Sunday, May 24, 2009

Budget: FAST or Famine?

I'll bet you thought I misspelled FEAST in the title, didn't you?
Nope, that was just a trick to introduce you to what FAST stands for - Fiscal Alternatives for Stability Taskforce.
That's the internal task force charged with recommending City cost savings measures.
It's 74-page report was issued earlier this week, after over 6 months of hard work, and appears on the City's website.

Back to the title;
To 'FAST' connotes a voluntary act.
But, Famine is not voluntary.
Both terms reflect scarcity, and forced austerity and hardship.
Which would you prefer, if you HAD to pick one?
Would you rather have a choice, or just be forced into one?

This subject is probably something not many people want to read about.
But, with the severe and sudden lack of funding brought on by our economic depression, some dire consequences now face us.
More important is how the City decides to deal with this.
Since the City's General Fund, of which over 50% pays for the City's public safety employees, is most severely impacted, how will the necessary staff reductions be made?

This is the question, the answer to which is so important!
Since it is very likely that citizens will experience adverse impacts from service level reductions in unprecedented ways, maybe its time they weighed in on their preferences.
Would they rather have mainly Planning, Parks, Library, Museum and related cutbacks?
Or, reductions in Police, Fire and EMS services that most people consider essential?

Rather than such a simple either-or choice [win/lose], another option may be available, but it would require the willingness of City employees -and the collective bargaining units to which most belong- to reduce planned increases to wages and benefits.
That kind of major cost reduction -without as severe staff reductions- would be difficult to achieve, but it is certainly possible if enough City employees agree to such a plan.

Working against this creative possibility, history demonstrates that unions and collective bargaining units do not willingly give up ground they have already gained through hard negotiation.
In fact, given the choice between lay-offs and rescinding wage & benefit rate gains, they likely would pick lay-offs.
In normal times, who would disagree with that stance, but, these are not normal times.
These are desperate times!
And unusual measures are now required to preserve both our safety and our quality of life.

If enough voluntary employee options are offered, a win-win scenario is possible that could reasonably benefit everyone.
As the saying goes, 'if you are not part of the solution, you are part of the problem'.
I hope folks will see the City's budget crisis is everyone's problem.
But, the situation is not hopeless.

In time, better economic conditions will return and begin to restore the City's necessary funding levels.
In the meantime, the City needs to do the hard work of better determining its priorities, including those levels of service that are sustainable over the long term.
In that light, this fiscal crisis can also be treated as an opportunity that can't be avoided!

There are always opportunities, but not always do they demand immediate attention.
Let's don't waste this opportunity...

From the City's website, []:

• Fiscal Alternatives for Stability Taskforce (FAST) Report - May 18, 2009 (PDF)
An internal study group identified City deficit reduction ideas totaling more than $8 million in a report provided this week to Bellingham Mayor Dan Pike. The recommendations focus primarily on spending reductions, though a few describe options for increasing revenue.
Many of the group's recommendations, however, must be approved by City Council or another jurisdiction, or bargained with one or more of the City's eight employee unions, before they can be implemented.

Examples of the 34 recommendations of the Mayor's Fiscal Alternatives for Stability Taskforce include:

• Delay the hiring of the Public Development Authority Executive Director;

• Cancel mid-2009 salary ''bumps'' to eligible employees, and freeze salaries and wages for all employees in 2010;

• Reduce General Fund subsidy of the Art and Children's Museum;

• Charge higher admission and facility use fees to people who live outside Bellingham;

• Cross-staff the Bellingham Fire Department's primary ladder rig to free personnel for other duties;

• Install a limited number of automated citation cameras in school zones with high levels of infractions and intersections with the most accidents due to drivers running red lights;

• Place a moratorium on the purchase of ''Green Power'' pending exploration of less costly ways to support City sustainability goals;

• Reduce City employee benefit costs, such as by using less costly insurance plans with higher deductibles;

• Incorporate the statutorily allowed 1% property tax levy increase and the City's banked property tax capacity into the 2010 budget to avoid further service cuts.

The Fiscal Alternatives for Stability Taskforce (FAST) included City department heads, managers and City Council members Stan Snapp and Gene Knutson. Pike appointed the group in November 2008 to find new ways of doing business that would provide sustainable, lower-cost approaches to meeting the City's mission.

