Mayor's Budget Address
July 13, 2009

Good morning.

Commissioners, for the past six years we have worked together to transform Orlando into a City of progress… a city of opportunity… a City on the rise.

Most importantly, we have worked to ensure Orlando is a safe place to live, work and raise a family.

We have made certain that every new property tax dollar has been spent on public safety… while we reduced the size of government everywhere else.

Despite our hard work, our City is entering uncharted territory because of the global economic crisis and the effects of state-mandated property tax reform.

We are not alone.

City, County and State governments across the nation have been pushed to the breaking point.

But, the job of making sure that Orlando endures this challenge falls uniquely to us, as responsible stewards of public money.

We weren’t elected to office just to handle the easy stuff.

We were given the opportunity to serve so that we might make these difficult decisions and do what is necessary when times get tough.

This is the very definition of leadership.

Commissioners,

Even though we are confronting a deficit…

Even though we must reduce the size of our City government for the long haul…

Even though we face, perhaps, the biggest test of our public service careers…

I am confident this City Council will meet this challenge head-on with vision and resolve…

Without excuses or apologies.

Abraham Lincoln said, “You cannot escape the responsibility of tomorrow by evading it today.”

Our budget doesn’t shy away from our responsibility.

It’s a long term strategy.

This budget - combined with the action we take today in setting the millage rate - keeps Orlando on course toward a better future by accomplishing four strategic goals:

• Lower the tax burden on our residents at a time when it’s desperately needed
• Lower the tax burden for our businesses… allowing our City’s businesses to save jobs
• Preserve core City services while drastically reducing the size of government to meet the demands of this crisis
• Use a responsible portion of our reserves while maintaining the fiscal health of the City

Orlando’s Budget Challenge:  Long Term Reduction Necessary

Earlier this year, it was clear the recession combined with the effects of state-imposed revenue limitations drastically reduced the City’s anticipated revenues for the next several years and left our budget in a state of “structural imbalance.”

This means our City will see an increase in costs and a decrease in revenues for the foreseeable future. 

In the upcoming fiscal year, that imbalance means an estimated deficit of 40-point-three million dollars.

In years ahead we will see larger deficits… unless we make a change.

The Budget Plan:  Hold the line on taxes

That change begins with the decision to give our residents tax relief.

In order to secure even the same ad valorem revenue the City received last year, it would take a dramatic increase in the property tax rate.

Increasing the tax rate would be a simple fix – rather than developing a long term strategy and implementing fundamental changes.

Again, we were not elected to do what is easiest.

We’re here to do what’s in the best interest of our residents.

As I made clear in my State of the City Address in February, I am unwilling to raise taxes at a time when families are struggling just to get by.

So, the first part of our budget proposal is to hold the line on taxes.

By doing this, we’re actually providing a needed savings to residents and businesses.

We give them a chance to reinvest that money in their families, homes and businesses.

If we hold the line on taxes… more than half of our home owners are going to pay substantially less in the upcoming year.

Another 30 percent will see an increase right around one dollar.

This is the kind of tax relief our residents need to make it through this recession.

The Budget Plan:  Reducing Government

If raising taxes is not the solution – then the only way to balance our budget is to cut costs and reduce the size of our government.

Much like residents who must make choices about what to spend their money on during difficult times… the best option to overcome this challenge is to decide where the City can scale back its expenses… while continuing to serve residents at the highest levels possible. 

In March, our senior management team began this process by crafting 12 percent reduction plans for each City department.

Every employee was invited to be part of this process along with our union representatives.

We have worked together over the past five months to refine these budget reduction packages.

The result is the recommendation before you today.

The Budget Plan:  Cost Cutting Measures

This is a balanced budget based on the factors that we can control.

I felt it was vital to lead the way in cutting costs.

So early in the process I announced that all appointed officials will be subject to a salary freeze and required to take a one week unpaid furlough among other reductions that effectively reduce their planned 09-10 salaries by almost 6 percent.

At our most recent budget work session in June, our finance staff gave you a comprehensive list of the Citywide service cuts contained in this budget.

Each department took advantage of every opportunity to reduce costs in an effort to minimize potential layoffs.

That list includes measures that make existing jobs more efficient:

• Saving money in the Police Department by having officers enter their reports themselves using new technology rather than an outdated and more costly method where they passed their reports on to data entry personnel.
• We found savings in our fleet department by reducing the number of managers and creating one, extended shift
• We are replacing large portions of St. Augustine grass in the City with Bahia.  This new grass requires substantially less mowing and watering and will save the City money.

The list of cuts also includes the elimination or reduction of many services:

• Eliminating our Downtown Ambassador program and our downtown cleaning crew
• The elimination of a full time OPD mounted patrol
• The elimination of our public arts coordinator position and  city-supported museum exhibits
• A reduction in maintenance of City Hall
• An almost complete reduction of all holiday decorations
• A drastic reduction in landscaping, irrigation and mowing cycles
• Reduced pool and community center hours

The Budget Plan:  Position Eliminations

These cuts will save us money – but they only take us part of the way toward overcoming our projected deficit.

