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GREENSBORO — While you were sleeping Tuesday night, City Manager Mitchell Johnson delivered some dismal news.

Greensboro will likely come up $4.5 million short this fiscal year.

The city will delay filling some jobs, freeze salaries starting Jan. 1, slash contracts, eliminate a park reserve fund and make other cuts to make up for the anticipated losses, Johnson told council members late Tuesday night at their meeting. Those savings will create a $4.78 million contingency to help pay for losses caused by the downturn in the economy.

“It’s important that we have a contingency,” Johnson said. “It is also important we continue to save.”

The city has been working to keep finances in check all year. The City Council adopted a budget with no tax increase, and the manager has held open jobs to save money.

At the request of council members, Johnson gave them a full financial forecast.

The economic downturn in recent months has made the situation dire. Greensboro anticipates receiving:

• $500,000 less in property taxes than projected.
• $2.3 million less in sales tax revenue.
• $800,000 less for permits, ABC profits and licenses.

Johnson is also anticipating about $900,000 less in state-collected revenues.

Greensboro expects to receive $10.4 million from the state in the second half of the fiscal year. Municipal governments have not heard whether the state will slash their aid, but unexpected state cuts in 2001 left the city with an $8 million shortfall.

This time around, the city budget doesn’t have fat that can easily be trimmed, Johnson said.

“I’d like to see us look at a worst-case contingency plan if that were to happen,” Councilman Robbie Perkins said. “There probably is a reasonable likelihood of that.”

Johnson this fall asked city department heads to identify $1.1 million that could be cut.

To help get there, the city has delayed putting new roofs on two fire stations, the transportation department won’t install two new traffic signals, and the city will replace fewer street signs and road markings.

Starting Jan. 1, the city will also have a salary freeze, which is expected to save $68,000. That’s on top of the hiring freeze that has created about 120 vacant jobs, not counting police and fire positions. Empty positions will be filled only with consent of the manager’s office.

The vacancies are expected to save the city $3 million.

Councilwoman Goldie Wells said the hiring freeze has put pressure on some departments.

“Our folks do rise to the occasion every day,” said Adam Fischer, acting transportation director. “We are going to meet the crisis, but long term we can’t maintain this.”

Johnson has approved some hires, such as two for the library department, including a museum curator.

Councilman Mike Barber urged Johnson to manage with the staff he has. “A full freeze should be we don’t hire anybody,” Barber said. “A full freeze is not saying that a library hire is critical.”

Council members said they wanted Johnson to keep a close watch on the budget, with an eye toward worst-case scenarios that could develop. He suggested they start talking to community members about economic issues.

“Now may be a good time to start a community-based dialogue on the impact of the present economy,” Johnson said. “Clearly we are going to have a tough budget next year.”

Contact Amanda Lehmert at 373-7075 or amanda.lehmert@news-record.com