August 16, 2010
City Hall
Introduction
Good Morning Commissioners,
This is the eighth budget address I have given as Mayor of the great City of Orlando.
Deciding where to allocate our resources to best serve residents is never easy – even in the best of times.
But, the challenges we have faced over the last three years have been unlike any in our City’s history.
In order to confront the effects of this “Great Recession,” we have made some incredibly difficult decisions.
We have cut programs and reduced services.
We’ve eliminated more than 400 positions.
We’ve dramatically reduced the size and driven down the cost of our government.
At the same time, we have also helped residents “weather the storm” and kept our City on course for a more prosperous tomorrow.
We have held our millage rate steady… and in doing so ensured that 45 million dollars remained in the pockets of our residents and business owners.
We’ve fought to create new jobs and preserve the ones we have.
We have worked every day to improve our City services and increase the value of those services to taxpayers.
Perhaps most important, we have not let the effects of the recession diminish our ability to perform our most important job… keeping people safe.
In fact, under the worst economic conditions in 75 years, we’ve engineered the most dramatic reduction in violent crime in City history.
Through our investment in the latest tools, training and technology for our officers, we have made this City safer.
Compared to 2006…
Homicides are down 47 percent.
Robberies are down nearly 50 percent.
Assaults are down more than 25 percent.
The number of cars stolen in this city has been cut in half.
In Parramore, there has been only one homicide event in the last three years.
Juvenile crime in Parramore has been cut by 80 percent.
Our commitment to keeping residents safe even in the toughest times also extends to our fire department.
Cities across the country have been forced to lay off firefighters.
We would have been among them, if not for an extraordinary bipartisan effort to secure federal funding to keep our firefighters on the job.
We partnered with our elected leaders in Washington and our Union Leadership, working for more than a year to secure this critical funding.
Because of this work, our fire department remains one of the top 60 departments in the nation, out of more than 48-thousand.
The relationships we’ve forged at the federal level have also helped secure critical dollars to keep funding programs that we had been previously forced to cut or reduce.
We’ve fought for funding to help combat domestic violence, reduce traffic congestion and fund our social service agencies.
Right now, federal dollars are keeping residents in their homes and helping those less fortunate pay their power bills.
These are examples of the “all hands on deck” approach we’ve adopted in response to these trying times.
We have been able to move our community forward and make our City safer amid a recession that has crippled hundreds of other cities across America.
FY 2010/2011 Budget
Despite this hard work, we began the current budget season in familiar territory:
- Facing the reality that we were going to continue to see increasing expenses and decreasing revenues for the foreseeable future.
- Knowing that while we have made many cuts… more would be required.
- Sharing the belief that if we make tough, responsible choices we can do our part to lead this City out of recession.
Back in March we began work on our fiscal year 2010-2011 budget with an anticipated deficit of nearly 50 million dollars.
Commissioners, at our first workshop I made it clear that I would not support raising the millage rate as a way to solve our budget challenge.
I want to thank each of you for supporting this position.
One third of Orange County’s local governments raised taxes last year and more have indicated they will do so this year.
Not the City of Orlando.
We have continued to draw a line and say our government will live within its means.
In fact, our millage rate is now slightly below the rate when I came into office in 2003.
We have kept our commitment to residents that we will not put an additional burden on them during tough times.
With the burden on us, we have worked together over the past six months to build a balanced approach to cutting costs, enhancing revenues and working with our unions to adjust their contracts to reflect our economic realities.
Our first step was using a responsible amount of reserves to reduce that 49.3 million dollar gap by 20.5 million dollars.
In doing so, we maintained our reserves at 25 percent as required by our policy which is a best practice.
Not only is this an important measure of financial stability for a City government, it also allows us to remain prepared to respond to unexpected emergencies such as hurricanes.
Cost Cutting and Efficiency Measures
Next, we looked at ways to continue to cut costs.
In the past, we’ve done this by reducing each department budget a certain percentage.
This year, we took a different approach.
Rather than using an across-the-board percentage cut, we analyzed the services our departments provide in order to clearly identify our most critical, core functions and the costs associated with those services.
This allowed us to maintain our funding for those core responsibilities in each department, while reducing costs everywhere else.
We also furthered our effort to become more efficient.
- We’ve revamped our warehousing and supply system and taken our mailroom service in-house, generating close to 300 thousand dollars.
- We partnered with Google to provide email services for City employees… at a savings of a quarter million dollars every year.
