Lansing Mayor Virg Bernero presented what he called a “lean and responsible” budget to the media Monday afternoon, a full six hours before the City Council got its first look at the budget, which would go into effect in July. The administration’s budget, masterminded by Finance Director Jerry Ambrose, closes a $5.5 million budget deficit in part by eliminating 40 vacant positions from the city’s payroll.
Shying away from the term "deficit," Bernero and Ambrose used the phrase “budget gap” to explain the difference between revenues and expenditures. Last year’s deficit was around $6 million.
That "gap" seems to have eliminated the shortfall without offering up a sacrificial lamb — unless you count open city jobs — such as the city golf course cuts last year. Bernero is sticking to not raising taxes — even though property taxes usually rise every year, without a mayor’s order— or dipping into the $10 million reserve fund.
Included in the budget is a 10 percent reduction in the recycling fee assessed to residents, down to $67 annually. The property tax rate will be reduced .13 to 15.70 mills.
The administration is also proposing a three-month delay in a scheduled 4 percent increase in sewer rates — designed to offset the Combined Sewer Overflow project — until January 2010.
During the media roundtable Monday, Bernero said the city is tightening its belt "just like families," something that doesn’t seem to square with the recent retroactive pay increases for 12 members of the administration, including City Attorney Brig Smith, Parks and Recreation Director Murdock Jemerson, Public Service Director Chad Gamble and Ambrose.
"Two percent is reasonable,” Bernero said when asked about the increases. He called the pay raises “certainly earned, and defensible.”
That may be true, but sources with knowledge of negotiations between the city and the Teamsters have contradicted that, saying the city has offered no increase for the first year, a three-figure "signing bonus" for the second year, and then pay increases below 2 percent for the last two years of the contract.
In all, 11 positions from the Finance Department, two from Human Resources, 10 from Public Service, three from Human Relations and 10 from Parks and Recreation will be eliminated. The administration proclaimed that “virtually none” of the positions were in police and fire, but when pressed, admitted that there were two vacant positions in the fire department. Ambrose stressed that those two positions are not slated for elimination.
Ambrose said there are no departments that can be pointed to as a drain on the city’s resources, but in the past the city has heavily subsidized both the Lansing Center and Oldsmobile Park, both of which fall under the Lansing Entertainment and Public Facilities Authority. In this fiscal year, the city earmarked just over $1.5 million to cover losses on both facilities. This year the city has proposed spending $1.89 million.
The administration acknowledged the "do more with less" approach to employment at City Hall would only go so far in addressing the structural deficit.
To make headway on a deficit that appears every year, Ambrose said the city would have to restructure health care and benefits for city employees.
“At some point, we can’t reduce the workforce anymore, and we’ll have to cut services,” he said.
There could also be a shakeup in the amount of departments and department heads in city government. Bernero said to "stay tuned" for possible combinations of departments and the elimination of a department head or two to put a permanent dent in the deficit.
Speculation around City Hall suggests that parks could be folded into the public service, with one source saying Jemerson is the “weak link” in Bernero’s cabinet, meaning that he isn’t a staunch backer of Bernero’s initiatives.
Ambrose and the administration haven’t provided City Council with a breakdown of the budget. Asked when that would happen by At-large Council member Brian Jeffries, Ambrose said, "We’ll talk Thursday."