Mayor John Cranley presented a new budget Wednesday morning which closes a $22 million budget hole without lay-offs of city employees.
Cranley, in a press conference at police headquarters, said the $358 million general fund budget, if passed by city council, would be the first structurally balanced city budget in more than a decade.
“No gimmicks, no on-time revenue streams,’’ Cranley said, surrounded by several city council members and representatives of the police and fire departments and city employee union officials.
City council must pass a new budget by the July 1, the beginning of the city’s fiscal year.
Cranley said that he expects council members to try to amend parts of his budget, but asked “that if they do, I only ask that those amendments be structurally balanced, meaning that if they propose new spending, they propose corresponding cuts.”
The new budget includes $21.6 million in budget reductions and $2.8 million in “revenue enhancements” – including new fees for such things as security alarm registrations and special event permits and increases in fees for building permits and fire safety inspections.
Casino money - $3 million worth - would be diverted from the capital budget to the general fund budget to help plug the gap.
It does not raise any city taxes.
“At long last, the budget puts our financial house in order,’’ said Cranley, a Democrat who was elected last fall on a promise to pass a structurally balanced budget without the use of one-time sources of funding, as has happened in past years.
The budget cuts include a 4.5 percent across the board cut in city departments, which will be achieved mostly through attrition.
It also includes a new 20 member recruit class that will be hitting the streets soon; and a 60 member police recruit class later in the year. It will also include money for police overtime for “hot spots” in the city.
“This budget refocuses city government on basic services, and invests in items like police and fire protection, repairing roads and funding projects in the neighborhoods,’’ Cranley said.
In addition, Cranley said his proposed budget would:
- Prioritize basic services “by putting more money into road paving than ever before” and provide additional money for fixing potholes after “a long, hard winter.”
- Keep open all of the city’s remaining swimming pools this summer;
- Approve the 1.5 percent pay increase that was promised to non-safety unionized employees last year under the now-dead parking meter lease deal;
- Include $2.5 million for the redevelopment of the College Hill business district; and include $900,000 for street improvement on Reading Road in Bond Hill near the former Showcase Cinemas site, which he said he hopes will become the new home of Catholic Health Partners.
Nearly a third of the projected $22 million budget deficit is gained by reducing the city’s employer contribution to the city employees’ retirement system, which he said would result in a savings of $7 million.
He is also counting on mediation with city employee unions to allow $100 million to be taken from the health trust fund.
“It’s funded at $600 million right now; and even the unions have agreed that it is overfunded,’’ Cranley told WVXU.
Currently, the city entered into mediation with employees and retirees that is overseen by U.S. District Court Judge Michael Barrett to find a long-term solution to the city’s pension woes. It has an $829 million unfunded liability and is only 63.2 percent funded.
That was a major reason two bond rating firms, Standard & Poor’s and Moody’s, lowered the city’s bond rating from “AA” to “AA-".
Cranley told WVXU that he believes the mediation and a budget that will increase city funding of the pension system will improve the city’s bond rating.
The mayor told WVXU Interim City Manager Scott Stiles delivered his version of the city budget to the mayor’s office Tuesday. Although he had 15 days under the charter to make revisions and present a budget to council, Cranley made his changes quickly and unveiled his budget less than 24 hours after receiving a budget document from Stiles.
“I got it from Scott yesterday, but we have been working together on this for months,’’ Cranley said.
Three council members were present at Tuesday’s budget unveiling – Vice mayor David Mann and council members Christopher Smitherman and Kevin Flynn.
Flynn said he will study the proposal, but had a generally positive reaction.
“I’m very encouraged by what (Cranley) said today, but this is just the beginning of the process,’’ Flynn said.
The mayor's proposed budget now goes to the city's Budget and Finance Committee, which is made up of all nine members of council.
Republican council member Charlie Winburn, who chairs the committee, called it a "wonderful budget" at Wednesday's council meeting.
"I wanted some more deeper cuts, but, you know what, it's not about me, it's about the team,'' Winburn said, referring to council. "What I like about this budget is it is a 2015 budget that doesn't cause anxiety among police and city employees."
Democrat Chris Seelbach, who has clashed with Cranley on some issues, said at the council meeting that he appreciates the fact that the mayor's budget does not include the threat of layoffs.
"It's not perfect; and there may be changes we can make, but I must say I am pleasantly surprised,'' Seelbach said.