Mobile?s Budget Shortfall Was Apparent Almost One Year?Ago
By Peter Teske
Issue #201
April 06, 2010
A fix for the city?s current $18.5 million budget shortfall must arrive before
May 1, according to Mayor Sam Jones.
While it may have been a raucous accusation made by a city of Mobile employee
last week that garnered the entire city?s concern over the current
$18.5-million budget shortfall, a floundering national economy, under-budget
city sales tax revenues and a cornucopia of other fiscally unfavorable
conditions have been mounting over the past year and they haven?t come without
warning.
A proposed fix
A police officer for the city of Mobile without a college education begins his
or her career with the salary of $29,352 a year.
The mayor?s recently proposed 10 percent across-the-board salary cut would take
that salary down $2,935 to $26,417 before healthcare costs can be taken into
consideration.
That?s considerably less money for someone who risks being shot at as part of
his or her day-to-day business.
But, whether it be money for necessities like baby formula, gasoline or even
something as extravagant as a special night out with one?s spouse, the
employees of Mobile?s Police and Fire Departments, in particular, don?t feel
city employees should be alone in bearing the burden of the city?s current
$18.5-million budget shortfall.
The sentiment could be witnessed on just a few of several signs one week ago at
the auditorium of Government Plaza.
?Save my dad?s salary,? a girl conveyed through poster board and marker.
?My wife is a Mobile police officer,? another said.
The man holding that sign attended the regularly scheduled meeting of the
Mobile City Council last Tuesday because his wife, the police officer, was on
duty and was told by superiors she couldn?t take time off to attend.
How?d we get here?
Warnings of the city?s current financial situation came as early as March and
April of 2009, according to City Finance Director Barbara Malkove.
?Evidently some people haven?t heard what I had to say,? Malkove told
councilors. ?In March, a year ago, I reported that we did an analysis for the
periods of January and February of that year and that revenues were down. And
in my letter, I said, ?I am compelled to provide a word of caution as to
current and future expenditures. We may have to restrict expenditures. The
caution is based on the city of Mobile?s and Alabama?s balanced budget
provision.??
The message for April of 2009 was similarly bleak with general fund budget
revenues down $12.6 million, Malkove continued.
?Once again I stated that we needed a balanced budget,? Malkove said. ?I
mentioned then that we would have to restrict capital funds.?
From that point on the city?s financial situation never really got better,
Malkove proceeded.
In August, sales and use taxes were under budget roughly $10 million, Malkove
noted.
?We have looked at all the budgets to squeeze as much as we could out of them,?
Malkove said. ?And that we would have the leanest 2009/2010 budget we have ever
had.?
The result of even more dreary reports from Mrs. Malkove throughout the
remainder of FY08/09 was a $235 million budget for the 2009/2010 fiscal year, a
figure pared down by $12 million from FY 2008/2009.
?When we go to November of (20)09, that was when we had adopted the budget we
considered very lean. We found out then that revenues continued to be under
budget,? Malkove said.
?I read in the paper today that you did not know we had financial problems.?
These words from Malkove were delivered from the auditorium?s podium last week
instead of her regular chair set aside low and stage left in the
administrations gallery, and directed toward the city council. But her
commentary in reference to the present-day situation was deemed ?pretty direct?
by Firefighters Association President Paul Cumbaa.
?Maybe she should have sent a stronger message earlier,? Cumbaa added.
But District 2 Councilman and Finance Committee Chair William Carroll sought to
clarify the entire last quarter of the budgeting process is based on
projections.
?So, when we voted on the budget on Sept. 22 of (20)09 for the next fiscal
year, none of the information that was needed to have an actual true account of
where we were at that time was totally available?? Carroll said.
Malkove confirmed, saying her department relied on budget projections and past
numbers.
The present
Confirming the finance department relied on estimates in response to Carroll?s
inquiry, Malkove detailed the city?s current deficit with $6.6 million in the
general fund deficits, a carryover fund shortfall of $3.7 million and an
attrition deficiency of $8.1 million.
