The last two evenings we had each of the departments come before the Board of Estimates, with all alders invited and all city committees cancelled/rescheduled so that we could attend. Here’s some items of interest for you.
WHO ATTENDED
Here’s a folks who attended for at least a portion of the time.
Monday: Palm, Bruer, Verveer, Rhodes-Conway, Rummel, Judge, Konkel, Clausius, Clear, Skidmore
Tuesday: Bruer, Verveer, Rhodes-Conway, Schumacher, Rummel, Konkel, Clausius, Sanborn, Clear
BACKGROUND
Items in the capital budget are items that last more than 10 years and cost a substantial amount of money. Kind of. That’s the general rule of thumb and there are often debates over where items belong. The big difference is that we can borrow money unlimited in the Captial Budget. However, in the Operating Budget, the state restricts the amount of spending we can through levy limits and the expenditure restraint program.
HISTORY OF BORROWING
Here’s the total amounts of budgeted borrowing (as opposed to the full amount of the budget) followed by the amount we actually borrowed, over the last few years.
2000 $25,102,103 $25,000,000
2001 $25,551,221 $23,245,000
2002 $26,711,215 $25,000,000
2003 $32,508,885 $30,975,000
2004 $33,565,259 $33,310,000
2005 $48,306,732 $41,710,000
2006 $56,255,359 $29,985,000
2007 $82,282,541 $44,850,000
2008 $92,705,602 $57,289,753
2009 $83,587,514
Can you see the explosion in borrowing? This is why we fought so hard to cut projects out of the Capital Budget last year and then we were criticized for not investing the future.
The problem with all this borrowing is that the interest payments come out of the Operating Budget. One of the reasons this is the WORST BUDGET YEAR EVER (cue the boy who called wolf) is that we have borrowing that is getting out of control.
Also, you might want to note that we are not actually borrowing as much as we authorize. Part of that is that we are doing alot of reauthoizations (see below) and playing some silly games like putting an $11M State St. Ramp in the budget when we all know it isn’t going to happen. (And, it didn’t!)
REAUTHORIZATIONS
Beyond the dramatic increase in budgeting for these projects, we are also seeing an unprecedented amount of requests for reauthorizations for projects that were budgeted for but that we didn’t get to so we have to reauthorize the borrowing.
Here’s the amount of reauthorizations according to the comptroller.
Up until 2005 we didn’t have these in the budget or the amounts were insignificant.
2006 $4,859,600
2007 $23,571,000
2008 $25,879,293
2009 $26,474,872
Funny thing about the reauthorizations. Some of the projects we tried to cut from the budget, didn’t get done! 🙂 The “One Stop Shop” has been delayed because we are looking at selling the building, which was my point at the time.
THE FUTURE
Every year the Comptroller gives us a chart that shows that in the next five years the ratio of money we spend on debt in relation to the expenditures from the General Fund. That number is supposed to be around 12%. We have been between 10% and 13% since 1992. With the projected projects in our budget (we forcast the projects for the next 5 years), we will be up to 17%. i.e. Not good.
Tomorrow, I hope to give you the highlights department by department.
