City of Austin freezes hiring and wages

Jan 16, 2009

Austin Business Journal

Citing the effect of current economic woes, the city of Austin is enacting a hiring freeze effective immediately.

City Manager Marc Ott sent a memo to all city employees on Friday detailing a plan to put a hold on all new hires.

Ott also said he is postponing the second phase of an annual review of the city’s wages that was scheduled to occur this month, effectively freezing employees’ wages.

“These are extremely difficult challenges and I don’t make these decisions lightly,” Ott wrote in the memo.

The memo states that no new hires will be made unless department directors have a critical need and get approval directly from the city manager’s office.

Explaining the decisions, Ott wrote that the national economic downturn and the slowdown of the local economy are putting more pressure on the city’s financial situation. Sales tax revenue, which accounts for about 25 percent of the city’s general fund, dropped 4 percent during the first two months of the fiscal year.

“We also expect lower revenue collections in several other areas, such as development permitting and interest earnings,” Ott wrote.

Ott said the measures enacted Friday are intended to avoid layoffs and pay cuts, which are already happening in cities across the country.