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Coronavirus
As a new strain of coronavirus (COVID-19) swept through the world in 2020, preparedness plans, masking policies and more public policy changed just as quickly. WVXU has covered the pandemic's impact on the Tri-State from the very beginning, when on March 3, 2020, Ohio Gov. Mike DeWine barred spectators from attending the Arnold Sports Festival in Columbus over concerns about the virus, even though Ohio had yet to confirm a single case of COVID-19.

Cincinnati's Budget Deficit For The New Fiscal Year Continues To Grow

Bill Rinehart
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WVXU

Cincinnati officials are now projecting a $91.4 million general fund deficit for the budget year starting July 1.  That's a $10 million increase from two weeks ago.

Plus the city still has to close a $9 million shortfall in the current year budget that ends June 30. But that has been reduced from $15 million two weeks ago.

City revenues, especially income tax collections, have declined dramatically because of the coronavirus pandemic.

Officials so far have identified $32.8 million in reductions for the FY21 budget:

  • Department reductions of $19.2 million which includes eliminating vacant positions, billing back to restricted funds, and eliminating police and fire recruit classes for FY 2021
  • Across the board reductions of $5.3 million including healthcare savings, freezing merit increases and cost-of-living-adjustments (COLAs) for non-represented employees, and eliminating proposed new programs
  • Shift Human Services Funding of $4.8 million to Community Development Block Grant (CDBG) CARES stimulus allocation
  • Eliminate future vacant positions in the amount of $3.5 million by offering an early retirement incentive program
  • Avoids layoffs to maximum extent possible

Officials are also looking at across-the-board personnel changes to health care, wages and benefits. But since many city employees are represented by labor unions, those reductions would require negotiations with the city's collective bargaining units.
City Budget Director Chris Bigham said many departments will be asked to leave positions vacant to save money.

"Our message is going to be, you need to reorganize, you need to do things differently, as we're all personally doing right now," Bigham said. "We need to look at how we do things and come up how we can do them differently, but still perform the same amount of service with the reduced staff."

Even with those reductions, the city would still have a projected $58.6 million gap to close. 

The city has the following options to solve that problem:

  • State or federal support within current CARES Act funding of an estimated $40 million, but that needs to be confirmed and approved by federal officials
  • Utilize secured borrowing for the difference to balance as a one-time use
  • Any change to the revenue estimates could increase or decrease the gap.  Revenue estimates assume businesses return to normal during summer 2020

"There have been, I know, phone calls and letters and everything else to the state and to the feds to try to get them to free up those dollars," Bigham said. "Our goal would be to get somewhere in the neighborhood of $40 million. The $40 million would then get our deficit down to about $18.6 million."
The city has about $45 million in reserve accounts that could be used to balance the budget.

The city has secured a $50 million loan from PNC Bank to assist with emergency spending. Eventually the city will have to issue bonds to repay that loan, and those bonds would be repaid with money for the city's lease for the Cincinnati Southern Railway.

City Council authorized borrowing another $100 million, but so far the city has not identified a lender to secure those loans.

Meanwhile, to help with the remaining $9 million deficit for this fiscal year, the city will continue its temporary emergency leave (TEL) programs or furloughs for some city workers.

Starting Monday, 354 employees will remain furloughed. On April 5, nearly 550 employees were on TEL.  That included 167 Cincinnati Health Department workers who have now been recalled. 

The current furloughs will likely continue through June 27, but some workers could be called back if needed.

Credit Provided / City of Cincinnati
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City of Cincinnati
Cincinnati department furloughs as of May 3. Option 1 is employees using accumulated leave time and still getting a city paycheck. Option 2 is those furlough with no city pay and eligible for unemployment benefits.

Meanwhile, the Budget and Finance Committee Wednesday rejected a resolution from Council Member Chris Seelbach that would have asked FC Cincinnati to voluntarily return some the city money that's being used for infrastructure work at the soccer team's new stadium in the West End.

Seelbach wanted the team to return $6,383,000 of city funding, which represents about 20% of the city's financial commitment to the project.

Seelbach said that was equivalent to the cuts to human services, economic development and neighborhoods agencies that council voted on two weeks ago to assist with the budget shortfall.

Jay Hanselman brings more than 10 years experience as a news anchor and reporter to 91.7 WVXU. He came to WVXU from WNKU, where he hosted the local broadcast of All Things Considered. Hanselman has been recognized for his reporting by the Kentucky AP Broadcasters Association, the Ohio Society of Professional Journalists, and the Ohio AP Broadcasters.