Over the course of the last six months this city
council conducted several special meetings: the first was to find ways to cut
$10 million dollars from the 2009 budget because that was the projected
deficit. The shortfall was fairly easy
to understand. The revenues were going
to be $10 million less than expenditures. So the council took the unprecedented step of
cutting positions in the police and fire departments, as well as other
operating departments including the library and parks and recreation. During those deliberations, most of you spoke
of the need to increase revenues so that this problem would not be repeated.
After passing the budget, you followed up with more
special meetings specifically to find new revenues. And, to the extent that added revenues are
deemed desirable, you were quite successful. You raised many fees associated with
utilities, parking, inspections, planning, and building and safety permits. You even created several new sources of
revenue: a never before imposed $360 inspection fee on buildings under 75 feet
and a 6.8% technology fee. You also
authorized city staff to increase fees annually up to 5% without your approval
based on the CPI.
But, as you all probably know by now, this added
revenue will not come close to what will be needed to balance next fiscal years
budget. According to an article in the
GNP on November 10th of this year, new car sales are off 23%, jewelry stores
are off 22% and building, light industry and specialty stores are off by double
digits. The bottom line is that revenues
for next year, in reflecting the overall poor condition of our economy, will
fall well below the projections that were made just a few months ago.
Making this even more worrisome, we can project a huge
growth on the expenditure side. With
greater pension contributions that have grown from $4 to $20 million in just
the last several years and contractually binding payroll increases that will
add several million more next year, I don’t see that you have any other choice
but to significantly reduce expenditures.
As a moral issue alone, we cannot burden the next
generation with any more long-term bond debt that has been the practice of this
body in recent years when faced with deficits.
The solution cannot come from raising more taxes,
permits and fees because you have already maximized these revenue sources. Looking ahead to next fiscal year, the gap
between expenditures and revenues is again going to be in the millions, and you
will gain little if any by cutting any more library services or adding
untenable fees to youth programs operating in our parks.
I urged the city council to take immediate steps to
open up the current budget and begin to make additional cuts in this fiscal
year. To start, you can stop all
out-of-city and state employee conferences, extend the life of some of the
vehicle fleet, and cut overtime to the bone. You can also apply some of the measures that
private businesses are forced to do when confronted with large cash-flow problems.
You can alert the city labor unions that
they will have to share in this burden and forego expected pay increases. It is troubling enough that several of these
unions already have multi-year contracts that assure them of pay increases. In one case, an 11% raise over the next 18
months will add more than $5 million alone.
I would also ask the city council to be completely
open and honest about the looming financial condition of the city and share
this information with the public in a format that is readily understood. It is better to let the public know now rather
than have them find out after the fact. Officials in our local public schools,
including the city college, have made the public aware of their financial
problems and the possible impact it will have on their staff and students.
Everyone knows by now, based upon the general economy
of this country and region, that the city is going to face a growing financial
problem. These problems are not beyond
our ability to solve, but they must be addressed now and include all of the
stakeholders. These are not normal times
and we cannot apply normal practices to correct them. The financial health of our city, short and
long-term, hinges on the decisions this body makes in the next few months.