City Implements Hiring Freeze to Combat Budget Deficit
A graphic presented during the meeting showing spending over the last five years (Aidan Cahill)
The Saratoga Springs City Council has voted to implement a hiring freeze to combat a budget deficient and rising labor cost.
The measure was approved unanimously by City Council and followed presentations by Finance Commissioner JoAnn Kiernan about the state of city finances at the pre-agenda meeting on Monday June 1 and the City Council meeting on Tuesday June 2.
According to Keirnan, the city is projected to go over it’s allocated budget by around $5 million. This deficit would be made up for by drawing from the cities fund balance reserve, something she said is unsustainable.
“The city is experiencing a significant and accelerating financial imbalance driven by rising operating costs, increasing personnel expenses, structural budget deficits and lack of long-term planning,” Kiernan said during the meeting. “While fund balances historically provided financial stability and flexibility, projected operating deficits are placing increasing pressure on available reserves and reducing the city’s long-term financial resilience.
The hiring freeze would apply to all positions currently unfilled in the city and any new vacancies that may occur. It has a set expiration date of Dec. 31, 2026. If a position needs to be filled due to state requirements or to ensure emergency services are being provided, then an exception could be voted on by City Council.
Kiernan cited several factors driving increased costs in the city. Since 2022, the city work force has grown by 46 employees, health insurance premiums have gone up by 39%, retirement costs have gone up by 86% and liability insurance has gone up by 186%.
One of the major factors in increasing costs has been the addition of third fire station in 2024. While federal grants covered the cost of building and maintaining the fire station, those funds didn’t cover the cost of staffing the third station over a long period of time, according to Kiernan.
Kienan said that there was no plan in place to fund the fire station beyond the duration of the grant money.
In addition to the hiring freeze, Kiernan announced that she would put together a budget task force comprised of members from across the city’s departments to meet regularly to discuss ways of improving the city’s financial health. She also said that the city’s financial challenges are “significant but manageable if addressed promptly”