Proposed 2012 Budget
City Manager Eliminates Deficit In Proposed 2012 Budget
No Layoffs Proposed; Programs That Encourage Job Growth Funded
Today, Cincinnati City Manager Milton Dohoney, Jr. presented his proposed 2012 budget to Mayor Mark Mallory that eliminates the once projected $33.6 million deficit with no General Fund layoffs, no closures of health clinics, parks or recreation centers, and does not eliminate the Health Department's school nurse program.
The proposed City Budget update is balanced and invests in economic development efforts to position the City for further business growth and job creation, while maintaining healthy reserve funds.
- Download: 2012 Recommended Budget Update
Citing a number of factors that have aligned including a positive carryover balance from 2011, the continued increase in income tax receipts, prudent cost cutting by departments, and reduced negative impact emanating from the state budget, Dohoney is viewing 2012 as a chance to "to calm the financial waters while we prepare for a period of sustained growth."
The Administration is presenting an all funds continuation budget totaling $1.3 billion. The portion of the budget that is used for daily operations, the General Fund, is $362.7 million and comprises 27.4% of the total budget.
The theme of Dohoney's message this year is "2012: Stabilizing Operations, Positioning for Growth." Dohoney is proposing his budget using some one-time sources as a way to provide relief in the government from the late-night budget sessions of the past few years. "
The budget processes of late have taken quite a toll on the dedicated city staff as well as the public we serve," said Dohoney. "Because it will not be necessary to take the discussion to the 11th hour focusing on how to balance the budget, it is hoped that some time can be spent on some policy debate that can offer a clearer direction on where we are going."
The following points explain the measures that close the $33.6 million General Fund gap:
- Income tax came in higher than expected in 2011 at $5.9 million. The Administration has negotiated some major economic development victories that will have a positive impact beginning early in 2012. Most notable is the Omnicare and First Financial decisions to relocate their headquarters. In addition, jobs continue to be created at The Banks as well as the casino construction site.
- Cuts from State Government were less severe than expected saving $800,000.
- Finance revised the 2011 revenue forecast by 2.9% which translates into $9.7 million.
- Departmental savings in 2011 contributed $4.5 million to the bottom line.
- The federal COPS grant of over $2 million covering the wages and benefits of 25 police officers.
- Eliminating five trash routes in Public Services through Routesmart technology beginning in March 2012, will save $1 million annually.
- Additional cuts totaling $8 million. This includes the elimination of 46 vacant positions including 26 vacant Police Officer positions, an Administrative Specialist position within the Office of Environmental Quality, and a Service Area Coordinator position within the Department of Recreation. This is necessary to continue to move towards a structurally balanced budget and prepare for 2013 and beyond.
- Negotiated contract amendment yielding $14 million. The Administration recently entered into negotiations with the Convergys Corporation, culminating in an agreement reached this month that returns millions of dollars from the original 2003 deal back to the City. These are one-time funds that can be used for general operations and the Administration is proposing using $10 million for this purpose. The company has extended its headquarters commitment to Cincinnati though 2020. If employment levels were to fall below 500 people, the City would receive an additional $5 million. This amendment is in the mutual interest of both parties. The funds will actually be in our possession by December 2011. "I want to thank the Jeff Fox, President and CEO of Convergys, for coming to a deal in the best interest of both parties," said Dohoney. "Cincinnati retains their headquarters here for an extra two years beyond the original agreement, and provides a safety net for the city should their staff levels fall below the 500 person mark."
The City Manager's proposed budget does close two pools (Filson in Mt. Auburn and Fairview) as recommended by the Cincinnati Recreation Commission in an effort to right-size the number of pools appropriate to a city our size. The Administration presented evidence this summer that Cincinnati's pool count far surpassed cities that are much larger than us.
For the first time the Administration has entered into a fuel hedging agreement and the Administration is projecting the fuel average to be $3.90 per gallon that could save over $400,000 in fuel costs. Additionally, the budget also invests in infrastructure with funding for 100-lane miles during 2012.
The Administration again proposes to move the Business Development Division of Community Development into the Office of Economic Development. This will provide more efficient and strategic customer service and create a synergy that should help further the City's deal-closing results.
The City Manager’s Budget also identifies the following:
- Community councils and neighborhood business districts will receive $5,000 to help stabilize areas throughout the community. This is up from the $2,500 funding level of 2011.
- Washington Park and Cincinnati Riverfront Park operations are funded at $450,000 and $700,000, respectively.
"I have often said that we must increase jobs in this community if we are going to become more financially sound," said Dohoney. "This budget puts some resources back into areas that will help us grow the economic pie."
This budget provides an increase for both the Cincinnati USA Regional Chamber (additional $40,000) and the Greater Cincinnati & Northern Kentucky African American Chamber of Commerce (additional $15,000). The Manager is proposing $700,000 for operations at the Port Authority in addition to $1 million in capital dollars approved last year.
Even with a thriving Port Authority, The Manager is proposing monies to make the City’s Office of Economic Development more robust to "facilitate getting more deals done." The Administration is recommending a $1 million to the Office of Economic Development to be available for retention and new growth opportunities, and an additional $1 million to support the growth of viable, small businesses in the neighborhoods.
Per the City Charter, the City Manager presents the budget to the Mayor, who has up to 15 days to comment and transmit the budget to City Council. The City must have a balanced budget passed by the end of the fiscal year, December 31.