City Administration Recommends 2015 Structurally Balanced Budget With No Layoffs
For the first time in eight years, the City of Cincinnati Administration is proposing a structurally balanced General Fund Operating Budget with no layoffs.
The City Administration is recommending a 2015 All-Funds Budget totaling $1.3 billion, which includes a $990 million Operating Budget and a Capital Budget totaling $339 million. The City Administration projected a $21 million General Fund Operating Budget deficit with revenue estimated at $355.4 million and expenditures totaling $376.5 million.
- Recommended FY 2015 All-Funds Budget (with Mayor's message and motion)
The City Administration is proposing to close this budget deficit through $18.3 million in net expenditure reductions and $2.8 million in increased revenue.
The pressure on local governments to provide services following a slow recovery from two recessions (2001 and 2007-2009) and reductions in state revenue resources, totaling $28 million (in the General Fund Operating Budget), is enormous. Despite these challenges the Administration has been able to structurally balance the budget and protect core city services.
"The 2015 All-Funds Budget achieves financial stability while maintaining critical city services, thereby positioning the City for long-term stability and future growth," said Scott Stiles, Interim Cincinnati City Manager. "Key areas of funding support include core services, public safety and neighborhoods."
Difficult Decisions Set Stage For Continued Prosperity
Achieving structural balance in the General Fund fulfills commitments the City made to bond rating agencies; however, some City priorities will not be met in 2015. The City Administration has asked all departments to reduce their budgets by an average of 4.4 percent.
Layoffs of City employees are not proposed in this budget. However, 40 vacant or unfunded (for all or a portion of 2015) positions will not be filled for a combined savings of $2.6 million. Additional expenditure savings totaling $8.2 million will be realized from healthcare premium savings, miscellaneous and non-personnel savings, fuel and automotive repair savings, the elimination of TIF borrowing repayments and by shifting eligible costs of non-general funds, and other measures.
In March of 2014, Cincinnati City Council took dramatic and unprecedented actions to preserve the City’s pension plan by authorizing the City Manager to enter into a global consent decree.
The City is committed to achieving a transfer of up to $100 million from the Cincinnati Retirement System (CRS) health care trust to the pension trust, in addition to contributing a sustainable 14% employer contribution to CRS. This will save $7.1 million in the City's General Fund Operating Budget.
A 14% contribution rate is comparable with Ohio Public Employees Retirement System (OPERS).
These actions, and others within the parameters of the approved ordinance, could eliminate the $829 million unfunded liability and fully fund the system within 30 years.
The City Administration recommends instituting fee increases for building permits, special event permits, safety inspections and new security alarm registrations. Revenue from the increased fees, along with $2 million generated through more parking enforcement staff, will create a combined revenue stream of $2.8 million. These funds combined with $3 million resulting in the shift of Focus 52 projects to the Capital Budget will be used to balance the General Fund Operating budget.
A 7.5% revenue increase is proposed for Greater Cincinnati Water Works in order to maintain critical infrastructure for water distribution and fire protection services. The revenue increase is effective January 1, 2015. This will cost the average Cincinnati residential household an additional $4.17 per quarter, which is equal to less than 5 cents per day (based on 148.6 gallons per day).
Investing In Public Safety, Neighborhoods To Improve Quality Of Life
"Presenting a structurally balanced budget with no layoffs was a top priority, but the proposed 2015 Budget also shows that our commitment to investing in public safety and neighborhoods has never been stronger," added Stiles.
The 2015 budget includes $5.9 million for a new police recruit class and lateral transfer class as well as overtime funding that will be used to boost patrols in hotspot areas and keep neighborhoods safe. An additional $1 million is included for police in-car cameras and Tasers.
The City Administration recommends continuing to fund the Cincinnati Initiative to Reduce Violence (CIRV) at its current level of $573,000. CIRV is a community collaborative effort initiated in 2007 designed to quickly and dramatically reduce gun violence and associated homicides.
The Cincinnati Fire Department will graduate a 50 member recruit class which will be fully deployed in FY 2015 and reduce brownout situations.
The City Administration also recommends $2.6 million to fund service enhancements such as Smale Riverfront Park and the re-opening of two outdoor pools, Filson Pool in Mt Auburn and Spring Grove Pool in Spring Grove Village, which were slated to close. All recreation centers will remain open, and park maintenance funding will be preserved.
The 2015 Capital Budget recommendation includes $15 million to rehabilitate 100 miles of city streets.
Additionally, $3.6 million is earmarked to purchase fleet vehicles such as police, fire and garbage trucks.
Funding continues for the Neighborhood Support Program and the Neighborhood Business District
Support Fund. Funding of the Neighborhood Enhancement Program is also recommended. The program will focus efforts in East Price Hill this spring and Walnut Hills this fall.
Focus 52 projects remain funded, and $2.4 million is recommended for the Human Services Policy, which funds programs such as the United Way, Cincinnati Human Relations Commission and the Center for Closing the Health Gap.