The total shortfall, an amount of exactly $14.4 million after measures, some
yet to be voted on by the city council, are taken has, so far, been remedied
with numerous actions, according to Mayor Sam Jones.
And while Jones? official proposal calls for10 percent across-the-board salary
cuts in addition to the $3.2-million capital transfer, the administration has
already completed a15 percent operating budget cut, another round of 30 percent
departmental cuts and implemented the use of $4 million in reserve funding to
make up for remaining portions of the shortfall as well, Jones said.
Prior to those actions the mayor?s office has also already frozen non-essential
hiring, reduced overtime by 50 percent, reduced equipment purchases, travel and
training expenses and gasoline consumption.
Salary cuts, in addition to the cornucopia of actions taken to calm the city?s
fiscal status, however did not catch the support of all councilmembers who had
ideas of their own.
Garbage collection fee
?I have a play from the playbook of the 1995 administration of the city of
Mobile,? Carroll said. ?I?m going to ask the administration for immediate
consideration that there may be a possible fee placed on garbage collection.?
A six month-long, $15 monthly garbage collection fee, Carroll said, would
collect $7.9 million for the city, but since it would likely take two months to
initiate such a program, the real collections would amount to $5.2 million.
That figure would eliminate the need for salary cuts, he said.
?That is something we have done in the past,? Carroll said of the proposal,
noting the numbers he estimated hadn?t been confirmed before the meeting. ?I do
not want to see layoffs or pay cuts.?
Carroll went on to explain what it would really mean for the citizens?
pocketbooks.
?That?s less than one dollar a day,? he said of the plan that could at one
point in time have bought you a daily paper.
The mayor?s Chief of Staff Al Stokes said some problems exist with a garbage
collection fee.
?You?ve got to make sure the fee doesn?t exceed the cost of services,? Stokes
said. ?Then you?ve got to consider collection and who is going to perform that
task. But, when (Mike) Dow did it, it took 90 days.? If advancements in
technology have improved enough, Stokes noted, that timeframe may be shorter,
?but there?s still a lot of work involved.?
Under Carroll?s plan the fee would stand at roughly $15 and would come up for
reconsideration after the initial six months. If the fee can be lessened and
still help make up for future budget shortfalls in the FY 2010/2011, Carroll
said, it would continue at a possible $8 for another six months and then be
eliminated.
Other options
While Council President Reggie Copeland and District 1 Councilman Fred
Richardson expressed confidence in the idea of the garbage collection fee,
other councilmembers sought to make up some of the shortfall by further
belt-tightening.
?We need to make sure everything has been turned over,? District 7 Councilwoman
Gina Gregory said of the cost of take-home cars, travel and training funds and
other ?fat? she thinks could be trimmed.
One such project sits just across the street at the address 200 Government St.
Plans call for the building to be used as offices and facilities for municipal
court as well as other city departments, but a recently approved resolution for
roughly $554,000 in renovations could be rescinded, according to Gregory and
Carroll.
Trimming fat, District 6 Councilwoman Connie Hudson noted, could have also been
accomplished when the budget was being formulated in late 2009.
Hudson, who said she wouldn?t be in favor of a tax or salary cuts, agreed with
Gregory on the issue of halting capital projects, but also said she made it
known in September there was fault in some aspects of the budget. Hudson
pointed out one such issue was the budgeted 15 percent attrition numbers the
city was relying on heavily to balance the budget.
The city has only actualized a 9.7 percent attrition rate so far this fiscal
year, according to Budget Director Bubba Young. Each percent of attrition
equals $1.3 million, Young added.
The absolute final option, Jones warned, would be a forced layoff of roughly
300 city employees. The move would be a last resort, Jones added, because it
would increase an already-high 13 percent unemployment rate, increase spending
due to owed vacation payouts and raise the cost of healthcare and workman?s
compensation benefits for the remaining city employees.
What people are saying
Immediate reaction to Jones? salary cut proposal was less-than-favorable among
city employees in the public safety sector, but others like Paul Clark in the
Mobile Information Technology or MIT department sought to ensure if cuts did
happen, they would be distributed in an equitable manner.
