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Staff: $14.1 million budget gap; staff proposes fund-balance use, attrition and program cuts over pay-roll changes
Summary
Appropriation staff reported a $14.1 million shortfall between projected revenues and expenditures for FY2010 and outlined preferred gap-closing measures including use of fund balance for one-time needs, attrition, suspension of longevity pay, increased co-pays for insurance and departmental reduction plans; staff said pay-roll contribution changes or extensive furloughs were not recommended.
Chris Snead, reviewing the appropriation side, told council that after making line-item adjustments the city faces a roughly $14.1 million budget gap for FY2010. Expenditures are projected at about $298.6 million versus revenues of $287.9 million under staff’s draft.
Snead spelled out options staff had rejected and those being recommended: staff said they cannot legally undo a long-standing city practice of picking up employee VRS contributions and therefore are not recommending shifting that cost; furloughs would create large overtime costs and would require many unpaid days across the workforce; a four-day workweek is impractical for essential services. Instead, staff said they will pursue a mix of one-time fund-balance uses for capital, limited use of debt-service reserves, targeted retirement incentives, use of vacancy savings (attrition), suspension of longevity pay, suspension of tuition assistance, modest health-care cost-sharing adjustments, and departmental 10% reduction plans with an emphasis on protecting direct service delivery.
Snead asked each department for a 10% reduction plan and said staff will return with follow-up analysis and recommendations at the next work session. Council members requested additional audits of "limbo" funds (authorized but unspent monies), interest earned on those funds, and the schedule for expected hires and capital project start dates so council can judge how much one-time money is realistically available.