Pike said he will review carefully the group's recommendations to determine steps that he will implement immediately, those he will study further, propose to City Council and/or employee bargaining groups for review and approval, and those he will reject.

"The report contains many intriguing and useful ideas, and I appreciate the effort and creativity FAST members put into their research and recommendations," Pike said, adding that he expects to announce his decisions about next steps for the recommendations before the end of May.

Bellingham Chief Administrative Officer David Webster, who led the task force, said the effort is one of many initiatives under way to help solve a projected $6 million deficit in the General Fund in the 2010 fiscal year.

"Unabated, this deficit is expected to mean between 50 and 75 additional staff layoffs on top of the 30 positions eliminated through other austerity measures since the summer of 2008," he said.

Webster reiterated that moving forward on the report's recommendations requires varying levels of decision-making authority, including items that can be initiated by the Mayor, items requiring Council or another jurisdiction's approval and those that must be bargained with one or more of the City's eight represented employee groups.

He said the FAST recommendations include:

• $1,477,500 in cost reductions feasible by management prerogative;

• $439,000 in additional cost reductions requiring Council or other jurisdictional approval;

• $4,830,000 in cost savings that will require voluntary concession or negotiation by bargaining units;

• $45,000 in new earned revenues executable by management prerogative;

• $1,530,000 in one-time or ongoing revenues that will require Council approval

"Though most are not pain-free choices, FAST concluded that options exist to solve the budget crisis and largely avoid high numbers of layoffs, if management, policymakers and labor work together for the greater good," Webster said.
Updated: May 21, 2009


Excerpts from The Bellingham Herald article of Thursday, May. 21, 2009:

Bellingham task force recommends $6 million in cuts for 2010

• A government task force has recommended $7.7 million in city budget reductions and revenue increases for 2010 as part of a long-term strategy for the new state of the economy.

• About $8.3 million total could be saved in 2010 and beyond, according to a financial task force report released by city officials Thursday, May 21.
But a large chunk of the savings may be contingent on whether the eight unions that represent various employee groups would agree to not taking a mid-2009 raise and also would agree to a wage freeze and benefit reductions for 2010.

Without $6 million in cuts, officials are faced with cutting 50 to 75 positions in the fall....

Officials repeatedly said Thursday that the report is only recommendations to Pike, who will make decisions about how to proceed by the end of May.

The group, which consisted of Chief Administrative Officer David Webster, city department heads and City Council members Gene Knutson and Stan Snapp, had been working since November on long-term budget solutions due to the national economic crisis that has the city facing severely slumping revenues while spending continues to increase, especially in personnel and benefits costs.

"Nothing was sacrosanct," Webster said while discussing the 74-page report.

Budget discussions and problems happen every year in some form or another.
Rather than repeating previous ideas and suggestions again, here's a list of my previous blogs addressing budgets:
[The 6 blogs most applicable are shown in bold]

California: Terminal or Just Normal? [Budgets, Government, Politics, Taxes] 5/20/09

Whatcom County Budget Deficit: Surprise? [Budgets] 4/30/09

Thinking Globally, Acting Locally: Part I [Budgets, Taxes] 3/2/09
Beggars Banquet: A Lesson for Bellingham? [Budgets] 11/23/08

Taxes: A Parallel Universe? [Budgets, Taxes] 11/22/08
Property Taxes: Bellingham's Dilemma [Budgets, Taxes] 11/10/08

On Gaps & Gundecking [Budgets, Government] 7/31/08

Sustainability & Buddhist [Economics Buddhist, Budgets] 1/2/08
On City Finances & Direction [Budgets, Government] 12/29/07

B&O Tax News: The Missing Headline [Budgets, Taxes] 12/1/07
Municipal Budgeting: Care & Feeding of the Fiscal ... [Budgets, Taxes] 11/18/07
City Council: New Tools for 2008 & Beyond [Budgets, PlanningGrowth, Sunshine] 11/5/07

IT'S BUDGET TIME AGAIN! -A $200 Million Exercise [Budgets] 10/7/07

Budgets 101: An Introduction to the Public Purse [Budgets] 9/22/07

Follow the Money! [Budgets] 9/19/07 

Public Trust or Public Trough? [Budgets, Taxes] 9/1/07