Mayor Berry Balances FY11 Budget
- Chris Ramirez, (505) 350-4833
- TJ Wilham, (505) 350-4685
For Immediate Release
April 1, 2010
Albuquerque—Mayor Richard J. Berry released the Fiscal Year 2011 budget today calling for a reduction in the cost and size of City government while avoiding furloughs or layoffs of City employees. The $455 million budget Mayor Berry is proposing in FY11 will be the smallest since FY2006.
A copy of Mayor Berry's budget overview to the City Council is attached.
Highlights of the Mayor's budget proposal are as follows:
- Permanently eliminating 162 vacant General Fund positions and proposing a delay in hiring another 88 positions saving the City $10 million.
- Funding for the pay raises scheduled for July 1, 2010 for police and fire sworn personnel are not included in the budget. These were expected to cost $9.8 million.
- An overall reduction of $10.2 million in the cost of labor. This amount equates to an average 3% wage reduction for all city employees including non-union, union, management, police and fire. This would return most employees to pay levels at or above their pay levels from nine months ago. The Mayor's proposal favors a sliding reduction scale where lower paid employees realize a smaller percentage reduction and higher paid employees realize a larger percentage reduction.
- Returning employee contributions to the cost of health, dental and vision care to 20% versus the current employee contribution rate of 17%. The employee contribution was reduced in 2004 and will now be returned to the 2004 levels. This saves $1.2 million in the General Fund.
- A savings to the City and employees of over $4 million by negotiating with health care providers to lower the proposed 15% increase in the cost of health insurance below 10%
- Directors have been tasked with creating efficiencies and finding alternatives to fund the opening of completed capital projects, saving the City $8 million.
- The Mayor's budget does not include a shift of property taxes to the general fund
- The Mayor's budget does not include any tax increases
- The budget includes a proposed $1.96 increase in trash rates for residential customers and rate changes for commercial customers depending upon the services being provided – with a few commercial customers seeing a decline in rates, but most seeing an increase
Putting it in perspective: Why salary cuts versus furloughs or layoffs?
If the 162 positions are not permanently deleted and if benefits and salaries are not reduced and police and fire continue with scheduled pay raises, an alternative to make up the shortfall would be the elimination of 600 employees. That is about 1 out of 10 City government jobs cut.
Another alternative that we looked at was furloughs versus salary reductions – however the administration did not favor this scenario for the following reasons:
- To achieve $10.2 million dollars in cost reductions we would have to furlough all non police and fire employees for 17 days – that equates to shutting down most of government for almost a month which drastically effects services to our community.
- 17 furlough days for non police and fire employees also equates to a 6.5% pay cut for these employees and it hurts the lowest paid employees the most.
- Neither of these scenarios is acceptable to Mayor Berry since both the public and non police and fire employees suffer the most.
"My intention is to avoid layoffs and furloughs if possible, while treating all employees equitably," Mayor Berry said. "I believe furloughs and layoffs would have an adverse impact to basic City services and a local economy already suffering from significant layoffs in both the private and public sectors. Currently there are over 36,000 unemployed in the Albuquerque area and I believe it is in all our best interest to avoid adding to that already historically high number."
Additional Alternatives if the $10.2 million in salary reductions are not realized:
- $10 million would be equivalent to laying off 200 employees.
- $10 million would be equivalent to closing the Animal Welfare Department including the two animal shelters, the Rio Grande Zoo, Aquarium, and Botanic Gardens permanently.
- By enacting all of the following, $10 million could be saved:
- Closing all 12 swimming pools maintained by the City of Albuquerque
- Permanently shutting down the City's 311 Citizen Call Center
- Streetlights turned off 20% of the time
- Eliminate the Downtown D-Ride
- Cancel all City sponsored events in Old Town
- Permanently close the Balloon Museum
Putting it in perspective: Why not include police and fire raises?
