The budget is the biggest thing going on this week . . . To wit, here's an EXCLUSIVE LOOK at City Manager Wayne Cauthen's Comments on it . . . I've just copied them rather than just play translator/reporter/journalist.
This isn't too complicated and I think people who really follow this stuff can read and decide for themselves.
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This is a very difficult budget requiring hard and unpleasant decisions.
As I look at the budget ordinance that was passed by the Finance Committee, what strikes me is the fact that we have more points of agreement than disagreement, and the modifications to the submitted preliminary budget are reasonably few. I think this is a tribute to efforts dating back to our strategic planning retreat and the recent employment of Public Financial Management (PFM) to provide a thorough review of our present and future financial condition as well as recommendations of options for addressing our budget shortfall.
Several difficult reductions for which there is general agreement included in the submitted budget remain:
Fifteen percent reductions to our funding of regional amenities such as the Zoo, Truman Sports Complex, Liberty Memorial, etc.
Freezing the salaries of all city employees
Reducing curb-side recycling to every-other-week
Eliminating the Apartment Rebate Program
Eliminating approximately 330 filled and vacant positions in the General Fund and General Fund Supported funds.
Reducing the cost of employee benefits
Modifications of the Public Safety Budget
Efficiencies through consolidation of Police redundancies
Fire Department operations efficiencies through mutual aid agreement
Review of MAST operations for efficiencies through consolidations of redundancies
Furthermore, once the budget is adopted, we need to continue working together on developing a revenue enhancement plan for consideration before the November 3rd election date so this City can address the issue of its insufficient income to provide the level of essential services expected and needed by our residents. I believe we all agree that we are with this budget cutting services to the bare bone and cannot continue this downward trend without considering revenue increases in some form.
However, even though we are in general agreement on most of the major issues, I do have some immediate concerns and points of clarification I wish to share with you regarding some of the items included in the amendment to the budget ordinance.
Merging the Development Finance Function into the EDC – $611,561 -- The economic recession has amplified the challenges of economic development within the City and has brought to light areas of needed improvement, addressing these areas in the time remaining before budget adoption is not the best solution. As such, I recommend using the annual review process outlined in the ED&I policy. That review will comprehensively address concerns with the process as well as implement needed adjustments to correct deficiencies. Given the City’s recent audit finding and restatement related TIF project record keeping, it is important to be aware of the potential internal control issues that would arise should the EDC become solely responsible for this program, specifically the loss of segregation of duties and City oversight of EDC activities. In simple terms, the designed checks and balances necessary to fully vet tax incentive proposals and maintain the programs would be lost. Included in this discussion is the confidentiality of business and taxpayer records, under the federal law, various financial records are confidential and the IRS may take issue with the City sharing these confidential records for purposes other than tax collection. There are also several non-TIF related functions currently performed by development finance staff, such as the $90 million New Market Tax Credits Program, monitoring of Chapter 100 Bonds, and incentive review. Without funding, these programs will be significantly impacted and in some cases jeopardized.
Housing Program Reduction – $139,378 – The City's CDBG/HOME maximum administration capacity has been attained, so the funding for Housing administration must come from the General Fund. Adequate funding of the program is essential for the City to regain control of its housing program. In addition, it is essential that we fund the director position as both HUD and the receiver have made a director/single point of contact, a requirement for the return of these programs to city control. In addition, not only is HUD requesting an increase in the amount of training we provide our employees in the area of HUD funded programs but also that the City increase the number of qualified persons administering the programs.
Reductions to City Communications (Channel 2 and Public Relations) – $720,992 – The submitted budget proposed consolidating much of the City’s communications functions into the City Communications Office, and many departmental Public Information Officers are eliminated. A budget reduction of the size proposed by the committee substitute completely eliminates the communications function, other than allowing Channel 2 to operate on a very limited basis, and may even require costly outside contractors to accomplish production of just the weekly council meetings. These cuts would prevent the city from effectively keeping the public informed about city programs, services, issues, and even emergencies, at a time when communicating has never been more important. As indicated in the Citizen's Satisfaction Survey, the public wants more and better information from the city, not less. The survey shows that citizens consider communications one of the most important and basic essential services. With the size and scope of these budget cuts citywide, we must be able to communicate the information citizens will need to access city services, via every communications tool we have available. We need to ensure our residents and prospective businesses that Kansas City is open and operating and doing its best, despite difficult economic times.
