2012 Operating Budget Message to the Members of the Common Council and Department and Division Heads
October 4, 2011
When we began discussions on the 2012 city operating budget several months ago, several issues became immediately apparent. One was the need to make drastic cuts to our borrowing in order to reduce the impact of increasing debt service on the operating budget. The capital budget submitted last month makes those cuts. Another issue of concern was the ability of Madison citizens to absorb another hike in their property taxes at a time when their take home pay was reduced because of actions by the state earlier this year. The city is also facing reductions in state aids while our expenses, particularly for fuel and the Voter ID mandate, continue to rise.
In March of this year, there was a gap of $33 million between our projected revenues and expenses. In April the gap had closed by $6 million when increased payments by city employees toward retirement and insurance were factored in, but was still at $27 million. It was clear that we would need the help of everyone in city government to close a gap of this magnitude.
I directed city managers to submit budgets for their agencies at levels 5% below their 2011 budgets. This was a target level which would also keep the increase in the city portion of property taxes on the average home at 3%. Meanwhile, I asked a team of top city managers to look at the budget projections and, with the help of the Finance Department, identify possible strategies for savings in 2012. In addition, our Labor Relations team engaged in conversations with MPPOA, police supervisors, and Firefighters Local 311 with the goal of arriving at mutually acceptable agreements for cost savings since these employees were not affected by state actions in the same way that other city employees were affected.
Simultaneously, we held a series of community budget meetings to give Madisonians an opportunity to let us know their priorities in the upcoming budget. Most of you attended at least one. I have tried to respond to what we heard from our citizens. For example, basic services were consistently ranked at the top in importance to citizens. This budget will maintain basic services. Community services funding is intact and there are initiatives to address poverty and its consequences in our community. We found that citizens place a high priority on the City Clerk's administration of elections and I have given that agency additional funding to support the increased costs of elections due to the newly passed Voter ID law ($345,000).
One of my goals with this budget was to avoid layoffs and furloughs if at all possible and I am pleased that, for the most part, we were able to do this. It would not have been possible without the contributions of our employees toward health insurance and retirement, both last spring with new contracts for some of our unions and, most recently, with police officers, police supervisors, and firefighters, whose recently negotiated agreements will save the city over $2.5 million next year and ensure that none of these valuable employees will be laid off or furloughed. Other factors at work in closing the gap were a reduction of $2.65 million in our health insurance costs due to an unexpectedly low bid from one of our insurers and a one year "holiday" in city payments into our group life and salary continuation insurance reserves for a savings of $1.9 million. I must caution, however, that this holiday, which is possible in 2012 due to the healthy balances in these funds, cannot be sustained beyond a few years.
The 2012 operating budget which I am submitting today will raise city property taxes by 3.24% or $66 on the average home, which is above the target I initially set. Over the course of our work, it became clear that it would be necessary to do this in order to preserve important services and keep our skilled work force. Some highlights follow.
Employees in Streets and Engineering will be able to transfer between divisions in order to better utilize their time. The busy periods for workers in these areas occur at different times, so moving employees will generate savings for their agencies.
Some basic services which were considered vulnerable but are preserved in this budget include salt and sanding operations at last year's level, funding for clearing snow and ice from cross walks, life guard services at Bernie's, Esther, James Madison, Olin, Spring Harbor, and Warner Park beaches, open hours at Warner Park Community Center, and street tree replacements, which is more important than ever with the threat of Emerald Ash Borer to our urban forest. In addition, there is funding for the Streets Division to initiate the use of a new salt brine containing beet juice in snow clearing operations. This product is safer for our lakes.
Despite a reduction in state transit aids of over $1.8 million and increasing fuel costs, Madison Metro's budget maintains fares and service at 2011 levels.
I have provided funding to create a new position in the Community Development Authority to develop housing strategies, policies, and a housing plan. This position will provide staff support for a new housing committee.
A Special Project management/Business Development Specialist position will be created in the Department of Planning and Community and Economic Development to assist with key strategic projects such as the development of the Capitol East District and other targeted neighborhood development projects. This position will reduce the use of outside consultants for these projects.
Funding is provided in the City Clerk's office to administer 4 elections in 2012 as well as for increased election staff and training to administer the new Voter ID law ($370,000 and $345,000 respectively).
In response to dramatic increases in the use of opiates and corresponding overdoses and deaths in our community, I have included $45,000 for a heroin/opiates task force, which will be matched with $33,276 from Dane County.
For the first time since 2004 the city has received a federal COPS grant, which will fund three new police officer positions for three years. These officers will be used to increase staff assigned to the Special Investigative Unit initiative.
There is funding in the budget for a new Neighborhood Resources Coordinator to support the work of the Neighborhood Resource Teams.
On the other hand, I have had to reduce funding for street seal coating, work hours in the cemetery, mall/concourse, and parks, and median landscaping. The South Point drop off center will be closed and a number of vacant positions will be eliminated.
Despite my goal of no furloughs in 2012, this budget calls for 20 furloughs days for members of the Madison City Attorneys Association. At the time of submission of the budget, we have been unable to reach an agreement with them on increased employee contributions toward health insurance and retirement such as the rest of the city work force have agreed to make. This will save $142,000.
Working within the constraints imposed by our fiscal situation, we have been able to include some new initiatives. However, there have been many difficult choices that we have been forced to make. I feel that the result is a budget that is a balance between these tough decisions and moving the city forward in the manner that our citizens expect.
- Katie Crawley, (608) 266-4611