Because the vast majority of the City’s budget consists of salaries and benefits, the reduction necessary to bridge the gap is simply not possible without eliminating positions. 

Again, I felt it was critical to lead by example.

Last week, I announced that the Mayor’s Executive offices would cut a total of 12 positions.

The current budget plan includes the elimination of a total of 313 positions, of which 212 are filled.

It includes unfortunate but necessary position cuts to our two biggest departments – Police and Fire.

From the beginning, we have worked to conduct this extremely difficult process with compassion, integrity and transparency

Those employees whose positions have been identified for elimination were notified in May.

Those employees and all members of our City workforce have received constant communication and information about the budget process and what impacts it will have on our workforce. 

This includes pension and healthcare benefits information, counseling services and information about job training workshops and other classes available to employees. 

We also offered employees the opportunity to take a voluntary separation package, including those whose positions were identified for elimination.

We are currently in the final stages of determining what impact those voluntary separations will have on our budget, but we know the impact will be positive.

The Budget Plan:  Responsible Use of Reserves

Commissioners, in our roles as stewards of public money, our most important job must be making sure our City is financially stable.

The final piece of our plan is the responsible use of our reserves enabling us to bridge the remaining portion of our budget gap while at the same time maintaining the City’s financial health.

The Budget Plan:  Still “A Work In Progress”

As I said before, the plan before you today is a balanced budget based on the factors that we can directly control.

We are in the midst of a nationwide economic mess… that is affecting our City differently than anything we have dealt with before.

So, we’re going to have to think differently and act differently in attacking this challenge.

In recent years, I presented a complete budget proposal to you on the same day I gave my annual budget address.

But, the budget in front of you today is a “Work in progress.”

If nothing changes between now and September, this balanced budget proposal will stand.

We hope a number of factors outside of our control will make some of the cuts and position eliminations unnecessary.

We are in the process of applying for two different federal stimulus grants that would allow us to preserve many of the position cuts in the Police and Fire departments.

These are newly available, competitive federal funds that are designed specifically to aid cities like Orlando who have determined they must make cuts to those departments.

We are also seeking other resources outside the City to preserve and maintain services, chiefly from a variety of other funds through the federal stimulus program:

Everything from road repair… to stopping domestic violence… to helping our fleet become more energy efficient.

We also have been in contact with each of our bargaining units and hope that we are be able to stave off some of these personnel cuts.

As I said earlier, the number of voluntary separations could also help to lessen the need for layoffs.

All of these outstanding factors mean one thing – our work on the budget is going to require more refinement as we enter the end of summer and move into the fall.

The Budget Plan:  Keeping Orlando on Track

Looking at the big picture, this budget emphasizes our core services.

• Our total budget is reduced by 47 million dollars.
• Our general fund is reduced by 9 million dollars.
• The only departments that will see an increase in their budgets are Police, Fire and Public Works.

This budget does not paint a rosy picture today.

But, it’s important to realize the picture is not bleak, either.

The plan we’ve developed balances hard realities… with hard choices.

This budget preserves many of the important projects and priorities we have set as a community.

In the coming months, downtown’s new Fire Headquarters is set to open along with a new Police Training Facility.

We have made sure there is money in this budget to maintain tools and training for our police and firefighters.

This investment will help ensure the long term safety of our residents.

The Community Venues will be built – without any general fund dollars.

Right now at the Events Center site – jobs are being created and companies are staying afloat because of the project’s positive economic impact.

Through our Strengthen Orlando program, we continue to leverage partnerships across our community to help residents and businesses weather the storm during these tough times. 

Lessons from the Orlando Magic

Later today, during our regular City Council meeting, we will vote on the proposed millage to be sent out with the TRIM notices for fiscal year 2009/2010.

Holding this millage rate steady and putting money back into the pockets of our residents is a critical first step to the strategy we are recommending.

The other elements of the strategy are going to require some heavy lifting on our part – and the ability to think differently and use every opportunity to cut costs.

Our Orlando Magic, in their run to the NBA finals, gave us an interesting lesson on how we might approach our task.

Many times, the Magic found themselves behind by large margins… early in the game.

They didn’t go into crisis mode.

They knew there was a lot of game left.

They knew they could not miraculously bridge that deficit with one shot.

The team had to make adjustments and be willing to change their game as the situation demanded.

They had to make small gains when they were given the chance.

They had to be creative.

When the entire team embraced this game plan as a unit, good things happened.

Bucket by bucket… they climbed back… and erased that deficit.

Commissioners, it’s time for us to embrace that spirit.

We are “early in the game” when it comes to the long term effects of this global financial crisis on our City.

I firmly believe if we follow this strategy and are open to embracing change and making gains where we can we will come out ahead.

If we put money back into resident’s pockets and responsibly reduce the size of government, we will put our City in position to endure this hardship and surge ahead once our national economy recovers

Thank you.

 

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