6/12/03
To: Mayor and City Council
Fm: Fred Fowler
Cc: City Manager
Re: Proposals for budget action.
As requested, I am providing detailed budget recommendations for consideration on the 17th of June. I have studied the City Manager’s recommendations and other documents and there are several departures from them I would like to advocate. The purpose of this letter is to describe them, and allow staff time to analyze them (as they desire to do).
I wish to emphasize that these recommendations are meant to be considered as a unified package. The process of creating a budget is the process of making choices about the relative values of programs and services. I am proposing a combination of cuts and add-backs that are "balanced" and meant to be evaluated against each other. Each cut is proposed because I feel its value to the city is less than the value of the items I propose to restore. I myself would vote against these cuts if the items I have identified to be funded are not put back. Likewise, I would likely vote against many of the add-backs if cuts other than the ones I’ve identified are used to fund them.
I took the City Manager’s recommendation as my starting place. All of the proposals described below are adjustments to the City Manager’s plan. As such, they are balanced against each other. A total of $1,645,000 worth of programs and personnel are restored. They are funded by $1,637,000 of cuts over and above those recommended by the City Manager.
FUNDING REDUCTIONS:
I propose that $1,637,000 of further reductions can be made in four areas: The Department of Public Safety, The Department of Human Resources, The Organizational Effectiveness program within the Office of the City Manager, and in two budget "set-asides".
On April 25th the City Manager distributed copies of recommended departmental reductions drawn up by department directors and their staff. There are two recommendations from DPS that were made but were not included in the City Manager’s budget. They are:
I propose that these reductions be made. The bulk of the savings from the "Restructure Top Command" option involves eliminating the position of Assistant Director. Since this position is vacant, and since it has never been filled with a full time City employee, I feel it is a "service expansion" at a time when reductions are needed. Likewise, the OES Lieutenant is a resource for a program (OES) that has been allowed to decay by DPS management. The program is in a "rebuilding" mode now, with just a single activity (SNAP) that is underway. Eliminating the Lieutenant will not hamper the SNAP program, and any further "rebuilding" would amount to a "service expansion" at this time.
In the April 25th reductions documents, there were several recommendations by the HR Director that were not included in the City Manager’s budget. They are:
The bulk of these monies come from "staff hour reductions" as identified by the HR Director. I propose that these cuts be made. I note that the budget for the Human Relations department has grown 30% in the past two years, and I believe that some of that growth can and should be trimmed back .
All of the OE program reductions that were identified in the April 25th documents were included in the City Manager’s recommendation. However, I have reviewed the actual performance of the program as reflected in the City’s "Management by Objective" report, and I have found a number of program activities that are budgeted but do not appear to be either active or beneficial. Here is a list of them:
Activity
734101 "Operational and Planning Meetings" budget: $25 k spent: $3 k
734104 "Non Routine Process" budget: $23 k spent: $0.5k
734111 "Customer Contact management system" budget: $23 k spent: $9 k
734112 "Customer Contact Mgmt System Training" budget: $27 k spent: $2 k
734116 "Work System Assessment" budget: $27 k spent: $9 k
734117 "Organizational Effectiveness Training" budget: $38 k spent: $0
Also, there are a number of activities that I believe are of little value in our current economic situation:
Activity
734108 "External Customer Satisfaction Survey" budget: $38 k
734109 "Internal Customer Satisfaction Survey" budget: $37 k
734110 "Employee Atitude Survey" budget: $34 k
734113 "Quarterly Performance Report" budget: $23 k
734114 "Annual Performance Report" budget: $28 k
734115 "City Manager Annual performance Report" budget: $22 k
I feel that surveys can be useful, but to budget them annually is not reasonable in this economic climate. I propose that they be deleted from our ongoing operating budget and included as needed as "Special Projects" in our projects budget.
I feel that the drawing up of performance reports should not consume a monetary resource equivalent to a medium scale management analyst. I feel that the City Manager should prepare his own annual report, and ask his directors to prepare their own quarterly and annual reports.
I propose that all of the OE Activities listed above be eliminated.
The City Manager’s recommendation includes two "set aside" amounts. These are budgeted as ongoing expenses but are not appropriated and require Council action to spend.
In a fiscal crisis a decade ago, the Council of that time made a decision to eliminate another set aside. Prior to 1993 there was a "Service Level Stabilization" set aside that was also budgeted as an ongoing expense. The Council chose to achieve the goal of Service Level Stabilization by creating a reserve instead. That action eliminated the ongoing expense and effectively "capped" the resource at 5% of the City’s operating budget. Considerable money was saved by doing so.
I propose that we change our two remaining set-asides into reserves. I propose that we create a $1 million reserve for "City Space issues" and a $1 million reserve for "Fiscal Uncertainties". Each reserve would be equivalent to approximately four years worth of "set-aside" ongoing expenses as recommended by the City manager. Savings would be realized by eliminating the ongoing expenditures, and would be equivalent to 16 years worth of costs over the 20 year budgeting period.
Creating reserves would not significantly reduce the Council’s flexibility in allocating these funds. If the Council appropriates money from the reserves, the Council can choose to either deplete or replenish the reserves during the next budget cycle. This is in fact what is happening with the Service Level Stabilization reserve. It shrinks and grows with the shrinkage and growth of the Operating budget.
I estimate that creating two $1 million reserves in place of the "City Space Issues" and "Fiscal Uncertainties" set-asides would save $11.1 million dollars over the 20 year budget period. That works out to an equivalent $555 k annual cost reduction.
SERVICE RESTORATIONS
As stated above, the proposed funding reductions add up to approximately $1,637,000 in annual expense. I propose that those savings be used to restore services in 1) The Department of Public Safety, 2) the Public Works Department, and 3) the Parks and Recreation Department.
I propose that the following reductions proposed by the City Manager be restored:
I propose that City Repair of sidewalks be fully funded without asking homeowners to pay 50% of the cost ($345 k)
I propose that the following reductions proposed by the City Manager be restored:
CONCLUSION
As I stated above, I feel that these proposed reductions and restorations more fully reflect the values of our community than the recommendations of the City Manager in these areas. I hope that the Mayor and my Council Colleagues will study this proposal carefully and be ready to debate its merits on the 17th.
Only a spirited public debate will produce a budget that is both adequate and responsible. Our goal must be to make decisions that will be trusted by the public. I look forward to hearing your opinions about my proposal. Thank you for your interest and attention.