Watertown plans layoffs as city loses revenue due to coronavirus shutdown

WATERTOWN, N.Y. (WWNY) - As the COVID-19 crisis causes the loss of millions of dollars in sales tax revenue, Watertown is bracing for layoffs of city workers.

Mayor Jeff Smith said an estimated 18 positions, some of them vacant, could be cut on or before July 1, which is when the city's fiscal year begins.

The exact number of affected positions is expected to known next week when the proposed budget is released.

Smith said City Manager Ken Mix has begun notifying employees who would be laid off.

The mayor said roughly 45 percent of the city's budget comes from sales tax, which has dropped dramatically during the shutdown of most businesses.

He also said the state will withhold additional sales tax revenue it usually gives to the city. There's also going to be an increase in retirement contributions, Smith said.

He said he expects the pandemic will cause the city to lose several million dollars in revenue.

Faced with the loss, the mayor said he has been meeting daily with Mix and City Comptroller James Mills to seek ways to prevent layoffs and a spike in property taxes.

He said he has proposed a roughly 15 percent pay cut for city council, management and unions. Smith said it's unclear if the unions would accept the proposal.

In addition, the city has reached out to the Federal Emergency Management Agency, or FEMA, as to whether it will allow the city to keep a grant that enabled the fire department to hire 4 firefighters last year.

According to Smith, one of the conditions of the grant is that staff can't be reduced.

However, he said all departments should share the financial burden equally and the city asked FEMA if it will have to return the money.

The mayor said the city is awaiting an answer.

A public hearing for the proposed budget is scheduled for May 4 at 7:30 p.m. Smith said it will be held virtually and people will be able to call in to make their voices heard.