OSWEGO — With coronavirus-related costs piling up and an anticipated, imminent revenue shortfall, Oswego County officials are considering temporarily halting purchasing and hiring as part of an effort to shed costs and avoid further cuts or tax hikes down the road.
The Oswego County Legislature is slated to vote Thursday on four separate measures aimed at cutting costs and increasing revenues, including a hiring freeze through the end of 2020 and a pause on purchasing until July 9. County officials said the moves are a direct result of the COVID-19 pandemic, which has created additional costs at a time when sales tax and other revenues are expected to come in below expectations.
Oswego County Legislature Chairman James Weatherup, R-Central Square, said the purchasing and hiring pause, as well as other cost cutting measures expected to be approved Thursday, are aimed at eliminating the need to make further, more drastic cuts in the future.
“Maybe if we can make some small, surgical cuts now it's not going to end up being the big ax cutting moves later,” Weatherup said, adding, however, that nobody knows what the future will bring. “There are probably going to be some sad things that we have to decide here in the next couple of weeks.”
Weatherup said county officials would move slowly and deliberately, and likely wait for more data to come in before making any more spending cuts. For now, he said the county would be adhering to “in effect an austerity budget” to avoid a future financial crisis. According to county documents, officials anticipate at minimum $11 million in lost revenues combined with additional expenses as a result of the current economic downturn and costs incurred to combat the COVID-19 pandemic locally.
According to county officials, the county's hiring freeze would last from May 15 through the end of 2020, and essentially suspend all hiring with exceptions made for state or federally mandated positions, pandemic response activities, certain public safety positions, department heads and deputy department heads.
County procurement policies are suspended for coronavirus-related purchases, but through July 9, if the resolution is approved Thursday, all other purchases that are “not necessary to protect the health, safety and security of employees and citizens” or to ensure the continuation of high priority operations, would be halted.
“We are just reiterating again to the public and to our employees that this is serious, and not to do anything that's not to the core of your mission,” Weatherup said of the spending and hiring freezes, noting essential items and services would be funded, but certain purchases would be delayed or eliminated.
Legislature Minority Leader Tom Drumm, D-Oswego, called the cost-cutting moves a “precautionary first step.” Drumm said officials needed to put a pause on spending until the full financial impact of the global pandemic becomes clear.
“We have to be proactive,” Drumm said in an interview with The Palladium-Times. “Everybody has seen what this crisis has done to the economy. Nationwide, we've seen unemployment numbers that are rivaling the Great Depression.”
Legislature Majority Leader Terry Wilbur, R-Hannibal, said the hiring and spending freezes are important measures to address an expected revenue shortfall. Unemployment in the county is “the tell all,” Wilbur said, noting a drastic increase both locally and nationally is “devastating to the economy.”
“We know spending is down, we know sales tax will be down and we have to do everything we can to start mitigating those circumstances as they come to us,” Wilbur told The Palladium-Times. “So this is a step in the right direction to pull back the spending and control as much as we can.”
Oswego and counties throughout the state are heavily reliant on sales tax revenue and state and federal reimbursement for certain expenses. With Congress unable to agree on a deal that could inject billions into state and local governments, along with the state facing its own budget deficit, officials said immediate action was necessary. Federal funding for states and localities, which is currently under consideration in congress, would be “huge,” Drumm said, but the county can't sit back and wait for that to happen.
“It's good that we're taking this pause right now,” Drumm said. “We realize the situation that we're in so we have to take some of these measures to put ourselves in the best position to make good, sound decisions here and moving forward... it's a tough pill to swallow for everybody, but we're in this situation and we have to do it.”
A separate cost-saving measure under consideration Thursday is the elimination of 19 part-time court attendant positions. County officials said the cost of those positions was previously fully covered by state funds, but notification was given those reimbursements would not continue.
Wilbur said without reimbursement the county had no choice but to cut the positions from the budget.
“We have some tough decisions we have to make and that was one of them,” Weatherup said of the elimination of the 19 positions, noting the courts are not currently in session.
In addition to the cost cutting, county officials are also expected to vote on a measure that would bring roughly 10 percent of payment in lieu of taxes (PILOT) agreements into the county coffers. Under an agreement with the County of Oswego Industrial Development Agency (COIDA), the county's economic development arm founded in 1973, 10 percent of PILOT payments up to $2.5 million were redirected to the agency to use for job creation and retention activities.
In place since at least 2015, the so-called alternative allocation would immediately be abolished, with any 2020 payments so far collected by COIDA passed on to the county. Wilbur said recouping the PILOT payments is another attempt to eliminate the projected budget gap.
“We're trying to pull out all the stops here to slowly ease the burden that will be coming from this pandemic,” Wilbur said. “Everything is on the table. We're all going to have to share in the burden on this and we have to do our due diligence to make sure we're not coming back to the taxpayers. We're going to do everything we can.”
Officials said in previous years they considered axing the alternative allocation policy, but until this week those considerations never materialized into action. Legislators on both sides of the aisle this week said the county was forced to increase revenues where possible to avoid further cuts, and the 10 percent of PILOT payments is thought to be more than $200,000 annually.
“It's been under discussion for a while, and these are desperate times,” Weatherup told The Palladium-Times. “We're going to be looking at everything. The IDA does some wonderful things, but we just don't have that luxury.”
Drumm said the move to abolish the alternative allocation makes sense for “a multitude of reasons,” noting he's advocated in the past the funds should be returned to the county rather than going to COIDA.
“I'm excited to see it move forward,” Drumm said this week. “It just makes sense for the county to do this now. We need to retain all the revenue that we can and I'm excited to see it go back to the county and the taxpayers.”
The PILOT funds would largely be allocated to the county's share of lakeshore protection and improvement projects included in the state's Lake Ontario Resiliency and Economic Development Initiative (REDI).