Wednesday December 10, 2008
Mayor Jerry Abramson today unveiled a plan to reduce government spending to close a projected $20 million hole in Louisville’s budget, the result of a national economic recession that’s eroding the city’s tax revenues.
Abramson’s plan maintains basic government services, avoids employee layoffs and shelters public safety agencies from the deepest cuts.
The city’s Neighborhoods and Finance and Administration departments will take the largest percentage cuts – about 10 percent each – while Police and Corrections departments will take the smallest reductions – about 2 percent each.
The highlights of the plan include:
- Closing government offices and placing non-essential employees on unpaid furloughs for four days – $2.9 million
- Freezing employee hiring – $2 million
- Slicing travel, office and optional training expenditures – $1.9 million
- Cutting some services, such as Sunday library hours and Monday community center hours, and grants to outside arts and business groups – $3.4 million
- Reducing overtime and delaying recruit classes – $3.6 million
- Postponing capital projects funded by cash including roads, parks and other improvements – $3.6 million
- Trimming operating expenses such as telephone service, contracts – $1.3 million
- Reducing funding for elected officials and related agencies by 3 percent – $585,000
- Increasing charges for take-home cars for all employees – $500,000
- Cutting salaries for mayor and directors by 10 percent – $205,000
The mayor’s plan does not tap into emergency reserve funds or raise taxes to balance the shortfall. “Government needs to follow the same approach that most families take when times get tough – reduce spending before raiding the savings account and the children’s college fund,” Abramson said.
But Abramson warned that additional spending cuts will be necessary in the coming budget year, if not before, because of rocky economic conditions and potential impact of the state’s $500 million budget deficit. The city is also facing an additional $13.5 million in required pension payments in the next fiscal year, which begins July 1.
Closing government for four days
To reduce personnel costs across much of government, the mayor will add another unpaid furlough day to the three previously announced, closing city offices for four days over the next six months.
Most non-essential personnel will be placed on unpaid furloughs on Dec. 26, the day after Christmas; Jan. 2, the day after New Year’s Day; April 3, the Friday of local schools’ Spring Break; and May 1, Oaks Day. Employees except for sworn police officers and firefighters will be affected by the furloughs.
Some employees, union representatives and council members suggested additional furlough days as an alternative to layoffs after employee unions rejected proposals to rescind 2 percent pay raises for all employees for the next six months.
Hiring freeze and spending restrictions
The mayor’s previously announced freeze on filling vacant jobs and restrictions on travel, office and training expenses will save about $3.9 million through the end of the budget year.
The hiring freeze and other personnel savings equals about $2 million and the spending restrictions will save $1.9 million.
Closing aging firehouse, reducing overtime
Abramson will accelerate the next phase of the Fire 21 modernization plan and close one of the city’s seven downtown firehouses, a 137-year old station at Sixth and York streets. Chief Greg Frederick will redeploy its 12 firefighters to other nearby stations to reduce unscheduled overtime.
Another 12 sergeants, who serve as office administrators and drivers for division majors, will also be reassigned to firefighting responsibilities.
The combined re-deployments, which will take effect Jan. 1, will save about $930,000 in costly unscheduled overtime in the next six months.
The station at 6th and York streets is the city’s oldest fire station and is surrounded by six firehouses within a 2-mile radius. A professional study of the city’s fire deployment recommended closing the house three years ago, saying there are more than enough stations to serve the downtown’s needs.
Chief Frederick said a computer analysis of response times shows that trucks from neighboring fire stations can handle downtown calls without slowing response.
“Closing this outdated firehouse will not diminish public safety,” Frederick said. “Our surrounding stations will provide coverage without a negative impact on response times.”
In addition to redeployment of firefighters, the city will save more than $1.4 million in overtime as a result of planned shift changes in EMS and more careful management in Corrections, Emergency Management and Metro Parks.
Delaying recruit classes
The mayor’s plan would delay recruit classes in fire and corrections departments by about six weeks and merge two scheduled police classes into one. The moves will save about $860,000 and maintain adequate staffing levels in public service agencies.
Redeployment plans will ensure adequate levels in the fire department, and the police department will maintain the current staffing levels due to lower than expected retirements and additional recruits.
Postponing capital projects
The mayor’s plan halts spending on about $3.6 million in capital projects that rely on cash instead of borrowed funds. These are one-time savings that will help solve the current revenue shortfall, but will not save money in the next fiscal year, Abramson said.
The affected projects are primarily those which aren’t under contract or construction. The list includes everything from delaying the purchase of new street signs for downtown to delaying building a parking lot on Frankfort Avenue.
Increasing charges for take-home cars
About 1,200 employees who have take-home cars will pay more for the benefit beginning January 1, 2009. Employees who use the cars for work and personal use will pay $100 a month, a $70 increase from the current $30 share. Employees who use the cars for second jobs will pay $160 a month, a $100 increase from the current $60 share.
The changes will generate about $500,000 in additional revenue if current employees opt to continue receiving the benefit, which is valued at $8,000 or more annually. If employees opt out of the program, the city will save a similar amount from decreased maintenance, fuel and replacement costs.
About 1,100 of the city’s 1,200 take-home cars are currently issued to police officers. About half of those police cars are marked.
Pay cuts and other savings
The remainder of the cost-savings comes from the 10-percent cuts in the salaries of the mayor and department directors; 3-percent cuts in General Fund allocations for other elected officials and related agencies; and reduced spending on outside contracts, telephone services and other operating costs.