CINCINNATI – Living up to his campaign promise, Mayor John Cranley proposed a structurally balanced budget for fiscal year 2015 on Wednesday that emphasizes public safety and basic services without cutting jobs or increasing taxes.
While providing for police and fire, Cranley said the budget also includes more money than ever before for road and pothole repairs, a 1.5 percent raise for certain union employees, and investments in neighborhoods and what he called the city's "entrepreneurial culture."
"We're not relying on one-time sources of money to balance the budget this year, as had become all too common," the newly elected mayor said.
RELATED: Read Cranley's budget message and summary by clicking here or scrolling to the end of the story.
Instead, Cranley proposed an average 4.4 percent cut across city departments along with new fees to help make up a projected $21 million deficit in the operating fund. He said some departments have already found ways to make up for the lost funding.
The budget also calls for saving $7.1 million by reducing the city's contribution to its retirement system while maintaining the city's commitment to fully fund the system within 30 years.
"We're getting our fiscal house in order with no gimmicks and no one-time revenue streams," the mayor said, citing last year's bid to sell the city's parking meters to a private company for upfront cash, taking a settlement payment from Convergys in 2012 and borrowing from the Workmen's Compensation Fund in 2011.
Importantly, achieving structural balance in the general fund fulfills commitments the city made to bond rating agencies.
Last year, Moody's Investor Services downgraded the city's rating and warned the administration of future downgrades unless the city dealt with its budget problems, Cranley said. The city recently presented the 2015 budget to S&P and Moody's, which changed the city's outlook from "negative" to "stable."
Cranley expressed hope that council amendments would preserve the budget balance, which would give the city its first balanced budget in a decade.
Cranley dismissed the possibility of layoffs, saying he was burying the "annual threat to city workers" from past administrations. Cranley said this budget finally gives city workers the support they deserve.
The city said cutting its retirement system contribution from 22 percent to 14 percent falls within the consent decree city council approved in March. The 14 percent contribution rate is comparable with the Ohio Public Employees Retirement System (OPERS), the city said
"The City is committed to achieving a transfer of up to $100 million from the Cincinnati Retirement System (CRS) health care trust to the pension trust, in addition to contributing a sustainable 14% employer contribution to CRS," the city said in a release.
"These actions, and others within the parameters of the approved ordinance, could eliminate the $829 million unfunded liability and fully fund the system within 30 years."
Other plans to close the operating fund deficit include:
> Issuing more parking tickets to raise an additional $2 million;
> Not filling 40 vacant or unfunded positions, for savings of $2.6 million;
> Increasing fees for building permits, special event permits, safety inspections and new security alarm registrations, for new revenue of $800,000;
> Moving $3 million from the operating budget to the capital budget to pay for Focus 52 neighborhood projects.
The city plans to raise water rates starting Jan. 1, 2015. The rate hike will cost the average Cincinnati residential household an additional $4.17 per quarter, the city says.
The budget provides for:
> $15 million to rehabilitate 100 miles of city streets;
> $5.9 million for a new police recruit class and lateral transfer class as well as overtime funding that will be used to boost patrols in hotspot areas;
> $1 million for police in-car cameras and Tasers;
> $3.6 million to purchase fleet vehicles such as police, fire and garbage trucks;
> $2.6 million to pay for reopening two city pools in Mount Auburn and Spring Grove Village, keeping other city pools open, and enhancements at Smale Riverfront Park;
> $2.4 million for the Human Services Policy, which funds programs such as the United Way, Cincinnati Human Relations Commission and the Center for Closing the Health Gap.
In addition, fire department grants will largely pay for a 50-member recruit class that will be fully deployed in FY2015 and reduce brownouts.
Cranley said he wanted to give raises to city workers who had been promised them last year under the failed parking deal. Those are members of CODE (Cincinnati Organized and Dedicated Employees) and AFSCME (American Federation of State, County and Municipal Employees).
"I didn't like that deal," Cranley said, "but the workers who got us through this brutal winter and are still dealing with its fallout should get what they bargained for."
The total $1.3 billion budget includes
a $990 million operating budget and a $339 million capital budget. The city originally projected estimated revenue of $355.4 million and expenditures of $376.5 million.
Cranley unveiled the budget at a news conference at Cincinnati Police District 1 headquarters in the West End.
Although Cranley approves of City Manager Scott Stiles' recommendations, he has a few amendments he hopes council will adopt.
For one thing, the mayor wants an additional $279,100 for pothole repair, as needed. He said that would fix an additional 8,000 potholes.
Cranley also wants to create a special poverty combat program aimed toward children and to restore funding to numerous organizations such as the Film Commission, African-American Chamber of Commerce and REDI.
On the other hand, Cranley moved to cut proposed funding for solar trash compactors ($154,100) and the Lunken Airport Customs House ($125,000).
He also wants to eliminate funding for the St. Patrick's Day Parade, which would save $7,350.
Cranley said cutting out the parade is in accordance with council member Chris Seelbach's motion that outside agencies abide by the city's non-discrimination policy. The parade has barred the Gay, Lesbian & Straight Education Network of Greater Cincinnati from participating the past two years.
RELATED: Read Cranley's budget motion
City council members got their first look at the budget Wednesday morning.
Council member Kevin Flynn said the things that were most important to him - a structurally balanced budget and law enforcement preservation - were covered. But he believes council will have to dig a little deeper before approving the budget as is.
"The information that I've been getting from the departments as we've been getting presentations, there's still more that can be done," Flynn said. "It would be great to actually produce a surplus budget."
Three public hearings are scheduled for 6 p.m. on:
> Wednesday, May 21 – Cincinnati/Hamilton Co. Community Action Agency, 1740 Langdon Farm Road, Bond Hill;
> Wednesday, May 28 – Oakley Recreation Center, 3882 Paxton Ave., Oakley;
> Tuesday, June 3 – Midway Elementary School, 3156 Glenmore Ave., Westwood;
Council is tentatively set to vote on Wednesday, June 4, during its regular 2 p.m. meeting
The budget must be passed by June 30 to take effect July 1.