts of COVID-19 decrease over time,” City Hall says.
Park City leaders intend to initially implement a provisional budget for the next fiscal year followed by additional talks with the possibility of adjustments and a re-adoption of the budget later in the fiscal year. The unorthodox budgeting process will allow the elected officials to better understand the financial impacts of the illness. The budget is anticipated to be revisited within 60 to 90 days after July 1.
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