People were supposed to talk about their priorities, of course they didn’t, they never do. Instead, this is a briefing by the comptroller and the Mayor’s dog and pony show. Several awkward/amusing moments here and some surprising honesty . . . [comments in purple]
Who showed up: Rhodes-Conway, Clear, Schmidt, King, Verveer, Maniaci, Skidmore, Bidar-Sielaff, Eagon, Bruer, Compton, Cnare, Solomon, Clausius
Who didn’t: Sanborn, Kerr, Palm, Pham-Remmele, Rummel, Schumacher
COUNCIL PRESIDENT INTRODUCTION
Bruer urges them to ask questions early and often “so they can see where the concerns are”. Says comptrollers and department heads are cooperative. If asking general questions send it out to everyone. Says again, he’d like to know where their interests lie.
MAYOR’S LATE – COMPTROLLER DOES HIS BRIEFING ONT THIS YEAR’S NUMBERS
Mayor not here so Brasser says his presentation was supposed to follow the Mayor. Brasser talks about same issues as BOE last meeting [so this is just a bullet point summary]. His written report was handed out and emailed to the alders [but not attached in legistar for the public.]
COMPTROLLER ON REVENUES
– Property taxes are very stable
– PILOT $368,000 above what was expected
– Room tax $609,000 drop, $1.1M short this year
– Building Permits – doesn’t look like trends will change – $700,000 short
– Fines and Forfietures – $200,000 over what was predicted
– Investment income is biggest issue. $6M a few years ago, current was $4M yet predicting closer to $2.2M.
– Ambulance Fees – insurance and low income exemptions should have covered it. But number of ambulance conveyances is down, medicare and medicaid billing have changes and reimbursed less.
– State recycling aid $111,000 less than expected
– TIF District closing $508,000 more than budgeted.
– Total – $4M under budget on revenue side.
[Compton makes some snarky comment no one seems to understand. She’s on a roll with the side comments today, see the Housing Diversity Committee recap]
COMPTROLLERS ON EXPENDITURES
– Increased expenses in Unemployment Comp for seasonal employees. Payment increased because paying for longer – $100,000 more in expenses.
– Police might come in on budget and have no additional overtime requests this year.
– Clerk’s Office saved $95,000 in elections costs.
– City Channel will be $30,000 over budget, $10,000 less in PEG fees
– Streets – recycling isn’t paying as well. $1.25M short.
– State tipping fees are going to cost us $160,000 more than expected
– Community Services may be $200,000 over budget to help with childcare costs
– They have $908,000 in contingent reserves to cover overruns.
2009 BUDGET BOTTOM LINE – COMPTROLLER
Expenses are about $500,000 over, and revenues are $4M short, so they are over $4.5M. Comptroller says that they have effective expenditure control system in place. Most departments come in under budget. They don’t over hire or authorize expenditures beyond the budget, so expect to have some savings about 1.5% of the budget. They plan for this under spending and apply it to the next year’s budget and last year they took 3M, but this year, we won’t have that fund balance to apply to next year. If over budget, will adjust at the end of the year. If under in revenues, there is no budget entries. No legal or compliance problem, just impacts the fund balance.
FUND BALANCE – WHAT MANY DON’T REALIZE
Bruer asks how much is in the fund balance. Brasser says the policy is a goal of 15% of next year’s budget which would be $31M and we currently have $30M that is available. [Keep reading, we actually have $45M and insurance for major catastrophes.] Fund balance is there for catostrophic event (storms, flooding etc), its a wise policy, no technical legal requirement but it does impact the AAA bond rating.
SELF INSURED
Bruer asks about self insurance. City is a member of an insurance company. WIBIC. Municipal insurance company with 17 members, Madison, Eau Claire and 15 largest counties in the state. We have a $1.9M deductible. Risk manager and others adjust claims and do the insurance work for all the claims against the city under $1.9M per occurrence.
WATER UTILITY LOAN
Cnare asked about Water Utility Loan and attempt to adjust the debt. They are trying to get money from bank not city. She asks what the odds are of the Water Utility paying it back this year. Brasser explains that unreserved funds are what are in the general fund. $5M is a water utility loan that they haven’t been able to pay back. Fund balance would be 35M if the water utility paid us back. Cnare makes the point that that money could fill the gap. They expllain that the Public Service Commission, that sets the rates, doesn’t acknowledge the loan from the city to show that they need to raise the rates. Brasser says unlikely to be paid back this year, but it is something they are working on.
OTHER LOANS
Compton asks about other loans or judgments pending. Brasser says water utility is the largest type of that loan. We do have other receivables. Total fund balance is really $45M so $15M has restrictions and reservations. $5M water utility. There are legitimate reasons to have reserves and I think he gave examples but I must have been distracted. Brasser says we charge investment rate plus .5% when we loan the money and its good for the water utility and the city.
