Wednesday, April 4, 2012

2012-13 Budget Address.


Mayor Mark D. Boughton


Mr. President, Honorable Leaders and Members of the City Council, Madam Clerk. City Officials, Department Directors, Employees, and my fellow Danburians:

In accordance with my duties as Mayor and those prescribed by the Charter of the City of Danbury, I respectfully present the proposed budget, and the Comprehensive Capital Improvement Plan for the 2012-2013 fiscal year for the City of Danbury.

As always, I want to take a moment to thank the members of our legislative body of our city, the members of the City Council and its leadership. Our elected officials spend hours working on the City’s business in a voluntary capacity and it is much appreciated.

In the coming month, members of the City Council will be giving up their weekends and their evenings to deliberate over this body of work. For their dedication and commitment we should all be thankful.

Special thanks to our Director of Finance David St Hilaire, Assistant Director Dan Garrick, and our budget specialist Judy Baris. They have created an outstanding document that we all can be proud of.

Last year during my budget address I presented several challenges that stressed our city in terms of long term unfunded/underfunded employment benefits for our city employees  Tonight, I am pleased to report that the contracts for our city employees that were adopted by you this spring will result in unprecedented savings for our taxpayers in the coming years and have made a tremendous impact on the long term financial stability of our city..

However, in the short term, our budget still remains under intense pressure for pension contributions as well as our retiree medical costs for our current employees and retirees.

Now that we have addressed the long term post employment costs that threatened our financial stability, we have spent much of the spring addressing the short term challenges to funding our government.

Our goal over the last year is to derive efficiencies out of every area of the organization.

To help us achieve that goal, we are in the process of installing a new core system of software that will upgrade our business functions. The core system is being rolled out as we speak. By implementing this new system, we will be able to reduce duplication of services, eventually limit the amount of employees needed to run city operations and begin to align Board of Education functions and practices with the policies and procedures used in our Finance Department.


BUDGET:

The initial 2012-2013 budget requests totaled $230.3 million dollars, which is an increase of $14.4 million dollars from our current budget. After careful review and many hours of work, we have reduced the overall proposed increase from $14.4 million to $4.1 million dollars or just 1.9%.

City department spending in this budget is flat.

Savings have been found by creating greater efficiencies and by cost avoidance.

For example, we will continue to defer filing 65 positions and 29 of those positions will remain unfunded in the 2012-13 budget.

Many positions that were once full-time have been reduced to part-time or completely eliminated.

The Department of Finance Budget Team continues to meet regularly with Department Heads to discuss targeted cost saving opportunities. For example, under the City’s “Go Green” initiative, 244 devices used for copiers, desktop printers, fax machines and scanners will be replaced with 60 digital multifunctional copiers. These new devices will enable us to implement a document management system that will allow us to go paperless for most operations. Other cost saving initiatives like an employee wellness program, a new vehicle use policy, and switching our phones over to a VoIP system are ongoing.

While I recognize that these cost savings measures are modest, the reality is that they are part of a culture change that we have brought to City Hall to encourage people to do more with less, to reevaluate every aspect of what they do and why they do it, and to reward and encourage proactive approaches to our budget challenges.

This year we have also used strategies to provide a more transparent and a more direct budget which reduces the use of “one-shot” sources of revenue to balance our spending plan.

In years past, we have programmed sales of various city properties to use as revenue in the budget. In the 2012-13 budget there are no land sales or “one-shot” sources of revenue to help balance budget.

In addition, this year as well as last, we have begun reducing our reliance on fund balance to help balance the budget. This year we proposing a use of approximately $2.3 million in fund balance, down from $2.4 million in the 2011-2012 budget.

Finally, we have moved much of the expenses to that have been traditionally paid for out of our borrowing into city departments and funding them as part of our general fund expenditures rather than borrowing.

PUBLIC SAFETY:

As mentioned above new equipment and vehicles have been programmed into the individual department budgets.

Some of these are ongoing capital investments, for example, continue our AirPac replacement program and payments on new pumpers that were approved last year.

