City View: Budget proposal sustains core services despite revenue declines

On July 30, I delivered my Fiscal 2010 budget proposal, as required by the Charter. The budget provides a complete financial plan for the City of Columbia from October 1, 2009, to September 30, 2010.

The City’s fiscal position is sound but not comfortable. Since 2008, we have been adjusting to weakening sales tax revenues and rising costs. Early in FY 2009, we revised our three-year budget forecast and, through savings and cutbacks, we whittled a projected gap between revenue and spending down from $4 million to $2 million. I propose in FY 2010 to take that gap to almost “zero” through reduced personnel and program expenditures.

FY 2010 Revenues and Spending

We expect City revenues to be 2.9 percent lower in FY 2010 than in FY 2009. We expect no growth in sales tax revenue and 1.6 percent growth in gross receipts taxes.

Our biggest reductions, 14.6 percent, will occur in the General Fund, which supports functions most traditionally associated with local government. We will reduce operating costs by 3.6 percent and expenditures on major equipment and vehicles by 13 percent.

Changes in sales tax revenue have the greatest effect on General Fund services, but we cannot use enterprise funds, such as parking utilities or other funds to subsidize the General Fund.

Simply put, reductions in capital projects like the parking garage, voter-approved parks tax projects or grant-funded projects like “GetAbout Columbia,” cannot fund police, fire protection and streets.

Sustaining Core Services

We continually seek ways to save or use resources more effectively and to scale back some services. As a result, it will take longer to fix minor street problems, and we won’t sweep streets, plant trees or mow grassy areas as frequently. The Health Department won’t perform as many physical exams. The Parks Department will reduce financial sponsorship of some local events and serve fewer young persons through the CARE program.

These and other actions will allow us to reallocate resources to some higher-priority challenges. Here are a few examples.

A geographic policing system will put more officers on the street. The Police Department will “re-purpose” existing positions for new assignments. Two new officers, hired primarily for traffic enforcement, will be funded by traffic fine revenues that are not associated with red light cameras.

To staff new Fire Station No. 9, the Fire Department will temporarily move some employees from existing assignments and reduce spending for materials, supplies, travel and training.

Some employees from Health, Public Works and Public Communications will join Volunteer Services staff in a new Neighborhood Services office that will address nuisance and code enforcement complaints. They will be assisted by an assigned police officer and a half-time City attorney.

A half-time City attorney will be assigned to the new Citizens Review Board.

While it’s not necessary to raise city taxes in FY 2010, I propose more than $798,000 in fee and user charge increases to recover costs in the following areas:

• Health Department fee increases should generate about $45,000. Food inspection fees will apply to schools and licensed child-care centers, and nonprofit agencies will no longer be exempt from inspection fees for temporary events.
• Planning Department increases should generate close to $10,000 to support zoning, platting and other applications.
• Increases to support Parks and Recreation services are expected to raise more than $171,000. This includes fees for sport activities, athletic fields, the Activities and Recreation Center; facility rentals; adaptive recreation and “50+” programs.
• We expect to raise more than $572,000 from fees associated with sewer connections, the third and final voter-approved development charge increase and a new fee for water back-flow prevention. All of these fees are allocated for capital projects.
• City utility customers can expect residential rate increases for water, sewer and electric services. The projected monthly increase for a residential customer is $8.70, which is about what we’ve averaged over the last three fiscal years.

Sustaining the City Workforce

One of my highest priorities is to attract, equip and retain a city workforce that is at the top of its class. But current fiscal conditions demand tough decisions. I’ve recommended the smallest growth in personnel services expenditures and net growth in new employees since at least FY 1999.

For FY 2010, I propose a net increase of 2.5 new employees. Some vacant positions will not be filled, and some positions will be reassigned. I regret that there are no across-the-board or performance raises budgeted in FY 2010.

My workforce goals are to minimize layoffs, preserve base pay, keep insurance affordable, adjust policies and benefits that aren’t critical to employee well-being. We expect to save $973,000 in the General Fund through the following actions:

• Reduce sick leave buy back from 75 percent to 50 percent of the employee’s hourly pay rate;
• Eliminate the city’s contribution to the Post-Employment Health Plan (PEHP); and
• Eliminate our small, annual employee safety awards.

A Sustainable City Organization and Community

I believe that “sustainability” applies to far-reaching stewardship of all resources. The FY 2010 budget includes a new sustainability manager to implement business-style plans that achieve energy reductions and other cost savings. The program will be partially funded over three years with Energy Stimulus Block Grant Funds from the U.S. Department of Energy.

I will continue to abide by our long-standing budget principles of estimating costs and revenues conservatively: adding no projects in the budget without assured funding, adhering to the City Council’s directive to preserve at least a 16 percent fund balance and ensuring that our workforce does not grow faster than the community.

This year, we’ve added a new principle: the budget should reflect actions that implement the community vision. I am pleased to say that the FY 2010 budget includes activities that support five out of seven primary vision objectives.

I believe sound financial planning helps us avoid extreme budget adjustments, and people have noticed our financial stewardship. In late July, Standard & Poor’s, one of the national rating agencies, announced an improvement in our bond rating, saving us thousands of dollars in interest expense.

I want to thank you for the opportunity to serve as your city manager, and I want to thank the hard-working cadre of 1,200 public service professionals who contributed ideas and time in preparing the budget. Without their willingness to help, many more layoffs and program reductions would have been necessary.

NOTE: Budget documents can be viewed at local libraries, City Hall and online at www.GoColumbiaMo.com.