Budget Direction Provided - The Clock Is Ticking
I'm experiencing one of those "chicken or egg" moments... I don't know which came first - this darn cold I've been fighting several days or plowing through the staff report for Tuesday's council meeting over the weekend. In any event, digging through all the details of that report and it's numerous attachments is enough to make anyone ill, so that's where I'll place the blame.
READING AND SNIFFLING
I did, indeed, spend a big part of my weekend trying to make sense of the proposals presented. I also spent some time chatting with a senior member of the city finance staff late in the week, clarifying some of the questions I had. You can plow through the agenda yourself if you wish, HERE.
Tuesday's meeting was not a surprise - except for the fact that that Eric Bever wasn't in attendance. It didn't make any difference, though. In the case of split votes, Katrina Foley was alone against the other three. With Bever there it would have been four.
FULL, ANGRY HOUSE
The council meeting played to nearly a packed house with, according to trusted sources in attendance, a large number of city employees. This, of course, is understandable - some of their jobs are on the line. As the evening progressed and speakers stood to voice their views it was clear that the firefighters are going to be a tough sell. Current and former leaders of the firefighter's association stood and spoke with passion and implied that the city was not acting honorably - that it had given it's word on which firefighters had based major life plans, a new home, marriage, etc. - and now was trying to back out of the deal.
FOLEY CHEERED BY CROWD
Foley clearly struck a chord with a majority of the attendees as several of her suggestions and comments brought raucous clapping.
MANSOOR GRANDSTANDING MOVE
Early in the proceedings our young jailer/mayor Allan Mansoor - who affirmed the rumor of his run for Van Tran's Assembly seat today - asked City Attorney Kim Barlow whether his suggestion of the reduction of council members salaries would be considered tonight. He was told that it's on the agenda next week, but wouldn't make any difference anyhow, since any change in council salary can only be considered at the time new council members are seated - in this case 2010. He knows that, but I guess he thinks he needs to make some kind of a meaningless statement. What a grandstanding hypocrite!
DECADES-OLD STAFF LEVELS
During his presentation City Manager Allan Roeder told the council and the rest present in the auditorium that, assuming their budget recommendations are put into place, the city will be at staffing levels he had not seen for more than 20 years. At the beginning of the FY 08/09 city staffing was at 611. The head count if the proposed 10-point plan is adopted will be 545. Those 66 positions lost were the accumulation of the 18 eliminated or held vacant in 11/08; 23 laid off via the 5% budget cuts and an estimated 25 eliminated due to early retirement incentive program.
10-POINT PLAN ENDORSED
The upshot of the meeting was that the council directed staff to move forward with the 10-point plan they presented to the council for it's consideration. That was fine and a good place to start. However, it got more complicated after that.
FOLEY WANTS NO JOB CUTS
Katrina Foley adamantly insisted that she wanted to come out of this process with a balanced budget that took no jobs. She said she felt it was possible to do that by digging through the details of the attachments for cost reduction opportunities and through greater use of the fund balance. Well, in prior years, she might have been right, but this is a whole new ballgame. The city staff has spent weeks attempting to find ways to come up with a balanced budget without the necessity of cutting jobs. I don't think Foley will find something they've missed. The fund balance will be utilized to fund the 08/09 budget to the tune of more than $15 million, despite very significant adjustments accomplished at the end of December. The current proposal by City Manager Allan Roeder and his staff includes the use of almost $3 million in fund balance, which will leave very little left in the kitty.
ROEDER ADAMANT - WE WILL HAVE A BUDGET BY 7/1/09
As other council members began to cherry-pick specific issues from the various attachments it looked as though the staff will be in for a lot more work than they anticipated, attempting to negotiate with unions where appropriate and blending the individual choices selected by council members into something resembling a viable budget. Time is of the essence, since City Manager Allan Roeder was quite clear - that they WOULD have a balanced budget by the due date of July 1, 2009.
So, here's what the council approved Tuesday night:
1. Reduce department operating budget by an additional 5.0% (resulting in an average reduction of 10% from the prior fiscal year which will require elimination of approximately 23 full-time positions) Est. $6,318,134.
2. Negotiated reduction in employee compensation equating to approximately 5.0% of salary. Est. $3,623,663.
3. Reduction of $1 million dollars in non-reimbursable overtime for Police and Fire Departments. Est. $1,000,000.
4. Negotiated suspension of minimum manning requirements in the Fire department in order to accomplish the aforementioned reduction in overtime.
5. Seek Federal Stimulus funding for ten police officer positions to be eliminated due to Police department budget reductions. Est. $1,052,010.
6. Offer PERS Retirement incentive to create vacancies to (a) reduce the number of personnel that may be laid off as a result of reductions in departmental operating budgets and (b) create additional vacancies needed for budgetary purposes (assumes total of 50 employees opting to retire of which 25 positions would be eliminated). Est. $3,485,000.
7. Suspension or termination of the Retiree Health Savings Plan (Contributions are comprised of 1% by Employer and 1% by Employee). Est. $508,764.
8. Implement various cost recovery programs including resident EMS fees, inspection fees, and Police and Fire Cost Reimbursement Fees. Est. $959,700.
9. Renegotiate/extend the Golf Course Operator's agreement for a greater share of revenues and institute formula adjustments to the greens fees. Est. $244,850.
10. Utilization of undesignated unreserved General Fund fund balance. Est. $2,900,000.
Total estimated budgetary reductions and new revenues amount to $20,092,121.
NOTHING GUARANTEED - NEGOTIATIONS TO FOLLOW
There's a whole lot of negotiating involved in some of these items. If any of these prove to be unworkable, then cost savings must come from somewhere else. For example, if the employee unions balk at re-opening talks then they effectively shove the city into a corner. They will be left with very few alternatives, and none that come close to meeting budget requirements, except to lay off significant numbers of staff members.
The clock is ticking of this budget mess. The city must have a balanced budget by July 1st. That means a lot of work by the staff to massage and mold the choices presented to them by the council.
NOT MANY WINNERS
One thing is sure - there will be more than a few unhappy city employees by the end of June.
Labels: Budget Woes