Metro budget calls for layoffs

Revenues, down $27M, see first decline in years By Michael Cass • THE TENNESSEAN • May 2, 2009 Metro government would lay off at least 100 employees and reduce many departments' spending by 10 percent to deal with an unprecedented $27 million decline in revenues under the budget Mayor Karl Dean proposed Friday. Essential city services would be preserved, though the downtown library would be closed on Mondays, and no facilities would shut down permanently, officials said. Metro's revenues have increased every year in recent memory. Even in the current fiscal year, when many departments took hits, the overall budget grew slightly. Steep declines in sales tax revenue over the past year, however, will force the city to cut its budget by 2.24 percent in 2009-10, Finance Director Rich Riebeling told the Metro Council on Friday morning. Dean said last week that he wouldn't ask for a property tax increase for the fiscal year starting July 1. "This government will have significantly less money to operate on," Riebeling said. Councilman Erik Cole said the drop from about $1.57 billion to $1.542 billion is "unprecedented," though not unexpected during a recession. "There was no way it was going to be pretty," said Cole, who was chairman of the council's Budget and Finance Committee a year ago. "Usually, we would be looking at increased revenue. The first time you have to reduce it, it's dramatic." Riebeling said the city also needs to come up with about $10 million to pay for unavoidable increases in fixed costs, like health insurance and utilities. That makes the financial hole even deeper. To find the needed savings, Dean is recommending that the city make several substantial cuts, including laying off 100 to 125 employees and eliminating 160 to 180 vacant positions across Metro government. Riebeling said the administration considered furloughs and other scenarios that would affect more workers' hours, but it decided instead to try to minimize layoffs and postpone employee raises. The city also would suspendlongevity bonuses and perfect attendance bonuses for a year. Councilman Jerry Maynard said he disagreed with the administration's strategy. "My No. 1 priority is to protect Metro employees," Maynard said. "These are families we're talking about. If it's the wrong time to raise property taxes, it's the wrong time to lay people off." The Fraternal Order of Police also responded sharply, saying in a news release that it was stunned by Dean's plan to save $7.5 million by suspending longevity pay and increment raises, which some employees regularly receive as they move through a pay grade. "We knew this was a tight budget year," said Sgt. Robert Weaver, the FOP's Nashville president. "We also thought open, concrete dialogue could take place with the employee representative groups, and that did not happen." Riebeling said the police department would not lose any sworn officers as part of a $1.15 million cut, which amounts to less than 1 percent of its budget. Travel to be reduced Under the proposal, Metro also would reduce its 4,000-vehicle fleet by 10 percent or more and use fuel-hedging agreements to lock in gas prices at less than $2 a gallon for 24 months. "We've got too many vehicles," Riebeling said. Dean also is recommending that departments reduce travel expenses greatly. Their budgets would have no money for conference registrations or tuition, out-of-town travel or air fare. Deputy Finance Director Gene Nolan would serve as the government's "travel czar," reviewing any requests for travel a department believes to be essential. Riebeling said the public wouldn't see many reductions in direct services. However, the Nashville Public Library on Church Street would close every Monday, its least used day, library spokeswoman Deanna Larson said. The five area libraries — Bordeaux, Edmondson Pike, Green Hills, Hermitage and Madison — would open 30 minutes later Monday through Thursday and an hour later on Saturdays, Larson said. Smaller branch libraries would not be affected. Also, some community centers at Metro parks wouldn't open in the mornings, when their traffic is light, and the grass at some parks wouldn't be mowed as often. Metro Public Works would drop three maintenance crews. The Metro Hospital Authority, which runs Nashville General Hospital at Meharry and two other facilities, would see its operating subsidy cut by 10 percent, or $4.7 million. But Riebeling said a couple of proposed changes would spare the facility from any impact to its clinics or other services. Dean plans to ask the council to forgive a $32 million line of credit from Metro to the hospital authority, which would save more than $600,000 a year on interest payments. Even so, the Hospital Authority said it would be left with a $2 million deficit. "We are now in the process of reviewing our options," the authority said in a statement released Friday. The administration also plans to shift $885,000 in hospital security costs to the Davidson County Sheriff's Office, which will start guarding the facilities. The news wasn't bad for everyone Friday. The administration said the city should give the Metro Transit Authority a $2.3 million increase so it can maintain current services. MTA also would start a bus rapid transit line on Gallatin Road and a downtown circulator bus, which might be free to riders. Riebeling said it's important to preserve mass transit at a time when more people are using it and the city is encouraging it for economic and environmental reasons. "It's important not to go backwards," he said. School budget funded The mayor also proposed fully funding Metro Nashville Public Schools' $620.7 million budget request. That would keep the school district's funding at the current year's level, though it also could be seen as a cut, since district officials say they would need an extra $15 million to keep up with increased costs like employee benefits and implementation of a controversial rezoning plan. The school district plans to cut 209 jobs to achieve that savings. And getting to $620.7 million would require moving some money from debt service accounts into the district's operating budget. Still, finance chief Chris Henson said he wasn't complaining after the mayor recommended giving the school board everything it asked for. "How can you not be pleased?" he said. Riebeling also said the city needs to know more about the school district's plans for using millions of dollars of federal stimulus money and moving 225 employees out of the central office. The council will start holding departmental budget hearings the week of May 11.