2009 Budget: Scalpel Time

Staff takes another look at where expenses can be trimmed.

Continuing efforts to blunt the impact of reduced revenues, especially sales tax revenues that continue to lag, staff has taken a further look at where efficiencies, reductions, and deferrals can be made.

From the green sheets

In response to the reduction in revenue, the General Fund expenses were reduced by over $465,000 as follows:

  • Defer hiring of a vacant Staff Attorney during the first quarter of 2009 – The Legal Department has been operating without a staff attorney for a number of months and will be able to maintain its current service level without a staff attorney through the first quarter of 2009. The deferment will reduce expenses by $20,000.
  • Eliminate contractual building inspection services – A review of building permit inspection activity indicates that the demand for building inspection services will likely continue to decrease in 2009. The elimination of contractual building inspection services will reduce expenses by $15,000.
  • Reduction in Community Grants funding (per established formula) – Pursuant to the Municipal Code, Hotel Use Tax revenue from the previous fiscal year dictates the funding amount for the Community Grants program. The FY09 Recommended Budget (9/30 version) did not recalculate this amount based on updated year-end estimates.
  • Reduction in Pension Levies – The actuarial analysis of the Police and Fire Pension Funds has been completed. Based on the actuarial analysis, the requested pension levy is expected to decrease by $186,897 from the levy estimates presented in the original FY09 Recommended Budget. The Police Pension Board approved its requested levy. Staff anticipates the Fire Pension Board will approve its requested levy in November 2008.
  • Defer funding for leaf collection to 2010 – The Village’s waste hauling contract with ARC Disposal includes an optional leaf collection program, which would cost the Village $140,000 in 2009. The Village could forego the leaf collection program in 2009.
  • Defer funding for branding/marketing initiative or TCD3-Comprehensive Plan – Both projects were identified on the 2008-09 Strategic Plan Policy Agenda. Each program has budgeted expenses of $100,000. Therefore, the elimination of either program from the FY09 Budget would reduce expenses by $100,000.

The FY09 expenses could be further reduced by deferring both the branding/marketing initiative and TCD3-Comprehensive Plan. The elimination of both items from the FY09 budget would reduce the total budgeted expenses by $200,000 to $41,686,745.

The pension levy reductions are interesting in light of GASB45 budget implications.  DG will continue to budget pension obligations on an ongoing basis at least for now.  GASB45 implications to budget are that the OPEB (other post employment benefits) costs should more appropriately be budgeted up front instead of later.  There’s a budget crushing difference in the amounts: fully funding future obligations would be a $3 million/year expense.  By budgeting for pay as you go, that is trimmed down appreciably.  DG funds a bit over 60% of their obligations (if I’m reading the numbers right), which is better-way better-than most communities.

More than myself has had a laugh or two at the idea of sending a couple hundred thousand dollars out of the community for branding our asses village with a new logo.  Branding/marketing initiatives can be readily moved to after TDC3 and a new Comprehensive Plan.

I’ve said it before and I’ll say it again: we have qualified local people currently working to promote DG, like the EDC and the COC and Ellsworth Business Council and Downtown Management, and now the new Hospitality Group, as well as several local companies that can be brought into the process.  It’s been documented many places that every dollar spent locally has triple the impact for the local economy, so why not, when the appropriate time comes, get the local talent involved, and keep the money in DG?

Face it, once we know what we need, what we want, and what we are willing to plan for, that becomes a more appropriate time to link image to those completed planning steps.  In the meantime, all those qualified people should have a casual chat amongst themselves and with staff as to what they might synergistaically accomplish.

Update: That deferring both the branding/marketing initiative and TCD3-Comprehensive Plan?  That’s my main man Martin Tully keeping it real and keeping it focused.  The TDC3 and the Comprehensive Plan can still move forward, but the branding effort may take a back seat until later.  I’d come out publicly for it, but I’ve been chastised before for thinking out loud-ironically by Tully himself.

Nonetheless, when he’s right, he’s right…even if I agree with him.

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