Projections for income losses for the city were presented at the meeting.

Ari Dubow / Sun City Editor

Projections for income losses for the city were presented at the meeting.

April 29, 2020

Common Council Approves Emergency Furloughs, Hiring Freezes and Adjustments to Health Insurance for City Employees

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The Ithaca Common Council held a special meeting via Zoom April 29 to vote on drastic spending cuts which aim to save $5.4 million over the remainder of the year. The measures include placing 87 employees on temporary furlough, putting a hiring freeze on vacant city positions and changing the health insurance plan of remaining city workers.

Furloughed employees will maintain health coverage but on a modified — and cheaper— health insurance plan. The resolution passed 7-3. Mayor Svante Myrick ’09 also encouraged members of city management still in their posts to transfer their insurance to this new plan.

Several Common Council members are donating a portion or all of their salary to the city, including Mayor Svante Myrick ’09, who said he was donating 10 percent. Myrick did not say which Common Council members were making these donations.

The meeting began with a presentation from Ithaca Chief of Staff Dan Cogan on the city’s projected finances for the year. City officials expect at least a $4 million budget deficit, but see a $13 million deficit as a plausible worst case scenario. The city’s total annual budget is $70 million.

Myrick emphasized the fluidity of these predictions as a result of the uncertainty over the duration of the pandemic, and the possibility of future federal aid.

This is the worst financial crisis the city has ever experienced, according to Cogan. Ithaca had experienced its worst year in 2012 in the wake of the 2008 financial crisis, when the budget took a $3 million hit, Cogan said.

$13 million is more than the entire budget of either the Ithaca Police Department or the Ithaca Fire Department, which are around $13 and $11 million, respectively, according to figures shown by Cogan.

One hundred-twenty of the city’s 455 employees would have to be laid off — the city’s largest expenditure is employee salaries, which makes up 73 percent of the city’s 2020 general fund — and property taxes would have to be raised by 53 percent to make up that difference.

“That is the gut punch information,” said Myrick. “It’s the largest reduction of city services in the city’s history.” Myrick added that city officials were disappointed by the lack of federal funding to localities included in the previously passed aid packages.

“What it makes you want to do is pluck a United States senator by their collar and put them in each of your seats and say ‘here, you figure it out,’” Myrick said. “Everything we do here is essential.”

The council fielded a resolution authorizing the mayor and the city controller to make cuts to remedy the city’s dramatic budget gap, giving them the ability to furlough up to 90 city employees. The resolution also requires the mayor to conduct a weekly review on the roster of furloughed employees, in order to evaluate whether the city’s finances are strong enough for rehiring.

The resolution passed unanimously, but many Common Council members expressed reluctance.

“I have to tell you, I’ve never put anything like that before this council before and I hope to never have to again,” Myrick said after the vote.

The council then discussed a resolution to move furloughed employees to a lower-cost health plan. The resolution ultimately passed 7-3. Cynthia Brock (D-1st ward) Seph Murtaugh (D-2nd ward) and George McGonigal (D-1st ward) voted against, citing concerns about adequate coverage, particularly for those with severe health conditions.

The move garnered some controversy because of the increased cost of hospital visits and out-of-network treatment under the cheaper plan. The plan covers COVID-19 related treatment.

Under the cheaper plan, hospital visits cost $250, but routine care, such as cancer screenings, child well-visits, gynecological exams and colonoscopies are covered similarly between the two healthcare plans, according to Donna Fleming (D-3rd ward). Fleming said that the cheaper plan compares favorably with the health plan that most Cornell employees use — the Cornell Program for Healthy Living.

This change in health insurance coverage will save the city $128,000, according to Cogan.

Employees can still opt to remain on the other, more expensive plan, but would be required to cover the $5000 cost difference on their own.

“I know there’s anger and frustration and disappointment. We know none of you deserve this,” said Deb Mohlenhoff (D-5th ward). “We value the years of service that you all have and we hope that this can be as short a time as possible.”