From the Roundtable: City, university join businesses in cutting expenses during downturn

Sometimes I feel like a canary in a coal mine. That was the caged bird that used to be sent into the pits underground to make sure conditions were safe before miners dug out the seams of coal. Pressed into service as a sort of economic canary these days, folks ask me about recessions past while hoping for whatever wisdom I might be able to impart looking into the future.

Though I’m fascinated by history, I am not clairvoyant. Mining for information with a different goal in mind, this canary has been talking with lots of folks. It’s been particularly interesting talking about local business and economic conditions and what effect stagnant or declining revenues are expected to have on the key revenue streams for local governments.

No area is recession proof, but Columbia has had a history of recession resistance. The recently-announced hiring freeze at the University of Missouri may be the most publicly visible hunkering down. While one can count on all entities and employers to look for ways to reduce expenditures, it’s interesting to learn how  the city and county governments are going to meet this challenge.

With an annual budget in the hundreds of millions of dollars-which must be balanced-and several thousand employees, the municipal corporation known as the City of Columbia is as good a case for study as any.

Things have been pretty heady for Columbia over the years. Always seeming to grow-though at a rate that may vary from year to year-waves of municipal officials have proudly proclaimed our community to be a “full service city” because it provides a wide range of services. Some of those services, municipal transit for example, are heavily subsidized but no one would seriously consider abolishing them.

Revenue from sales taxes, though, has flattened. In some areas, such as construction, receipts from sales taxes have receded, and there are some prognosticators who say that the worst of this economic downturn has yet to come. My canary instinct tells me municipal officials have already been reacting over the past few months-quietly, steadily, prudently and sometimes even boldly-making budgetary adjustments and trying to do it as un-alarmingly as possible.

The pruning started months ago. The canary hears about unfilled vacancies, as well as equipment purchases that have been postponed. As the cost of motor fuels continues to drop, the canary learns of long-term contracts guaranteeing set prices over, say, six months from now.  But those are the easy decisions; the tough ones involve staff, employees, the people who go to work fair weather or foul providing myriad and often taken-for-granted municipal services. People cost money, though, and in most budgets, and in all sectors, it’s the personnel costs that are the toughest ones to grab a hold of.

It’s a question of what kind of pain we’re willing and ready to tolerate. It’s figuring out where expenses can be pared on a line-by-line, item-by-item basis.

For example, while most of us appreciate our city’s generally clean and tidy streets, the other day I saw an example of what one might call an expendable expense.

A city-owned street sweeper was southbound on Providence Road in what looked like a futile effort to clear leaves and other detritus from the edge of the highway. The machine, manufactured by the Tennant Company of Minneapolis, undoubtedly cost the city a lot of money. Then there are the ongoing costs that include fuel, maintenance and paying someone to operate it. Yet, as it sauntered down Providence Road that afternoon, all the Tennant sweeper seemed to accomplish was to stir up and move a gooey mass of material to another part of the road.

This canary can be sure there will be a lot of these miscellaneous expenditures, such as the sauntering but largely ineffective sweeper, lined up as targets at the city’s budgetary rifle range. The delicate part of this exercise will find the city and its somehow compliant residents trying to sort out the pieces in the overall range of the city’s financial structure, ranging from its obligations (debt service), necessities (utilities, police, fire, etc.) to services (public works) and 1,001 extra-curricular activities.