Tuesday, February 1, 2011

Council receives 2011 Mayor's Estimate Budget

Cleveland City Council received today, Mayor Frank G. Jackson’s Estimated Budget for 2011.

The submittal represents a general fund budget of $512 million and a total citywide budget of $1.29 billion.

2011 Revenue is projected at $505.9 million for the General Fund with projected expenses of $512.3 million.  A $6.4 million funding gap is proposed to be filled by a carry-over of the same amount from 2010.

See the complete file embedded above or download the complete file (22.2 MB pdf) here.

The budget takes into consideration the State of Ohio’s projected $8 billion or more budget deficit and measures that are expected to occur including a likely cut in the local government funding that the State provides and the loss of $5 million or more in Estate Taxes.  The Mayor estimates a potential shortfall of revenue in the amount of  $28 million.

The following measures are being recommended by Mayor Jackson to deal with the anticipated deficit: no cost of living increases for  2011; continuation of the current hiring freeze (began in 2006) of non-essential positions; elimination of most currently vacant positions; use of one-time revenue of $12 million from the sale of the convention center for the Medical Mart project; and a $3.7 million bed tax the City anticipates receiving annually as a result of the Medical Mart agreement.

Some of the measures taken in 2010 to deal with a budget of $498.5 million included: a 3.85% net pay reduction for non-union employees – this included Council; pay reductions or concessions from 23 out of 34 bargaining units; and, elimination for the year of longevity pay increases.

In addition to the continuing poor economy and shortfalls in State related funding there is also a serious risk of the Community Development Block Grant (CDBG) and other federal funds being cut and lower anticipated revenues to the City from Property Taxes, Waste Collections and other grants.

The Mayor’s estimated budget relies on the following initiatives to help close the anticipated budget gap:  one-time revenues from the sale of property; costs savings due to restructuring Operations Clusters that merged the Departments of Public Service and Parks, Recreation & Properties; savings through employee attrition; continued energy reduction attributed to operation efficiency efforts; and, increased revenue that is anticipated from the results of a new fee study.

Total staffing for the City is estimated at 5,132.  This is compared to a high over the past 7-years of 5,317 in 2004 and a low of 4,854 for 2010 (un-audited), or a 5.7% increase over last year.

The General Fund budget of $512.3 million is being estimated at a 2.8% increase over last year’s amount of $498.4 million.

A quick look at the largest budget line item category – Public Safety at 59% of the estimated expenditures - shows a staffing amount of 3,267, or a 5.6% increase over last year’s number of 3,093 (aun-audited).  There are proposed increases in the number of staff in uniform and civilian police, uniform fire, EMS and Correction staff.

The City’s Rainy Day Reserve Fund was tapped for $7.5 million for the 2010 budget.  The City waits until as late in the year as possible to transfer these funds and the authorized allocation was not utilized for 2010.  The 2011 proposed budget again utilizes $7.5 million to assist with the gap in revenues to expenditures, which will bring the fund balance down to $1 million.

Council will begin hearing on the budget beginning February 22nd through March 4th.  Hearings regarding the budget for CDBG funding are being held from February 15th through the 17th.

I’ll be posting more regarding the 2011 budgets including links to more of the budget details.  Prior year budget information can be found at the Finance Department’s website here.

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