Pay increases primarily behind projected $800,000 shortfall
JANESVILLE—City Manager Mark Freitag said Friday that an increase in salaries across the city workforce is the primary driver behind a projected $800,000 shortfall for 2017.
Freitag announced the expected shortfall at his State of the City address Thursday, saying it is large enough to end the days of Janesville providing “a full spectrum of municipal operations and services.”
He attributed about $500,000 of the shortfall to salary and wage increases and higher health insurance costs. Much of that is due to new contracts with the local police and fire unions. Both are set to receive a 1 percent salary increase in 2016 followed by an additional 2 percent increase during 2017.
For the last two years, Janesville has faced budget shortfalls about half the size of the projected $800,000 gap for 2017.
In addition, the city will receive about $200,000 in construction permits this year from Dollar General as it builds a 1 million-square-foot distribution facility on the city's south side. In 2017, that cash flow will end.
Miscellaneous additional costs to the city make up the final $100,000 in the projected gap between costs and spending power, Freitag said.
Last updated: 6:56 pm Friday, January 29, 2016