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Pueblo’s Budget Situation & Some Possible Solutions

Pueblo’s Budget Situation & Some Possible Solutions. Dan Doonan Labor Economist Town Hall Meeting March 6, 2010. Proposed Furlough Savings. We are told savings would be: $140,000 per month, or $1,680,000 per year. FY2008 Audited Results (In Millions). Revenues - $62.5

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Pueblo’s Budget Situation & Some Possible Solutions

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  1. Pueblo’s Budget Situation & Some Possible Solutions Dan Doonan Labor Economist Town Hall Meeting March 6, 2010

  2. Proposed Furlough Savings • We are told savings would be: • $140,000 per month, or • $1,680,000 per year

  3. FY2008 Audited Results(In Millions) Revenues - $62.5 Expenditures - 57.7 Operating Surplus - $ 4.8 Transfers - (12.9) Surplus - $(8.1) Reserves - $ 4.8 Reserves as % of Rev’s - 7.8% Transfers: - Capital Projects-$9.7 - Road and Bridge-$1.8 - Non-Major Gov-$1.7

  4. FY2010 Budget (In Millions) Revenues - $67.8* Expenditures - 76.2** Operating Surplus - $ (8.4) Reserves (End of Year) - $ 3.8 Reserves as % of Rev’s - 5.6% * Revenues include $4.5m in borrowing ** Expenditures include $5.2m in economic development ($4.1m subsidy to locate a plant in county), and $5m increase in ‘Other Admin.’ (transfers to capital proj. & Road & Bridge)

  5. Economic Development • $5.2 mil allocated to economic development • Looks like $4.1 mil to attract new plant • 450 Jobs promised • Unclear if that number is assured • Subsidy is about $9,100 per job, if all jobs materialize • Will help generate taxes, which will eventually repay the subsidy • May be a good deal long-term, if jobs remain and promises are fulfilled • Doubles 2010 budget deficit, though

  6. Capital Expenditures • Courthouse being built? • $6.8 mil in unanticipated clean-up costs at new site! • That’s 4 years worth of furloughs… • Health Services building recently built (or being built?) • Other Admin budget category up $5 mil in 2010, includes: • $3.9 mil transfer to Road & Bridget ($1.1 mil last year) • $4.5 mil transfer to Capital Projects ($0.9 mil last year) • These two account for $6.4 mil increase in Gen. Fund • Were these the right decisions? Was timing bad? What are options now?

  7. Desert Hawk Golf Course • Course lost $585,000 in 2008, $506,247 in 2007 • Course owes at least $5 million to General Fund • 2010 Budget transfers $253,000 more to course, and it will still lose $137,000 (after transfer) • Total 2010 expected loss of $390,000 • Subsidy of $17 per 18 holes (≈ 23,000 rounds/yr), ‘08 worse • Could present an opportunity: • Gov entities can have ‘Enterprise’ status -- TABOR exempt • Not clear course can produce income – Poor fundamentals or poor pricing? Losses have been piling up • Question of priorities…

  8. Debt payments to Drop • Long-term debt payments over next few years -- from 2008 CAFR: • 2010: $2.0M • 2011: $1.5M • 2012: $1.1M • 2013: $1.1M • Drop likely due to: • 1999 Gen Obligation Bond being repaid in 2010 and • 2006 Gen Obligation Bond being repaid mid-2011 • Frees up some cash over next few years versus baseline

  9. Revenue Options • When constitutional limitations resume, revenue options limited – but some exist • User Fees can be increased at discretion of Board of Commissioners, worth comparing impact of increased fees to cuts in public services: • Charges for use of Court (Gen Fund subsidized) • Recreational fees (Gen Fund subsidized) • Highway use charges (Road & Bridge Gen Fund subsidized) • Fire Protection (industrial blgs impose high costs) • Business related fees • Permit and license fees

  10. Other Cost Savings • Contractual services spending • Renegotiate service contracts • Cut spending levels • Bring work back in-house • Management Layers (Span-of-Control) • 8 administrators in DSS, for 300 employees – plus management staff to do day-to-day management • Non-essential capital and travel spending • Ideas from recognized employee organizations • Better deals with vendors of employee benefits • Could get better prices, win/win for budget and employees

  11. Issues With Furloughs • Shut-down days or flexible days off? • 24-hour institutions and public works • May just result in more OT • Case Workers (workload will not drop) • Federally funded employees (need to take hit too?)

  12. Alternative to Furloughs Banked Leave / Payroll Lag - CSEA/AFSCME Local 1000 • Workers continue working • Pay withheld for some work (1-day per month?) • Pay is repaid at later date (next year, 2-years?) • If separation occurs (retirement, quit) – pay is refunded at that time. Services to public continue, county gets short-term help, and employees keep most of what they deserve.

  13. Labor/Management Partnerships • This situation will pass, and TABOR will be back… • Labor/Management Committees can offer strategic way to navigate difficult circumstances in future • Find savings in useful, positive manner over time -- instead of pressure last-minute situation • Employee groups have ground-level knowledge, which is vital • Establishes communication from bottom to top • Gives workers a voice to prevent trouble, instead of responding to it

  14. Thanks for your attention… • I hope this provides some useful ideas for dialogue • I’ll be glad to take questions

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