Black Diamond may add furloughs

Published 12:52 pm Wednesday, October 8, 2014

Black Diamond city officials hope to escape 2014 without making any layoffs after receiving a “limited wind-down” notice from developer YarrowBay.

YarrowBay Holdings sent the notice on Sept. 18 that they will stop paying for all city staff positions, except for the assistant city administrator and economic development director, related to fiscal shortfalls created by the master planned developments. This funding decrease will take effect six months from the notice, March 19, 2015. The wind-down process is outlined in the funding agreement for both The Villages and the Lawson Hills Development Agreements.

City administration and the finance department developed options for balancing the 2015 budget that reflected the reduction of YarrowBay funding. The mayor and staff presented a preliminary budget Oct. 2. The general fund budget hearing is scheduled for Oct. 16.

Finance Director Mae Miller created a general fund budget that cut roughly $400,000 from last year’s budget but did not include any layoffs. However, to do so, the city would need savings from multiple areas: increasing furlough days from two to 10, no step increase or cost of living adjustments, not filling vacant spots — such as city administrator and natural resource director – and no new positions added. Miller told The Reporter there are “pretty significant” cuts “here, there and everywhere.”

“It was difficult to go forward with the budget until we got that letter and we didn’t get it until late,” Miller said. “It was a challenge to get it all figured out.”

Mayor Dave Gordon could not be reached by phone, but acknowledged in an email to The Reporter that the limited wind-down notice puts the city in a financial bind. Gordon said his priority is to preserve fire and police services to protect public safety. He is optimistic about the plan to stretch the two-day city furlough to 10.

“That means the city would close 10 days during the year that it would normally be open,” he wrote. “I plan to cluster those days around holidays to reduce the impact. I studied how other cities handled financial shortfalls and furloughs are a common strategy that seems most effective.”

Gordon said he and staff studied multiple options, including layoffs, four day work weeks and department reorganization.

“I see 10 days of city furlough as the best balance to preserve public service levels and public safety,” he wrote.

YarrowBay paid for certain staff positions while the master planned developments were in the planning and approval stage. At the time, the city did not have adequate staff to process the documents with a development of that size.

Megan Nelson, director of legal affairs for YarrowBay, said it was a “business decision” to cease paying the additional staffing costs, which she said are “in no way related to the MPDs.” She said the MPD project is “moving forward” and that crews are in the middle of grading.

Nelson said litigation between the city and YarrowBay and the group Toward Responsible Development extended development timelines.

“The length of litigation went longer than any of us expected it would go,” Nelson said. “It’s just a business decision about dollars.”

Nelson said previous contentious issues with the council did not impact this decision.

“Twenty-four months, we thought, would put us well into the development stage of the project,” Nelson said. “Because of the litigations we aren’t there yet. We made the business decision to send out the notice.”

Council members have publicly discussed the city’s dire financial situation, with much of the blame falling on extra attorney’s fees related to a sexual harassment claim against the mayor by former city administrator Christy Todd.

Gordon said it’s important for citizens to see how much the developer financially supported the city and the need to begin “living within our means.”

“By living within our means, the city becomes more independent and objective as we perform the role of regulator of a massive land development project,” he wrote.