Olathe plans 2-week furloughs for nearly all city employees to supplement budget deficit

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OLATHE, Kan. — The city of Olathe is planning widespread two-week furloughs for hundreds of employees over the next few months.

It’s the same move other metro governments across the metro face with tax revenues falling. 

About half of Olathe’s revenue comes from sales tax. With restaurants, shopping centers and hotels closed, Olathe is looking at an $18 million deficit for 2020. 

The multi-million dollar question is: How does the city meet that financial challenge during this pandemic?

“We looked at every opportunity to make one-time cuts, to delay transfers, to freeze positions and we have implemented all that,” Olathe communications director Tim Danneberg said. “But one step that we are going to have to take this year to meet that amount is doing furloughs.”

All city employees will be required to take a two-week furlough — with an exception for police and fire fighters on the front line. 

“The executives in police and fire departments, at the high level, will be taking two-week furloughs,” Danneberg said. “That’s a recognition that we’re all in this together.”

City leaders said they made this decision, in part, because employees could get unemployment help from the federal CARES Act. 

“With the CARES Act, there’s an extra $600 in unemployment, in addition to what the state provides,” Denneberg said. “So we saw that as an opportunity.”

That window ends July 31, 2020. Danneberg said they’ll do it by staggering the furloughs, starting this week. 

The furloughs are expected to save about $816,000. That, combined with transfers, hiring freezes and fund balance utilization saves Olathe $18.2 million. 

Neighboring city Overland Park anticipates a $25 million loss in revenue. To close that gap, Overland Park has furloughed 200 part-time community center employees.

“We have not furloughed anyone that’s a full-time employee at this time in the city,” Overland Park council member Chris Newlin said.

Overland Park leaders have also made cuts in city-wide operating expenses, stopped new design or construction contracts, made hiring freezes, and reduced 2020 public works and parks and recreation capital and maintenance programs.

The city also suspended its $1.8 million compensation increase program for 60 days that began at the end of March. 

“We’re going to get the 2021 budget here in the next month and a half,” Newlin said. “We’re going to have to make some tough decisions on what to prioritize over others.”

The Johnson County government plans more than $21 million in cuts to make up for lost revenue. Of that, $7.7 million comes through employee furloughs, leaving open positions empty and other personnel items. 

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