Other equipment is new. In the 2012-13 budget we have programmed new vehicles for the Police Department, and a new Ladder Truck for the Fire Department.

The  cost for a Ladder truck is over $1 million, which reflects a significant investment by the city in public safety.

My administration continues to work with Chief Herald and Chief Baker to migrate to a civilianized centralized dispatch as a first step towards a regional dispatch center.

EDUCATION:

Education spending represents the largest part of our spending plan.

While we have reined in spending on the operational dollars on the City side of the budget, and while I am recommending the elimination 29 positions and have left 64 positions vacant, I am proposing an increase to the education budget of $900,000 in direct aid and a reprogramming of $600,000 of existing revenues to provide a $1.5 million increase to the education budget.

In addition, under the Governor’s proposed education reform package, the Board of Education will have available to them approximately $2.0 million of new money that must be dedicated to school improvement.

I have been meeting extensively with Dr. Pascarella, Dr. Glass and Board of Education to work on a plan on how best to deploy the new money. While there is still many questions about what the state will accept in terms of an improvement plan, I believe that after careful analysis of the new legislation that the money will allow us to address the growing achievement gap.

My recommendation to the Superintendent and the Board of Ed is to use the new money to expand our All-Day Kindergarten program over the next several years as space becomes available.

The first phase of All-Day Kindergarten could happen as early as next year. With the allocation of approximately $400,000 from the new money from the State of Connecticut, the Danbury Public Schools could offer more All-Day Kindergarten seats next year, and expand each successive year as space allows.

All-Day Kindergarten is probably the number one request that I have heard from parents and one the top priorities in the district because of its impact on academic success.

By phasing in All-Day Kindergarten over several years and by utilizing the new dollars available from the state, we will be able to minimize the impact to our taxpayers and take a tremendous leap at closing the achievement gap in Danbury.

It may seem counter-intuitive that I recommending an expansion of All-Day Kindergarten while at the same time the Board of Education will have to make some difficult decisions about programming. But, I believe that it is critical to provide the best educational experience that we can for our children from grades K-12.

All-Day Kindergarten is about more than custodial care, it’s about academic achievement and success.

With the new dollars available, and with a lot of hard work,  All-Day Kindergarten will finally be a reality for all of Danbury’s parents - and we will take a giant leap at closing the achievement gap..

While I recognize that the money I am recommending does not meet all of the requests of the Board of Education, the proposed budget coupled with the school improvement money from the State of Connecticut represents approximately $3.5 million in new money.

Of course, we stand ready to help the Danbury Public School system navigate its way through the uncharted waters of the new education reform program and support them as they apply for the new dollars.

We also are providing a substantial amount of dollars for the schools that the public may not be aware of.  

For example,  this year we are required to add $1.8 million into the pension fund to cover Board of Education employees that participate in the General Employees Pension Fund. That’s $1.8 million that is not being used for textbooks, teachers, or equipment.

On the capital side we are continuing with the upgrades to Danbury High School by replacing the windows in the building after replacing the boilers last fall. Total investment in the infrastructure for the Danbury Public Schools  over the last year totaled a little over $13 million.

Let us also not forget the new Head Start building that we are constructing on Foster Street. Danbury is one of the few cities in the State of Connecticut that has made such a tremendous commitment to the Head Start program.

We have also authorized the expenditure of money to begin the planning for expansion of our schools consistent with the recommendations of the 2020 Task Force.

All of these expenses are rarely considered when we think of education spending, yet they impact our bottom line and are an important contribution from our taxpayers.

SEWER AND WATER:

Over the last 2.5 years, we have not raised sewer and water rates. This year I am proposing a rate increase that is modest, yet will help us pay for and plan for future capital upgrades that will be required by state and federal law.

Creating a capital fund in both enterprise funds will help us should we have a failure in one of our sewer pumps or an issue with the infrastructure of our water system. Right now, there is no capital program and no ability to pay for emergency repairs or other required capital investments should they be needed

As you will be aware, the EPA, and DEEP, is requiring 30 cities and towns across the state to perform upgrades to reduce Phosphorus to an unprecedented level. The cost of the capital investment required to meet the DEEP and EPA requirements would be catastrophic to our city and to our ratepayers. Part of the capital fund will be used to plan and execute improvements that may be required in the future.