The Berry Administration did implement the raises for APD in January. However, with the extreme budget shortfall projections, spending the additional $9.8 million to implement the July 2010 police and fire raises as negotiated during the Chavez Administration would require deeper pay cuts for other City employees.
It is important to note, even after the proposed budget cuts, starting APD officers will still take home more money than they did at the beginning of the Berry administration and more than officers in Aurora, Colorado Springs, El Paso, Oklahoma City, Santa Fe, Las Cruces, and Salt Lake City. It is also important to note unlike officers in Denver, Oklahoma City, and Phoenix all APD officers will still have take home vehicles
Likewise, with the proposed budget AFD firefighters will still make more money than their counterparts in Salt Lake City, Colorado Springs, Oklahoma City, El Paso, Farmington, and Los Alamos. This proposed budget allows for the City to balance its budget while still providing a high level of public safety service with the same amount of fire and police officers on the streets.
"I have a great deal of respect for our police officers and firefighters and I want to keep them on the job rather than implement public safety layoffs like so many other cities have," Mayor Berry said. "I am hopeful that my administration can negotiate needed changes to these contracts in order to keep officers and firefighters on the job protecting the public."
Putting it in perspective: Why permanently delete 162 vacant positions?
Another $10 million in savings will be realized by permanently deleting 162 vacancies and delaying the filling of another 88 positions. A six month delay gives the Berry Administration flexibility in the upcoming fiscal year to adjust to a fluctuation in revenues.
"Simply taking vacancy savings for these positions rather than permanently deleting them only solves the budget problems in the short term," Mayor Berry said. "If we are going to lower the cost of government, we need to make permanent cuts in this budget."
Putting it in perspective: Why increase trash rates?
The Solid Waste Management Department is an enterprise fund, meaning fees paid by customers should pay for the entire operation of the department just like any other business. However, year after year Solid Waste has charged less than the actual cost of performing their services. The department needs to function efficiently and the current administration has and will continue to work towards insuring that these efficiencies are in place. The proposed rate increases are generally lower than originally requested by the department, but will still allow for the aging fleet of garbage trucks to be replaced and repaired and will increase funding for litter and weed removal and graffiti cleanup.
It is important to understand that the base rate increases are not being used as a budget balancing technique. They are being implemented to bring the rate structure up to the actual cost of performing this valuable service to our customers.
"Nobody, including me, likes to see any fee increases, but the fact is we need to ensure that the rate payers are receiving a good value for the fees they pay and then we need to ensure that we recoup the costs of doing business just like any other enterprise," Mayor Berry said. "We have kept the fee increases significantly lower than those originally requested by the department, but I have been assured this increase will make a meaningful difference in our ability to perform this vital service to the public."
Putting it in perspective: What other actions have the administration taken prior to asking employees to help with labor cost reductions?
- In FY10, Mayor Berry was able to reduce salaries at the highest level of City government by hiring directors, mayoral support staff, and other unclassified employees at rates less than their predecessors. That alone saved nearly $1 million that continues into FY11.
- Directors have been instructed to find alternatives to fund the opening of completed projects, saving the City $8 million. By delaying the opening of capital projects, the City will save by not needing to staff or outfit the buildings.
- Other specific funding reductions:
- Decrease GF subsidy to Transit -- $7.6M
- Reduce funding to Explora Museum -- $200,000
- Reduce funding to Balloon Museum -- $166,000
- Delay of Rescue 8 -- $429,000
- Delay Mesa del Sol Fire Station -- $1.3M
- Reduce City Lobbyists to 2 -- $112,000
- Move City staff out of Compass Bldg -- $90,000
- Reduce social service contracts -- $758,000
- Fuel adjustments -- $478,000
- Delay computer replacements -- $1.8M
"The submission of this budget to the City Council is the beginning, not the end of the budget process," Mayor Berry said. "There will be serious discussions on the budget for the next two months where there will be valuable input from many different parties and interests. I look forward to working with the City Council and labor union as we continue to face challenging times and craft workable solutions together for the benefit of the citizens we serve and all our employees."