It has been difficult to communicate to residents that, even as we're going to the ballot for this tax increase, we still need to eliminate a substantial chunk of expenditures from our city budget. Plain and simple, this is due to the sheer size and scope of the reductions that have been handed to us by the State of Ohio budget and its reduction of the local government fund and elimination of the estate tax (for more on this entire issue, read this blog entry). The changes passed down by the State budget equate to approximately 25% of our city budget, when you factor in the average funds actually received from the estate tax in years past. The process of identifying possible cuts and working with the administration to help move forward with an actionable plan has been taking up a lot of my time and energy - which explains why this blog has become so focused on this one issue. It is easily the greatest financial challenge faced by any Bexley governmental entity in several decades, if not in the history of our community.
Some of the cuts outlined in the press release are vague. That's a fair criticism, and it's immediately apparent. However, the vagueness of the reductions is due to the fact that some of these line items are sensitive from a negotiation standpoint, as they will require the compliance of collective bargaining units. Other cuts are time-sensitive, and cannot be enacted until just the right time. All of the proposed cuts are planned to be phased in over the next year, with most enacted by the start of the new city budget on January 1, 2012. All of these items represent tangible, realistic numbers, and they have been carefully selected to balance the inevitable need for expense reductions with the need to retain as many city services as possible.
Here's the text from the city's press release:
September 27, 2011
FOR IMMEDIATE RELEASE
"City of Bexley Leadership Commits to
More Than $930,000 in Annual Expense Reductions in Order to Balance the City
Budget
The
City of Bexley is projected to lose approximately 25% of its general fund
revenue as a direct result of the passage of the 2011-2012 State of Ohio budget
and its 50% reduction in the Local Government Fund and elimination of the Ohio
Estate Tax.
The
city is seeking to increase the income tax rate to 2.5% via Issue 24, which
will be put before Bexley voters this November.
Issue 24 will help to offset the severe impact of the Ohio budget cuts
and policy changes. In public meetings
throughout the spring and summer of 2011, city leadership acknowledged that the
income tax increase alone would not fill the budget gap, and committed to the
voters that the budget would be balanced in part via carefully targeted expense
reductions that would minimally impact the quality and scope of vital city
services such as police and fire protection, street maintenance and repair, and
parks and recreation programs.
New
projections prepared by Bexley City Auditor Gary Qualmann following the
elimination of the Estate Tax indicate that, in addition to new revenue from
Issue 24, annual expense reductions of at least $930,000 will need to be
instituted starting in 2012 in order to balance the City budget over the next
5-year period from 2012 through 2016.
Past Efforts at Expense Reductions
Bexley
Mayor John Brennan and Bexley City Council have made strides in reducing
expenditures in key areas over the past several years. Several director positions have been
eliminated, director salaries have been reduced in many instances, and staff
reductions in the Service and Parks and Recreation departments have occurred. Additionally, a steep reduction in consulting
fees and the restructuring of the city’s health insurance plan allowed for
further cost savings. All of these
together add up to an estimated $800,000 per year in savings, with an
additional approximately $2,000,000 in grant monies received to help with the
city’s financial situation. However,
these savings have been offset by substantial increases in the fire contract
with the City of Columbus, by ongoing employment contracts, and by an increase
in debt service due to the construction of the city pool and police
station.
Additional Expense Reductions Moving
Forward
In
order to achieve our goal of a balanced budget over the next 5-year period, the
City of Bexley has identified at least $930,000 in additional expense
reductions. These targeted expense
reductions have begun, and the complete package of reductions will be phased in
via the 2012 budget.
The
City of Bexley has eliminated 3 full-time positions in the service department
that will not be replaced.
Additionally,
the city will be reducing the transfer from the general fund budget to the
recreation fund budget by $60,000 per year.
Parks and Recreation will offset this loss in the form of expense
reductions and a focus on more self-sufficient programming opportunities.
Further
cuts will be made to multiple departmental budgets. These will include a restructuring of the
city’s landscaping contract and the elimination of several programs and grants,
including the elimination of the Main Street and North Cassady façade grant
program.
The
city will also be reviewing increasing fees on building permits and other
miscellaneous fees in order to raise additional revenue.
The
remainder of the savings will be made in the form of further staffing cuts and employee
benefit and compensation reductions. We
have identified additional full-time
positions that will not be filled or will be restructured following employees
retiring in 2011 and 2012. While the
city cannot accurately predict the exact outcome of negotiations with employee
bargaining units, every effort will be made to preserve adequate, market-level
benefits for employees, and to continue to provide a level of compensation that
makes Bexley a desirable working environment for quality employees.
The
announced cuts are synopsized in the following table.
2011 Budget Cuts Proposal*
|
||
Item:
|
Total Savings
|
|
Landscape contract restructuring
|
$50,000
|
|
Decrease in Recreation expenses
|
$60,000
|
|
3 service worker positions
|
$200,000
|
|
Development program cuts
|
$20,000
|
|
Additional staff cuts and employee benefit reductions
|
$604,000
|
|
Total Savings:
|
$934,000
|
|
* Figures provided represent approximate savings
|
||
It
is important to note that this is a starting point for dialogue with City Council. While most of these items have been discussed
with council, further discussion is necessary, and this proposal will be
subject to the approval and cooperation of council in some cases, as well as
successful negotiation of collective bargaining agreements.
It
is our belief that we can institute these budget changes while maintaining a robust
level of quality city services for our residents. While none of the changes we are going
through are easy, extraordinary changes to State funding and State policy,
coupled with difficult economic times, demand that we do no less."
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