Human Relations Compliance $100,000 - The proposed reduction in the Contract Compliance Section are offset in Prevailing Wage Statutory Penalties and fines. In 2007 the contract compliance section collected approximately $148,082 in worker's restitution and $109,790 in penalties and fines that went directly into the City's general fund account. The section assisted more than 317 workers in collected wages due them by contractors. In 2008 the contract compliance section collected $149,077 in worker's restitution and $57,275 in penalties and fines. There are two outstanding transactions that will garner an additional $54,000 in penalties and fines by month end. To date, the section has assisted more than 101 workers with restitution damages. In summary, this section has shown a consistent history in collecting statutory penalties and fines that would eliminate the shortage mentioned in the budget amendment.
Fire – $1,200,000 -- The reduction proposed in the submitted budget was to eliminate two fire companies with the identification of the affected companies accomplished through the labor-management process. No lay-offs would result. Staff reduction would occur through attrition. However, closing a third company would require lay-offs, and this triggers additional negative consequences. Not only would the City lose the $167,670 “SAFER” Grant estimated in the budget, but we would need to repay SAFER Grant proceeds received over the past three years, as laying-off firefighters would violate an eligibility requirement for the SAFER Grant. Furthermore, additional reduction of companies reduces the number of firefighters “on the street” and available for emergency deployment. We are seeking to ensure the budgeted savings in the Police Department does not result in reducing the number of uniformed officers serving our citizens; we should take similar care in minimally impacting the number of firefighters available for emergency response.
International Office – $98,135 -- The submitted budget reduced the City’s funding for the International Office to a single staff member. I believe this minimal staffing is needed for at least protocol responsibilities when foreign dignitaries and business executives visit Kansas City. Furthermore, in conversations with the Greater Kansas City Chamber of Commerce, there does not appear to be much interest in funding and housing the international function at the Chamber at this time. However, as the economy improves I am hopeful that outside entities may allocate funding to sustain international activities.
Parks and Recreation Engineering and planning – $564,498 -- I concur with the recommendation of charging these positions to capital and maintenance projects. I also believe that maintaining a separate engineering and planning function in the Parks and Recreation is redundant and should instead be consolidated as part of a city-wide engineering and planning function.
Youth Advocacy – $119,020 -- I recommend retaining the $119,020 included in the submitted budget for this program because of its history of being able to use these dollars to leverage investment and involvement from the Chamber of Commerce and other local entities to provide needed opportunities, education, and work experiences for our young people. In addition, this is a program that needs to be positioned to leverage recovery act grants, but to accomplish that we have to have human infrastructure in place to be eligible. In a worst-case situation, we could be eliminating $119,020, but potentially losing 1.5 million in potential federal recovery/stimulus money. This division has created a fluid mechanism to integrate numerous green collar training programs. These evidenced based training programs targeting high school drop outs (38%) and adjudicated youth will strengthen our ability to secure federal funds from the following agencies: Department of Labor, Department of Health & Human Services, Department of Justice, Housing & Urban Development, Department of Energy and the Environmental Protection Agency. The innovative mechanism described above has the potential to serve as a national model.
Police – I concur with the need to pursue grant funding to supplement the budget so there is no need to reduce the current number of authorized uniformed positions in the Police Department. My recommendation is to utilize COPS grant funds to accomplish this objective,
Community Justice Program (CJP) Unit and Aim4Peace -- $771,263 – I recommend that funding for these programs be restored, as the reallocation of these funds to Truman Medical Center (TMC) does not impact the overall shortfall in the General Fund and General Fund supported funds. The entire $771,263 CJP Unit budget, including Aim4Peace, is funded through the Health Levy. The reduction in funding to TMC is the result in an overall reduction in Health Levy collections. Even with this reduction, TMC remains the largest recipient of Health Levy funds, and the $771,263 restoration would account for approximately 0.22% of the hospital’s total revenues. CJP and Aim4Peace have no other source of funding and are developing a public health strategy that is working.
The CJP Unit leveraged the $771,263 and produced a $3,009,655 return on the city’s investment: (1) CJP Unit obtained $593,167 in two active grants with terms that end June 2011 (Targeting Violent Crime Initiative and Mental Health Court) and (2) CJP Unit obtained $2,416,488 savings through Aim4Peace (Health Care Savings $963,754 + Law Enforcement Savings $1,449,734). Aim4Peace is the only KCMO governmental-community supported program with an independent evaluation demonstrating its unreplicated effectiveness as an important public health and safety tool. I will continue to seek other funding options to restore the $773,083 including the JAG Grant, but I urge you to restore this basic public service.
In all, my concerns and clarifications involve only 10 items and a reasonably small sum of dollars. We will be receiving stimulus monies and must have the infrastructure in staff and programs to be able to acquire and utilize these essential resources. It is not my intent to be critical of alternative proposals but rather to offer further perspective and context in which to make your final decisions in an effort to ensure that the 2009-10 adopted budgets reflects the best and most efficient allocation of our limited resources.
As always, I am available and welcome the opportunity to meet with you and respond to any questions, comments or concerns you may have.
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