Cincinnati’s 2012 Budget is Balanced & Avoids layoffs
I watched City Manager Milton Dohoney’s press conference this morning and live-tweeted his speech, but here is a summary of the budget he presented to the Mayor.
The budget is balance, with no layoffs, no health clinic closures, and includes funding for nurses in the Cincinnati Public Schools. The projected deficit was over $33M, and was eliminated due to increased income tax receipts, departmental cost cutting, better-than-anticipated state funding, elimination of vacant positions, and through a renegotiation of the City’s deal with Convergys. The Convergys deal alone gave the city an immediate $14M cash infusion, a commitment by Convergys to remain downtown through 2020, AND a clawback provision of $5M should they not meet staffing goals of at least 500 employees. The improved tax receipts were credited to the construction occurring throughout the city and employers hiring more people. This resulted in revenues from income tax to be up $6M over projections. $8M was saved from the elimination of vacant positions, and another $1M is to be realized through restructuring of the trash collection come March 1. There was a $3.2M budget carry-over from last year, which has been returned to the city’s reserve funds. Dohoney also stated that the city would begin seeing income from the casino taxes this year. However, none of that money was included in the budget since the numbers are not set in stone yet.
The Cincinnati Police Department is currently conducting an independent audit that is scheduled to be completed before the end of the year. Additional cost savings from this may be realized as early as the 2nd Quarter of 2012. The Fire Department was able to cut their budget for next year by doing their paramedic training in-house, as opposed to sending them to conferences and seminars.
The city is also working to change its fiscal calendar so that budget negotiations do not occur over the holidays and so that employees have greater certainty during that time. Dohoney also explained that the city will come very close to meeting their “100 lane-mile” paving goal for this year.
As a result of these savings, the Manager is recommending funding for the Neighborhood Business Districts and Community Councils be increased to $5000, and commented that the days have have budgets of twice that are probably gone. Funding to the Film Commission, Port Authority, Office of Economic Development (for retention and Small Business development), and the Riverfront and Washington Parks was also increased or fully funded. Dohoney, upon a question from a reporter, explained that Streetcar has absolutely zero effect on his budget recommendations. Also, while the financial picture for Cincinnati over the next year is very positive, there is still work to be done. Some of this work includes evaluating all city offices and ‘right-sizing’ the number of pools the city has.
The only real negative news were water and sewer rate increases. In order to maintain our aging infrastructure and comply with an agreement with EPA, water rates will increase ~$0.05 per day on average and sewer rates will increase ~$0.14 on average.
The key message from the City Manager was that the budget is balanced and no layoffs will be needed. While he expects some ‘tinkering’ from the Mayor and Council, he hopes that they will pass this budget much easier than in previous years. While offering no predictions for 2013 or beyond, he did explain that he expects the City’s financial picture to continue to improve.