RAPID CITY–In response to reduced sales tax collection revenue in 2017, the City of Rapid City is implementing a temporary moratorium on hiring replacement employees, effective May 1.
The hiring moratorium is for 30-90 days depending on the size of the City department. Departments with 25 or fewer employees, such as the Mayor’s Office, City Attorney’s Office, Community Planning and Finance, the hiring delay is scheduled for 30 days. Departments with 26-100 employees such as Community Resources, Library, Parks and Recreation, and Public Works, the delay on hiring replacements is for 60 days. Departments with 101 or more general fund employees, such as Fire and Police, the moratorium is scheduled for 90 days.
The anticipated cost savings of the hiring moratorium for the remainder of the calendar year is $338,000.
In an April 19 letter to the City Council, Mayor Steve Allender shared sales tax collection numbers for 2016 and for the first two months of 2017. There was a shortfall of $178,366 in the City’s projected sales tax revenues for 2016 and the actual collections ($25,110,427 projected vs. $24,932,061 collected). The City has projected sales tax revenue for 2017 at $26,466,558 based on a two percent increase over 2015 actual collections and a two percent projected increase over 2016’s anticipated revenue. For the first two months of 2017, sales tax receipts total $3,536,179, which is 2.21 percent under last year’s receipts for the same time period.
“We are not in a financial emergency,” said Mayor Steve Allender. “We will be applying some logical and temporary budget adjustments in the event the reduction in sales persists. The hiring delay will not be the only measure taken, it is merely the first.”
Mayor Allender’s letter to the Council also addressed statewide and local decreases in Municipal Gross Receipts tax collections (also known as the Bed, Booze and Board, or BBB tax).
The hiring moratorium does not apply to police and fire operational programs, such as police officers and firefighters. In addition, the moratorium affects vacancies occurring after May 1. Current vacancies that are being advertised or are in the interview or hiring process, will continue.
