Mayor Swearengin Presents Two Budget Scenarios to Address Fiscal Year 2012 Budget Shortfall
05/17/2011

*City Would Achieve Structural Balance in Operating Budget under Recommended Plan

Mayor Ashley Swearengin today presented two budget scenarios to address a projected $18.5 million shortfall in the fiscal year 2012 budget, including a recommended plan in which the City would achieve structural balance in its operating budget for the first time in eight years.

Speaking at a City Hall news conference, Mayor Swearengin said the scenarios presented to council are:

Scenario 1 (Scenario recommended by Swearengin administration)

· Assumes a 3 percent across-the-board salary concession from all City employees and the creation of a commercial solid waste franchise.

· The concessions would generate $3 million in savings for the General Fund; the commercial solid waste franchise would provide about $1.9 million in revenue to the General Fund in fiscal year 2012 and $2.5 million annually in future years.

· In addition, the commercial solid waste proposal calls for private operators to hire all the displaced City commercial solid waste drivers and to guarantee their jobs for 12 months. The original franchise proposal called for the private operators to hire all but 14 of the drivers and guarantee their jobs for six months.

Scenario 2 (Options prepared for Council if the recommended plan is not accepted)

· If salary concessions and/or the commercial solid waste franchise are not approved, Council would need to close the remainder of the shortfall.

· Options in this scenario include closing one or two fire stations, reducing firefighter minimum staffing to 63 per shift, an additional two weeks of furloughs for all city employees not exempted by their contract, a three-month furlough for parks maintenance employees, closing all remaining community centers (other than Dickey Youth Center) that are not operated by community-based organizations, and reducing funding for the Senior Hot Meals program.

· Up to 27 full-time positions and 64 temporary/seasonal positions could be eliminated. In addition, 18 parks maintenance employees would be affected by the three-month furlough, and a total of 2,120 employees will be impacted by an additional two weeks of furlough.

· More information on options in this scenario is included below.

“I strongly believe that our plan with the concessions and commercial solid waste franchise is the most responsible and appropriate path forward for the City,” Mayor Swearengin said. “The cuts needed to balance the budget without these recommended changes will have a serious effect on public services and will result in further employee layoffs. Those cuts would not serve the public or our employees well. That’s why it is so critical for Council and our employees to cooperate so these cuts are not necessary.”

The City’s fiscal year 2012 begins July 1, 2011, and runs through June 30, 2012.

Mayor Swearengin said that in addition to focusing on the cuts, it is important to equally focus on the programs and services which are proposed in the Administration’s recommended General Fund budget, such as:

· Keeping all fire stations open with a minimum of 66 firefighters per shift;

· Keeping all parks, pools, and neighborhood centers open;

· Fully funding the graffiti abatement program;

· Improving staffing levels for emergency dispatch services and retaining grant-funded civilian employees in the Police Department;

· Establishing a Prisoner Arraignment Bed program targeting prolific auto theft and burglary criminals to mitigate the impact of the jail shortage; and

· Reducing debt from past operating deficits and stopping the further growth of negative fund balances.

In addition, the following programs and services are funded with non-General Fund sources:

· Adding an additional strike team to improve pothole repair services across the City;

· Retaining all FAX routes and existing service levels;

· Expanding median island maintenance and City beautification;

· Completing Shaw Avenue traffic signal synchronization; and

· Funding for $1.16 billion in capital improvement projects over the next five years.

If the Mayor’s proposals aren’t adopted, the administration said the resulting budget scenario would include the following options for council to consider to close the $5.3 million gap (the fiscal impact of each options is included in parentheses):

· Closing one or two fire stations and reducing minimum firefighter staffing from 66 to either 60 or 63 per shift ($500,000 for closing one station and reducing staffing to 63; an additional $100,000 for closing a second station and potentially reducing staffing to 60);

· An additional two weeks of furloughs for all employees as well as a three-month furlough of parks maintenance employees from November through January. The savings from an additional two weeks of furloughs for impacted General Fund employees ($600,000 for the two-week furlough; an additional $400,000 for the three-month furlough for parks maintenance);

· Closing all remaining community centers, other than Dickey Youth Center, that are not operated by a community-based organization ($574,000);

· Eliminating up to 10 Police Department grant-funded positions when grant funds expire ($498,000);

· Closing pools at Mary Ella Brown, Mosqueda, Frank H. Ball and Airways ($130,000).

· Reducing the Senior Hot Meals program, ($350,000);

· Shutting off field lights at parks unless a reservation is made ($240,000);

· Eliminating one graffiti abatement crew ($200,000);

· Eliminating the proposed Prisoner Arraignment Bed program ($150,000);

· Dropping police officer attrition an additional five positions before hiring back in fiscal year 2012 and an additional eight in fiscal year 2013 ($500,000);

· Cutting each council district budget by an additional $20,000 ($140,000);

· Cutting one of two additional positions in the City Attorney’s Office ($180,000);

· Eliminating the fiscal year 2012 “negative fund balance” reduction ($800,000).

Mayor Swearengin said this is the seventh consecutive spending plan beginning with mid-year cuts in fiscal year 2009 requiring sizable reductions in expenses to balance the budget. The City has had to address a nearly $100 million shortfall in that time.

If the recommended budget is adopted, the City’s General Fund will have achieved a structural balance in its operating budget for the first time in eight years by closing a projected deficit that has been as high as $87.9 million just two years ago, Mayor Swearengin said.

“We still have a long way to go and must continue to focus on keeping our expenses down, paying off negative fund balances, planning ahead for risk liabilities, establishing an emergency cash reserve and putting money aside to address capital and public works projects,” Mayor Swearengin said.

“However, if the recommended budget is adopted, we will at least be able to say that our figurative heads are above water, and if we continue to be fiscally prudent over the coming years, we should be back on stable financial ground by the end of this decade.”

Mayor Swearengin will formally present her budget proposal to City Council at its May 19 meeting. Council is expected to begin budget workshops on May 23.

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Click here to view the entire Mayor's Proposed Budget.
To view charts with budget options, forecasts and general fund history, click here.