WALGREENS SETTLEMENT
Verveer asks what the Walgreens settlement is and the impact on the contingent reserve. No one in the rooms [except me] seems to remember, but its about $200,000 and its on the agenda for today.
ROOM TAX
Verveer also asks about rrom tax charts the Comptroller normally hands out at these briefings. Brasser didn’t have the chart. City collects 9% hotel tax, it is approximately $9M per year and gets put in a separate fund. Spend it on Monona Terrace (operating and debt service or about 5.5M per year), GMCVB gets major operating funds of 2.2M , 2M destination marketing and the rest in the event booking assistance fund. The rest $2.1M goes to general fund and we fund small activities – Rhythm & Booms, Sister City, Civic Promotion. This year we will we $800,,000 instead of a couple million.
Greater Madison Convention and Visitors Bureau has a 5 year contract and we are in our second yea. They get 20% of actual collections of room tax from the year before. This year we are $1.5M short of budgeted amount. No money to put in the general fund.
Verveer asks if this is the first year we consumed all the balance. Brasser says yes since 1995 – always had a positive balance – but balance is always $0 – $2M. this is the first year that might not happen – unless something surprisingly good happens in the 3rd quarter.
Bruer asks when debt retired on Monona Terrace. Brasser explains there are 2 loans. Debt service on both are $900,000 – $1M, one paid off in 2017 and the other 2020. But after that, that money would be free to be used for other purposes.
OVERTURE
Cnare asks if there are any Overture surprises? Not that Brasser is aware of. They submitted the budget request, changed their fiscal year and are operating with more independence than they have in the past.
Bruer asks about last remaining fire wall with Overture. Brasser explains we could be responsible for some debt of $1M in a couple years, but it is speculative at this point. Bruer asks Brasser to provide the information they usually get.
MAYOR’S HEARINGS
[Awkward moment] Mayor explains this is the same presentation as given at three public hearings. Clear makes a snarky remark about the 6 people who show up and the Mayor shows surprise and notes that actually, the attendance was quite high and about 200 people showed up. At this point, Bruer is nearly shouting down the Mayor. For some reason, he appears to not want the council to know that so many people showed up. The Mayor keeps talking and Bruer is frantic to gain control of the meeting. Not sure what this was all about, but it was odd. Bruer was clearly in control and the Mayor stopped answering Clear’s question.
MAYOR’S PRESENTATION
Bullet pointed. The Mayor rushed through this with a few explanations.
– City does alot – 438 police, 12 fire stations, 260 parks, 12.5M trips on metro, 766 miles of city streets 4.7M books in library, 63,000 tons of garbage picked up
– $1M in borrowing is $140,000 in operating funds – over 10 years as a rule of thumb.
– $1M on levy is $11 on average house
– Average cost of a home is $245,000
– Points out city is only part of the taxes, 47% schools plus county and technical college taxes are on tax bill.
– Public safety and public works and transportation are 2/3 of budget
– 68% of revenue is taxes, 16% other local revenue, 15% shared revenue and funding from state and federal government.
– Challenges this year – economy is slow, debt service is high, health insurance costs are going up, state budget is tight and city is still growing
– Housing values are growing slower – 2010 average house $,2550 decrease or 1.03%
– Last year commercial property grew and so we were ok
– Typically see 6.4% growth in housing prices
– Investment earnings are down, building permit revenue is down
– We pay $30M on health insurance, bigger than streets budget – average 10% increases per year, first year was 16%
– [Mayor justifies] Debt service is increasing – that is ok – need to catch up on things, fire station and 2 ambulances, streets were substandard, catching up
– Mayor talks about trends in shared revenue. I think he said that in 1984 we got $42M but not only get $14M and that with inflation we should be getting $53.4M if we were the same as 1984
– Property taxes used to be 43% of the revenue but not it is nearly 70%
– 18,600 new residents since 2000, 8500 new households
– We add 10 miles of street per year
– We need to think like a business, need to serve our new customers
– Taxes on average house – average increase was 4.3%
– Cost to continue is $21M
– If keep current commitments without cuts – taxes on average home (toah) would go up 11.3% – these increases are not acceptable or legal
[Awkward moment.] Although the Mayor was rushing through his presentation, he now slows down and explains. He says that some people say that the city cries wolf and that every year it is the WORST BUDGET EVER IN THE HISTORY OF THE UNIVERSE [gee, I wonder who he was talking about? 🙂 ] He [very honestly] explains that he makes assumptions in July. Those assumptions are conservative on the revenue side and high on the expenditure side. They are trying to look at what the worst case scenario is. Often it is better than they predicted. Sometimes it is harder – hes says that in his first budget they had 16% health insurance increases and $2M less in shared rev. Makes sense to be conservative, that’s why that happens.
