City Manager plugs $26M budget hole, but admits he was a 'millimeter' away from layoffs

Posted at 1:27 PM, May 11, 2017
and last updated 2017-05-13 01:13:56-04

CINCINNATI -- The city came “within a millimeter” of laying off employees and closing facilities under a proposed $1.1 billion balanced operating budget unveiled by City Manager Harry Black on Thursday.

Black was able to plug a $26 million budget hole without closing pools or recreation centers. But he warned the city that it cannot keep balancing its budget by raising permit fees, freezing new hires and forgoing raises to non-union employees.

"You can't keep cutting," Black said. "I think we're at a dangerous point." 

Black strongly suggested the city needs new revenue. But any sort of tax hike is unlikely this year ahead of the November election for City Council and the mayor.

This year Black was able to increase the city’s revenue stream by raising parking fines and parking meter rates, booting illegally parked cars, and increasing building permit fees. But those revenue boosters have hit a ceiling.

For example, Black said he would not recommend raising building permit fees any higher in future years.

“It’s as far as I, as city manager, am recommending that we go,” Black said.

His proposal does include $10 million for a new Cincinnati Police District Five headquarters. It also includes $28 million for street repairs and $10 million for replacing old police cars, snow plows and fire trucks.

But the budget has no funding for a new municipal garage, which tops the list of the city’s worst buildings and will cost $36 million to replace. The garage, which was built in 1939, lacks air conditioning and floors strong enough to support the weight of large vehicles.City employees worry the floors may collapse.

“We don’t have the money,” Black said. “Until … you generate more money those things will continue to suffer.”

City Manager Harry Black unveiled a $1.1 billion all-funds structurally balanced budget on Thursday

On the same day Black unveiled his budget, City Councilman P.G. Sittenfeld filed a motion to add $8.3 million to the city’s coffers.

The motion would move the proceeds from the city’s remaining Blue Ash Airport property into a special reserve account, instead of spending the money on one-time special projects.

“Spending money is easy, saving money is harder,” Sittenfeld said. “This policy directive will help protect the city and its residents in future budget cycles. It represents the equivalent of a 20 percent increase to our reserves, giving us a meaningful buffer in the event of a national economic downturn.”

The motion is signed by six council members from across party lines, essentially guaranteeing its passage. In addition to Sittenfeld, Chris Seelbach, Christopher Smitherman, Kevin Flynn, Amy Murray and Charlie Winburn have signed off on it.

This pool of funds from the airport sale is not currently eligible for operating budget uses, such as city personnel.

“However, by putting it into reserves we actually give ourselves the opportunity to use it later to prevent cuts to basic services such as cops, firefighters, public services,” Sittenfeld said.

City Councilman PG Sittenfeld filed a motion to add $8.3 million to the city's coffers

While Black did not cut any employees, he did propose delaying the start of a new police recruit class by six months until November, a move that would save the city $2.3 million.

He also proposed a hiring freeze across many city departments, except for police and fire positions.

“We will be asking them to do more with less,” Black said. “The expectation of our workforce through this budget will be heightened.”

But Black warned that layoffs could be back on the table if council votes against any of his proposed fee hikes. For example, Black proposed raising parking tickets from $45 to $60 and parking meter rates by 25 cents an hour.

The real budget battle for City Council will likely take place over a smaller $7.3 million pot of funding for human services agencies.

Black is recommending all outside groups – from the United Way to the city’s neighborhood community councils – receive an across-the-board 25 percent cut. That saves the city $1.7 million next year.

But at least one agency -- Cincinnati Center City Development Corporation, or 3CDC -- got a $375,000 boost in funding to pay for its oversight of Washington Park and Ziegler Park.

The budget now goes to Cranley, who has 15 days to make recommendations before the budget goes to City Council to approve by June 30.

This is where the real work begins for council members such as Kevin Flynn.

“I want to keep the pork and special interests out of the budget,” Flynn said. “I’m really going to be putting my green eye shades on.”

One group that did not see its funding cut is The Center for Closing the Health Gap, which has faced increased scrutiny over its spending practices of city tax dollars following two WCPO and Enquirer investigations. The Health Gap’s leaders said they had no need for roughly $250,000 of their $1 million grant from the city this year. So the Health Gap voluntarily cut its funding request down to $750,000 for next year; Black proposed the agency be fully funded that amount his budget.