?All city employees are equal,? Clark said of the potential for cuts. ?We all
deserve the same treatment.? The public safety sector, however, displayed
significant criticism.
?If you look at the city?s obligation to the fire and pension fund it?s $14
million,? said one law enforcement professional who wished to remain anonymous.
?The shortfall is $14 million. That?s no mistake. He?s (Jones) is going to run
out all the current officers and hire new ones at this lower rate. It?ll never
go back up.?
Others were more blunt in delivering their displeasure.
?I would like to suggest that this experiment of being an absentee mayor and
running the city of Mobile from a Blackberry failed,? said Bryan Lee of the
Mobile Fire Department. ?Maybe it was due to chemo brain or maybe it was a
result of a bad connection with his Blackberry, but it did not work? Mayor
Jones, it?s time for you to do the right thing. It?s time for you to resign.?
Lee?s ?chemo brain? comment famously echoed around the city over the past week.
Word on the street
When Lagniappe went out to see what the public thought about the options in
overcoming the budget shortfall, reactions seemed to favor a garbage collection
fee with certain provisions.
Clintina Pettway, a bank teller working in Midtown Mobile said she?s got
several friends and even family members who work for the city.
Although Pettway lives in Prichard and pays roughly $45 per month for her
garbage pickup, she said she?d only want to see a fee in Mobile if it were
enacted on a temporary basis.
?I just don?t want them to mismanage the funding raised,? Pettway said. ?But
I?d prefer that to layoffs and salary cuts. I know too many people who would be
hurt by that.?
Billy Radney manages a grocery store in Mobile, but lives in Fairhope. He too
pays a fee for garbage pickup that he estimated to be about $30 per month.
?It?s not popular to ask taxpayers to pay a fee, but a 10 percent cut would
lower morale and you don?t want to lower the morale of some of the most
important people in the city,? Radney said. ?Asking taxpayers for more money
isn?t easy, but it?s right. I would support it in Fairhope.?
Of the city?s current predicament and the tough decision in front of he and his
fellow councilmembers, District 1 Councilman Fred Richardson resorted to
analogies.
?Let me say this. A weatherman can predict precisely where the storm is going
to hit. But the weatherman can?t stop the storm,? Richardson said. ?And I can
guarantee when the storms comes, the weatherman? ain?t going to be nowhere
around to help you evacuate.?
Join The Discussion
1. countrygirl says:
April 08, 2010
08:29 PM
amen.
2. bluedotbama says:
April 08, 2010
11:00 AM
This also the result of financing a city budget based largely on sales tax
revenue that is extremely volatile and with the ongoing recession it makes
budgeting very difficult. Baldwin county recently had the same problem.
Consider lowering sales taxes and increasing property taxes in exchange and
create a constant flow of revenue that lacks the volatility of sales tax as a
solution now and in the future.
3. loopcannon says:
April 07, 2010
07:59 AM
I would like to point out the that the $200,000.00 discretionary fund that was
wasted on a paper mache moonpie, or the subsequent waste using the crane on
pinto island. All discretionary monies must be put back into the budget, Sam
Jones should be held accountable for the monies wasted on the "gulf coast
classic"for the past three years. All the "premiere sky boxes at Ladd-Peeples
stadium" go up for sale to private parties. I am sick of mobile being run into
the ground by the greedy senile mayor. If a police officier only makes 29 k a
year then no one in the city administration should make more than that.
I do believe that Mobile is being run like Prichard, do they share a common
accountant? How long will it be until the City won't be able to pay for it's
retiree's? Mis-management by Mayor Jones is deplorable. I believe that the way
that the city boundaries were expanded have put a continuous strain on the city
budget. If the area you expanded into, does not pay taxes such as the section 8
projects Sam Jones put into the boundaries, then why do it? Was it just for the
VOTES?
I do not believe that it was appropriate and I only see the down fall of Mobile
services. Shame on the man for not being Man enough to step down.
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