[Again, very honestly] e explains that he is trying to come up with a budget that is politically acceptable to all of us. He points out the levy limit is 8.25%
– $11.6M in cuts which is where 6% budget instructions came from. It’s 6.3% including fire and police.
– He asks them to come up with budgets that were cost to continue and also ideas to cut up to 6%
– He says these cuts are more than half streets budget, 75% parks, 140 cops or 125 firefighter but they won’t do any of those things.
– He says his goals are to protect public safety – no new officers this year but they will get promotions. They are opening fire station 12. There will be no layoffs. They are maintaining a commitment to the 8th ambulance. They will maintain basic services. He talks about report a problem & resident satisfaction survey. He talks about the need for service improvements and the Neighborhood Indicators project. The mayor’s slide says the updates will be this summer but he was informed by his staff it won’t be for another month.. He also talks about 311 and how expensive, but necessary it is. Says it will help the 911 center. The mayor makes sure to point out that he 311 idea and the Neighborhood Indicators project were Bruer’s ideas.
– He skips over his budget instructions.
– Says Capital budget will be out today. Tells alders if they had a request, they should know if it is in there. Talks about library and Edgewater which have already been reported in the press. He says these are big decisions and there is a public hearing at the next council meeting.
– He over budget schedule quickly.
FURLOUGHS
Compton asks what a furlough would save the city. Mayor says that Chicago is going to save $8M but are in debt $300,000 in furloughs and that the disruption of services isn’t worth it. He says it is not off the table, but there are complications that make it unlikely. He explains police select shifts a year in advance, that we need to staff fire stations and pick up garbage every week. He says there are also equity issues. He says they are looking at hiring freezes instead and have cut travel. he says they did good negotiating with fire, they agreed to no increases in 2010 and 2011 – hopes other unions follow. [The real question is, what did Fire get in exchange?]
POLICE DEPARTMENT
King asks if police are off the table, don’t other departments have to cut more than 6%. Mayor points out [holy crap! He sounds like me!] that there are other areas in the police department budget beyond personnel that could be cut. The Mayor also says that there are other smaller cuts and revenue possibilities that can help make up for the fact that police and fire don’t have to cut 6%.
MAYOR’S BROWN BAG LUNCHES/APPEAL TO ALDERS
Mayor says they have two brown bag lunches and he hopes they can make one. [Radical shift in message!] The mayor asks the alders to let him know what they want and what their concerns are. He wants them to just pick up the phone and call him or email him. He emphasized he wanted to keep the lines of communication open and work with them this year. He says he’d love to work it all out and introduce a budget where there aren’t any amendments. [:) I bet he’d love that! 🙂 All he has to do is listen to others and work with them.]
COMPTROLLERS OFFICE
They explained the process with their office and for the council and explained that while the Mayor’s budget is confidential until it comes out, the same thing applies to their amendments as well. They seemed to really hammer on that concept.
They encouraged all alders to come to the Board of Estimates hearings. They will have seats for everyone. There should be no other committee meetings those nights. Agencies don’t make a presentation – alders ask questions.
They explained that amendments could be made at Board of Estimates and council leadership (Bruer and Clear) really tried to convince alders to do that. [At this point, it is becoming very clear that the Mayor and leadership do not want people making amendments at the Council meeting if at all possible, they want to work it all out ahead of time.
[This is where is starts getting wierd. New alders start asking questions about what is “on or off the table”. If they add something do they need to cut something? What are they supposed to look at (or not look at) when looking at budgets from prior years? I presume that question was about my amendments to make cuts based on history of over budgeting. And what is considered policy that should not be in the budget. It seems that they have taken some of the political grandstanding from past years to be gospel and were initally intending to follow it.]
At this point, many alders have left. Only Cnare, Clear, Schmidt, King, Bruer, Verveer, Maniaci, Clausius and Eagon are left.
Clear says they will try to have alder buddies for the budget.
They reiterate nothing is off the table. That this is an executive budget process, and that it takes a majority of the council to make changes. they talk about some things that they can’t change during the budget like union contracts and other contracts. Paying personnel costs like pay steps and longevity pay.
Compton and Clausius leave.
Bruer lectures them on aldermanic courtesy. Says if you are cutting area an alder has an interest in, talk to them. Especially if it is in their districts. [He seems to be continuing to encourage everything getting worked otu behind the scenes.]
Bruer continues babbling, reminds them of negative quorum issues – but no one at the table can explain what it means. He urges people not to get into the typical battles of the last few years of mass transit vs infrasturtuce or police vs community services. He hopes the budget won’t end up toxic and urges them to use the process. He keeps talking and talking. The last 25 minutes of the meeting were kinda useless as you could see by all the alders that left.
