Last week we wrapped up the draft 2013 Operating budget and shipped it out to each City Council member for their consideration at the November 7th Council meeting.
Not much has changed in the couple of weeks since I offered some insight into the City’s budget timing dilemma (Timing is Everything Blog Post) and the draft Operating budget continues the themes of budget cuts, constraints and caution.
When I see so many good things happening in Kent as a result of the hard work of City employees it is frustrating to not be able to reward employees financially for their exceptional performance but that’s the financial reality we find ourselves in and our 2013 budget asks everyone to keep up the great work with little expectation of financial gain and less operating funds to make it happen.
A couple of the noteworthy items in the draft budget include:
– the City’s health insurance costs rose 9%
– the Operations and Maintenance budget decreased by $336,000
– the Personnel budget decreased by $85,000
– the net revenue growth for 2013 is projected at 2%
Here’s a few excerpts that offer a flavor of the City’s budget challenges:
“The 2013 proposed City budget contains the budgetary line items that the staff recommends for sustaining the levels of services for our community in 2013. We submit this budget believing that it represents the best balance between what we can afford and what Kent residents and businesses expect from their City government. ”
“In preparing the 2013 budget we’ve done our due diligence and run the numbers to produce a budget that we think will most accurately reflect the economic conditions in 2013. With nearly a decade of budget cuts and savings behind us, we can predict expenses with a reasonably high degree of certainty – but for our revenues there are more questions than answers at this point. ”
“The economic restructuring that is underway in northeast Ohio favors entrepreneurship, collaboration, and close ties between the business community and academic research and development. We’ve made these guiding principles in our budget strategy, investing in building the resource networks and physical infrastructure to leverage our assets and position Ken tfor success in the new economy. ”
“Financially we have much to be proud of in 2011-12 but unfortunately with unexpected cuts in State funding – in excess of a $600,000 total reduction in local government funds and a $200,000 annualized loss from the elimination of estate taxes beginning in 2013 and continuing in subsequent years — the gains will likely get lost in the bottom line and we are anticipating needing to use $1.4 million in undesignated fund balance to close the projected revenue gap by the end of 2012.”
“The challenge for our organization is to prepare a budget for 2013 that recognizes the current stresses felt by many of our citizens without negatively impacting the organization’s ability to serve the public now and in the future. We believe we’ve accomplished that objective through the combination of a very tightly constrained Operating budget and Capital Plan. ”
“Productivity improvements, efficiencies and cost savings remain a top priority at every level in the City organization. In 2012 we made changes in areas as small as City mowing contracts (saved $7,000) and certified mail procedures (saved $1,000) to such major initiatives as energy efficiency (saved $30,000 in the first quarter after construction) and new partnerships with area cities for equipment renting, sharing and joint purchasing. Total savings in 2012 are projected at $100,000. ”
“When the $100,000 reduction is added to the cuts and savings made over the last 6 years takes, the non-personnel savings total $2.35 million – and personnel savings at $3.5 million. ”
“Following the cuts in positions that occurred from 2005 to 2008, in 2013 the City will be operating at a staffing level (full time) that is the same as we had 14 years ago (192 employees) and the Proposed Operating Budget total for 2013 Personnel Expenses compared to the 2012 Amended Personnel Budget reflects a $85,987 decrease, or 4.46% personnel expense reduction — $19,176,659 in 2013 vs. $19,262,646 in 2012.”