City Manager Pete Stasiak has enacted a hiring freeze following the report of decreasing revenues for the city of McAlester, which could amount to more than a $1 million shortfall by the end of the current fiscal year.
Stasiak made the remarks during his city manager’s report during the regular Tuesday night meeting of the McAlester City Council, held in the council chambers at City Hall. He delivered his remarks about an hour after Mayor Steve Harrison’s State of the City Address, in which Harrison said things were “improving” for the city of McAlester.
Stasiak said city revenues have been declining on an average of from 1 and a-half to 3 percent for about five months. Sales tax revenue for the month of December was down, compared to the same time last year, he said.
“We’re $133,000 short in sales tax for December,” Stasiak said.
“This poses a significant problem for us,” he continued.
The trend continued in the following month, he said.
“We are down another $108,000 for January,” Stasiak said, adding that’s a 9 percent drop.
Referring to declining city revenues, Stasiak said “It’s attributable to a number of reasons.”
“We’re going to have to react quickly,” the city manager said.
Going by the trend over the past few months, Stasiak said “We’re looking at $1.1 to $1.2 million shortfall in revenue by June of this year. The current 2012-2013 Fiscal Year is set to end on June 30.
“Effective immediately, I have a memo announcing a hiring freeze,” Stasiak said.
“Critical needs will be met on a case-by-case basis.”
Stasiak doesn’t believe at this point that the shortfall in revenues can be made up simply by cutting expenses.
“This has gone from something we could manage on the expense side to a much larger problem,” he said.
In addition to declining revenue from sales tax collections, Stasiak said city water sales are down and the city has not been receiving as much from gas well royalties on city property
Stasiak indicated the city staff is looking at a number of options which can be considered.
“People are working on solutions,” he said.
For more on this story, see the print or electronic editions of the McAlester News-Capital. Click here for print edition home delivery or click here to see the Smart Edition for your computer, tablet, e-reader or smartphone.