Needless to say the City of Danbury will be actively opposing the new standards and have been lobbying the General Assembly and our federal representatives to intervene on the city’s behalf.

Even after these modest increases, the City of Danbury will still have some of the lowest sewer rates in the state, and the lowest water rate in the State of Connecticut.

BUDGET ASSUMPTIONS:

There are some key budget assumptions that I want to point out to you.

There are no “one shot” sources of revenue programmed in the budget.

All revenue assumptions are based on current economic conditions.

We are also assuming that the current proposed state budget and its municipal aid will make it through the legislative process. Should the Governor or the Legislature cut our municipal aid as part of the final state budget negotiations, we may have to revisit our spending plan-- this will mean reductions across the board that I am sure will result in layoffs and a reduction in services.

I do want to make it clear. Should we receive a cut in state aid beyond what the Governor has proposed, we will not look to our taxpayers to make up the difference.

Once, again I would like to point out to you that many communities of comparable size and demographics receive far more dollars for education from the State of Connecticut. For example:

While Danbury receives approximately $23 million in state aid for education, the City of New Britain receives almost $75 million, the City of Bristol receives $41 million in state aid for education.

It is incumbent on our state legislators to work as hard as they can to provide equity in the distribution of state education dollars.

SUMMARY:

To implement our budget, I am proposing an increase to our mill rate by  .76 mills or 22.45.

General fund expenditures are increasing just 1.9% - a remarkable feat given the economic conditions,  the increase in spending is mostly driven by the increase to the education budget, fixed costs, and pension contributions.

With exception of education spending, the philosophy of this spending plan is to cut first - revenue second.

Cut we did.. Every single department will feel the impact of our cuts. Many difficult  choices and sacrifices have been made and will continue to be made by all City departments in order to present a balanced plan of operations designed to continue essential municipal services.

Make no mistake, our city departments will have a difficult time getting through the next fiscal year.

But, we believe to make even greater cuts would be irresponsible Possibly jeopardizing public safety.

It is only after we have completed this work can we then ask for a greater contribution from our residents.

As you may recall, last month we agreed to delay the phase in this year of the last round the state mandated reevaluation.

Finally, we will continue the tax freeze for our senior citizens.

In summary, the proposed spending plan for the 2012-2013 fiscal year will be challenging and difficult for our departments as well as for our residents.

With exception of recurring expenditures, departmental spending has remained flat.

I am proposing leaving vacant 29 positions and deferring hiring for 64 vacancies.

By not funding these positions, we are avoiding the possibility of layoffs for this year.

I am proposing a modest increase in sewer and water rates to begin developing a capital fund for ongoing repairs and planning for future mandated upgrades.

I am not proposing any new fees or surcharges.

I am proposing a number of long term cost avoidance measures that I believe are visionary and forward thinking.

A combined regional dispatch that will enhance safety and lower our expenses.

Energy efficiency projects for our schools and our public buildings that will save on heating and cooling costs.

Implementing structural changes to our system of employee benefits that have been successfully negotiated..

Tonight, I ask for the for Council’s cooperation as they deliberate over this plan. While today, our finances are on firm financial footing, we must have the political courage to make the necessary structural changes to avoid the problems that other cities of similar size have faced.

Ladies and Gentlemen, I believe in Danbury. I believe in our residents, our employees, our business community,  and our faith based community.

We are blessed with so many assets. A world class Hospital, a tremendous University, a wonderful business community, a low unemployment rate,  a low crime rate, a AAA bond rating, a vibrant arts community, and a quality of life that we can all be proud of.

The current economic crisis will eventually pass, and when it does,  Danbury will emerge as a leaner, wiser, and stronger community.

Thank you for your attention and your passion in our great city.

God Bless America and God Bless the great City of Danbury.

No comments:

Post a Comment