Thursday May 26, 2011
Addresses $22.5 million shortfall with one-time savings,
Mayor Greg Fischer today unveiled his first city budget which, despite a $22.5 million shortfall, maintains basic city services and workforce levels while making strategic investments in the future.
The $712 million spending plan will re-open libraries on Sundays and includes money to design the new Southwest Regional Library in Valley Station and renovate the Western Branch, part of the mayor’s commitment to making Louisville a center of lifelong learning.
The largest portion of the budget — 57 percent — is devoted to public safety and includes new fire and police recruit classes, the creation of a new Emergency Management Services academy and the implementation of a citywide emergency alert system. The mayor also dedicated significant resources to synchronizing suburban traffic lights and making much-needed improvements to roads.
“This is a very basic budget that continues the important work of government without painful cuts that would impact citizens,” Fischer said. “This budget was cobbled together with more creativity than cash, and more stopgaps than solutions. We still have a major structural deficit — expenses don’t match revenue — and it’s my goal to eliminate that deficit during the next four years.”
The mayor and his administration were able to close the $22.5 million shortfall by:
· Requiring all employees making more than $70,000 to take a week of unpaid furlough (saving $250,000);
· Asking, but not requiring, all other employees making under $70,000 to take a week furlough (estimated potential savings $1 million);
· Using $3.5 million from police-seized drug money which has been sitting in a savings accounts earning very low interest;
· Saving $2.8 million on health care costs because the city has built an adequate safety reserve to cover health care costs for two months;
· Exchanging $1.3 million in general fund Metro Council Capital Infrastructure Funds with $1.3 million in Municipal Aid Project (saving $1.3 million)
· $3.3 million in savings from annual arena contribution
· $1 million from the business office management consolidation/centralization announced earlier this year
· $3 million in sales of surplus property (former Neighborhoods building at First and Liberty streets; Miller’s Lane former fleet facility)
The city also had to account for an additional $1.7 million in increased fuel costs, due to the cost of gas. Meanwhile, net revenue projections improved $7.2 million from the original January forecast.
The budget includes no raises for non-union employees, but allows for pay increases, per union contracts.
Fischer said if the city is to overcome the deficit, it must create more jobs. That’s why he included several new director positions in the Economic Development Department to grow jobs around innovation, globalization and the military/defense cluster to take advantage of the BRAC relocations at Fort Knox.
“I know some people will question spending money on economic development staff in tough times, but those are exactly the kind of times when you must invest in economic development,” Fischer said. “I’m looking and planning ahead for the next decade.”
In preparing his first budget, Fischer held five budget hearings across the city to receive direct input from citizens, solicited suggestions from city employees and worked closely with the Metro Council.
“I received hundreds of suggestions – including some people who had specific, concrete ideas for reducing costs,” Fischer said. “People I see at the grocery or on Facebook and Twitter haven’t been shy about telling us what they think, either -- and we’ve incorporated some of those ideas into this spending plan.”
The full city budget is available at www.louisvilleky.gov/yourtaxdollarsatwork