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To trim budgets, cities may furlough employees, eliminate positions

Decatur City Hall
Decatur City Hall

Cities across metro Atlanta are slowly beginning to get a clearer picture of how much the coronavirus is impacting their bottom lines.

In DeKalb County alone, cities large and small are set to make tough budget cuts for the coming year to adjust for the sudden loss in revenue. In several cases, that could result in government employees being furloughed or open positions being eliminated altogether.

Revenue from sales taxes, hotel stays and business licenses and taxes are down across the metro region, officials said. As soon as the coronavirus-related shutdown began in March, officials predicted that SPLOST revenue, which is funded by sales taxes and pays for road and sidewalk projects, would take a big hit. But it has become apparent that the drops in revenue will affect much more than that.

Chamblee, a city of about 30,000, predicts it will lose about $3 million — more than 10% of its general fund — due to the pandemic, according to new budget proposals. Dunwoody, which has over 50,000 people, estimates it could see up to a 30% reduction in its general fund revenues, possibly losing out on as much as $7.7 million, Assistant City Manager Jay Vinicki said.

Decatur has already announced it is temporarily laying off 20 part-time staff members who usually work year-round, the city said in a statement.

“We are expecting and have seen a drop in sales tax, hotel-motel tax, a drop in fines and forfeitures and other fees,” City Manager Jon Walker told the Chamblee City Council on Thursday. “Really up and down the revenue streams.”

Chamblee is considering cutting about $1.8 million from various city departments and using $1.7 million in funds that had not previously been allocated to make up for the lost revenue. The proposed budget eliminates city construction projects that have not already begun and public programs including summer camps and city events through July, according a memo to the city council.

Chamblee may also implement a hiring freeze and eliminate all “part-time employees due to lack of work,” the memo states, though it does not specify how many employees that could affect.

The amended budget could be approved at an upcoming City Council meeting.

Dunwoody has not proposed any staff cuts, but may reduce other spending by 5 to 10%, according to a recent presentation made to the council. That includes a $91,000 cut to the police department’s budget — mostly travel and training — and $200,000 from the city’s parks department, which has canceled several programs due to the pandemic.

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The impact to smaller cities like Doraville may be less immediate. Other than a reduction in SPLOST revenue from sales taxes, Doraville’s current revenue forecasts are not as drastically impacted as some others’ because the city relies less heavily on retail, Mayor Joseph Geierman said.

He said the city expects a $200,000 drop in business taxes. Officials have discussed eliminating several vacant full-time positions and closing the pool and summer camp program for this year.

However, he said the city’s large residential tax base could take a hit next year if property values decrease as a result of economic shutdown.

“The council is committed to doing whatever it can to retain jobs and not to impact city staff,” he said.

Decatur City Manager Andrea Arnold said furloughs for 20 employees are intended to be temporary.

“The financial impact of the COVID-19 crisis requires that we must make some difficult decisions to control expenses,” Arnold said in a statement. “Our employees are our most important resource, and any decision that negatively impacts our employees is not an easy one.”