FAIRHOPE, Ala. – Recent cost-cutting measures initiated by the City Council hit municipal employees in the pocket this week – where their cell phones are located.

All but a handful of the 67 employees with city-issued cell phones were instructed last Thursday that they had to turn in their phones by June 16, when the service with Verizon Wireless would be cancelled, according to the city’s information technology director.

“The cost savings will be around $20,000 a year,” said Mayor Tim Kant, who also returned his city cell phone. “I've always had my personal phone, and I was issued a phone, which I never used much, and I said, well, I can turn mine in now.”

The new policy offers a contract to most of those employees who previously had city cell phones, by which they will receive a monthly stipend of $30 for reimbursement of city-related phone calls on their private cell phones.

City Administrator Gregg Mims said the approximately $20,000 that will be saved annually includes that $30 monthly stipend, and that last year’s cell phone bill for the city was $41,510.

“This is one of the cost-saving ideas that are IT-related that Jason Colee, IT director, suggested per the request of the Financial Advisory Committee and the City Council,” Mims said Thursday. “It is the beginning of many more to come. A target number (for cost-cutting measures) has not been set by FAC or the City Council.”

The new cell phone policy was one of two proposals suggested by the IT department, Kant said.

“The other (plan) would have been to turn off all phones, except for the managers and sworn police officers,” Kant said Thursday. “Apparently when they started on that plan, it caused a lot of resistance, so I said, let’s go with the other plan.”

Colee would not comment on whether city employees had objected to the new policy, other than to say, “it has been a long week.”

Additional savings from the policy change will be staff time spent in reviewing bills before their payment and related costs, Kant said.

The IT department, like other departments in the city, have submitted plans this year to the council and council-appointed committees, suggesting ways to cut costs and raise revenue across all city operations.

Those plans were requested because some council members have characterized the city’s financial situation as “in crisis,” and that a budget shortfall by the end of the fiscal year on Sept. 30 could be substantial.

This week, however, both Council President Lonnie Mixon and FAC chairman Chuck Zunk agreed that the city's financial situation might not be as critical by the end of the fiscal year as earlier thought. Neither would comment on what the earlier estimated shortfall was, what the target cost-cutting amount was, if any, or how much cost savings had been achieved to date.

“I think we will come in very close to budget,” Council President Lonnie Mixon said Thursday. “Some items can can deferred until the next fiscal year. FAC will take a hard look at the end of June to see if we need any major adjustments to the 2010 budget.”

About six employees will continue to use city cell phones, while the new policy takes effect, according to city staff.

“When the transition is complete, we will retain one phone for temporary use by Ken Eslava, (assistant public works director and oil spill coordinator), due to the oil spill,” Mims stated. “The cost of this phone will be paid for with BP funds. The police may utilize several phones by investigators that will be paid for by drug funds.”