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City Manager proposes $20 million in budget cuts

Wednesday, February 11, 2009 by Austin Monitor

Austin City Manager Marc Ott’s financial team, Chief Financial Officer Leslie Browder and Deputy Chief Financial Officer Greg Canally, this morning unveiled proposals to trim just over $20 million from this year’s budget in response to a decline in city revenues. After discussing those proposed cuts with the City Council today, the manager will hold a town hall meeting on Thursday, February 19 to receive public feedback. He then plans to bring back an amended proposal to the Council for further review on February 26.

 

The FY 2008-09 budget was based on a projected 3 percent increase in sales tax revenues over the previous year. However, the latest projections from the city’s Budget Office instead show a 6 percent drop in sales tax, around $15.5 million. The rest of the $20 million in lost revenue is from lower-than-expected development fees and interest.

 

The financial projections for the current fiscal year were made in the summer of 2008, before the full extent of the nation’s economic recession was apparent. The city’s financial staff began work on revising those assumptions after the national credit crisis began last fall. The original revenue prediction for the General Fund was $621 million; now it’s expected to be $600.9 million.

 

Each city department that uses money from the General Fund was asked to propose cost-cutting measures. “We had a $20 million shortfall, and we had to come up with a $20 million reduction plan,”  Canally told In Fact Daily.

 

After hearing from department heads and members of the city’s boards and commissions, the City Manager is recommending cuts of between .8 percent and 6.0 percent for all departments, except for the Austin Fire Department and Municipal Court. Since the Austin Firefighters Association did not agree to a new contract last fall, AFD is already saving money on salaries and benefits. However, Canally said that could be offset by increased overtime, and keeping costs low will be one of the top priorities for new Fire Chief Rhoda Mae Kerr.

 

The Austin Police Department is also looking at ways to address overtime. APD makes up the largest portion of the General Fund, with a budget of $238.3 million. The proposed cuts for APD total $3.7 million. While that is only 1.6 percent of the department’s budget, it is also the largest dollar amount being proposed for any of the General Fund departments. (Other departments are facing the possibility of greater percentage cuts to their budgets, but the total dollar amount is smaller.)

 

APD proposes to save money by delaying the start of the next APD cadet class from March until September. Then, most of the expenses for the class would fall in next year’s budget, and officials with the city’s Budget Office said the relatively small number of vacancies within APD would make that move feasible.

 

In other departments, the manager’s recommendations are tracking those of the city’s advisory boards and commissions. The Library Department will likely have to cut 1.9 percent from its budget, and the manager suggested saving money by having some branch libraries open earlier or later each day (an idea the Library Commission had proposed). The total proposed cuts to the Library Department amount to approximately $500,000.

 

Management is proposing a cut of $2.1 million from support services, which include attorneys and budget planners. They also plan to cut $1.9 million from the budget for information technology.

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