Why hasn't the city brought budget options to City Council in the form of smaller (or no) increases in recent years?
We actually do that, (but) we’ve done this differently over the years. In some years I’ve presented different budget scenarios.
Really, during the recession there was no point in presenting scenarios, because we just maintained levels of service with very few other enhancements.
I’ve brought council budget scenario A, B and C. All of those budgets, except in the heart of the recession, we not only didn’t raise taxes, but we made significant cuts.
(We) froze wages, worked with labor unions on a contract holiday, took $2 million out of the budget, (but) those cuts don’t tend to be sustainable.
We’re in a much different budget situation today than we were. We finally got over the hill and we got about half the new taxable value this year, so for the foreseeable future we’ve got two things going for us:
One is, for fiscal year 2019, we will hit our cash reserve goal, so we’ve been building that cash reserve every year and there are a lot of really good reasons to do that. Not just to have a rainy day fund, but it goes to our credit when we bond. Having that cash balance frees up other general fund money for other work.
(Second:) Having the additional tax value, we’re anticipating being able to maintain levels of service over the next several years, at least, with really minimal tax increases, if any at all.
This isn’t always predictable. What I always maintain is, if I’m given a choice between reducing the level of service — when I hear from constituents that they want more service — or appropriately increasing taxes to maintain that level of service, I’m going to give you the bad news. We have to make this collective investment.
The flip side of that is true as well, though. When we’re doing well, by virtue of all of the hard work that everyone has done, public and private sector, to grow the base, there are benefits of that to the community. We’re on the flip side of that now. Now we get to reap the rewards of doing everything we did to make sure we’re a place where people want to invest, where people want to work, play, live, learn.
Has the city gone about the budget process in different ways? Such as starting at zero and building up a budget?
The city has done what’s called zero-based budgeting and in effect that’s where we start every year.
We begin with what’s called the baseline and that is, what do we need to maintain levels of service today, and we move from there. What do we know is going to happen? We know we’re going to have contractual wage increases, we know we’re going to have additional expenses in energy, materials, etc.
So we really start from that baseline, we make some assumptions about those ongoing costs that are simply a cost of doing business, and then we look at enhancements beyond that.
Zero-based budgeting — it’s not a process you engage in every year because it doesn’t pay any dividend and in fact, once you’ve done it and done it pretty well, that baseline should carry you through.
I hear folks talk about zero-based budgeting, but the fact of the matter is we’ve done it and we’ve reaped the rewards of having done it and now we’re moving forward with this baseline.
What about an external audit to find unnecessary spending?
We are statutorily required to go through an extensive audit every year and that produces our consolidated financial report. That’s an independent audit conducted by an accounting firm.
We do what are called “desk audits” in some departments, particularly when we look at reorganization, so that we can understand if there are savings to be had. And department heads are actually really good at figuring out ways to save money. We have a remarkably conscientious group of folks who look at expenses hard as part of the budgeting process because it’s in their best interests to do that.
We haven’t brought in anyone to do a soup-to-nuts review of all operations because I don’t think it would pay dividends and it would be extremely expensive.