Officials halt payments to contractors

By Charles Sercombe

For the past week, city officials have been scrambling to find ways to balance the city’s budget.

In an attempt to prevent payless paydays for city employees, councilmembers agreed to stop payments to vendors and contractors. For the next two weeks, the council said only city employees could be paid.

That raised a question of what will contractors do. Acting City Manager Kyle Tertzag, who advised against holding back payments, told councilmembers he doesn’t know if household garbage will continue to be picked up if the company does not receive payment.

The council also agreed to slash medical coverage to retirees by $800,000. That means the city will either come up with a new health coverage plan or require pensioners to kick in money for existing coverage.

The city has been spending $2.2 million per year on health costs for retirees and going forward will spend $1.4 million per year.

For the past two weeks, the council has been meeting in special sessions to work on the budget. By next June it’s projected the city will face a $3 million deficit.

But the city could face payless paydays well before that.

Some budget savings being considered included cutting city hall employees to part-time and closing city hall on Fridays.

Another proposal is to rebid the city’s garbage collection service. Tertzag made the recommendation because the contractor, Rizzo, refused to agree to a cut in pay, unlike other major city contractors.

City officials are also hoping to convince state officials to float them an emergency $3 million loan. The loan would buy the city some time to get its budget balanced.

So far, state officials have refused the loan, saying it will not fund the “status quo.”