- We utilized department of corrections workers to take on maintenance in rights of ways at a dramatically reduced cost, saving more than 500 thousand dollars a year.
- We extended the life cycles of our fleet vehicles and generated a savings of three million dollars each year for the next two years.
- We consolidated the Transportation Department under Public Works and generated a savings of 250 thousand dollars.
By looking everywhere for savings, we were able to chip away at that deficit number.
All told, we were able to generate 13 million dollars in citywide savings.
More importantly, the savings are proof that our work to instill a new spirit of fiscal responsibility in every department is generating real benefits.
When I first arrived at City hall, the culture dictated that every department spend every dollar allotted to it… for fear of having your budget reduced the following year.
We’ve changed that ideology and now our city staff strives to provide superior service… while also finding ways to finish each year in the black.
While we are talking about our workforce – I want to say thank you to every single member of our City family.
I know the last few years have not been easy.
You’ve been asked to do more with less… again and again.
You’ve seen positions cut and salaries frozen.
Each day, you come to work and deliver the best services around.
I can’t thank you enough for your dedication to our City and your service to its residents.
Position Eliminations
Of course, our biggest expense will always be personnel.
Unfortunately, cutting costs means we need to eliminate positions.
As we did last year, we offered our employees a voluntary separation option, paid for from current year funds.
This allowed us to eliminate more than 120 positions at a recurring savings of nearly 6 million dollars a year.
Just like last year, we are working to reduce the number of actual layoffs necessary to just a handful.
Revenue Adjustments
Next, we looked at user-based services.
We adjusted fees to reflect the cost of providing the services to the individuals who use them.
By modifying these rates we are ensuring that those who use a particular service… pay the majority of the cost to provide that service.
A good example is excessive false fire alarms.
A false alarm costs taxpayers 632 dollars each time.
Now, those who have more than two in a year will be responsible for paying for that false alarm, rather than all taxpayers.
Another example is permit applications.
In the last three years more than 17-hundred plans have been submitted for review… that never got picked up.
That represents thousands of hours of wasted staff time.
So, we’ve adjusted our fees to include a 25 percent deposit on all plan reviews.
Overall, we adjusted the costs of these user fees to reflect what other governments charge for the same service.
We made sure that City residents pay less than anyone else for these services.
Fire and Police Contracts
The last piece of our budget process was coming to an agreement with our Police and Fire unions to open up their contracts and forego cost of living increases for the next two years.
This generated a savings of more than 3.3 million dollars citywide.
I want to thank union leadership and the men and women of the Orlando Fire and Police Department for their willingness to be an active part of the solution to challenges we are facing in this economy.
Police officers and firefighters often talk about the bond they share with their coworkers and always “having each other’s back.”
It’s not just talk.
By forgoing those salary increases, you have shown that no matter what role you fill here at the City of Orlando… we are all in this together.
It’s with the deepest respect and admiration that I say, thank you.
We are continuing discussions with our other bargaining units.
We hope we will soon have similar wage concessions that will alleviate the need for added position cuts.
Budget Highlights
In a few moments, our CFO Rebecca Sutton and Deputy CFO Ray Elwell will present an overview of the proposed budget.
This budget is the product of partnership.
It’s the result of doing what’s right… rather than what is easy.
It continues a 3-year pattern of making tough choices that may not be easy or popular today… but which put our City on a stronger footing for tomorrow.
Just as families focus on “the basics” when times are tough… so does this budget.
It allows our City to continue to perform the functions of government that people depend on every day… at the highest level possible.
- Protecting our residents and visitors
- Preventing crime and responding to emergencies
- Maintaining our roads, parks and sidewalks
- Picking up trash
Spending money to provide these functions isn’t glamorous.
There won’t be headlines about our City making sure our school safety sidewalk program is funded.
But, ensuring that we provide our core services at the highest level possible no matter what… is the job we were elected to do.
Conclusion
In closing, I want to talk about one of the most common budget-related questions I get when I’m out spending time at many of our locally-owned companies.
Why can’t government run more like a business?
On the surface, it seems like a simple concept.
Yes, you want your government to be as careful with a dollar as every small business is.
Of course, you want your government to strive for maximum efficiency and superior customer service.
If you really think about it… you don’t want your government to run exactly like a business.
The fundamental difference between government and the private sector is the response to supply and demand.
Our recession illustrates this in vivid detail.
In the private sector there is a direct relationship between demand for a product… and the availability of that product.
Take one of our local companies, for example, in either the restaurant or hospitality industry.
When demand goes down… it means they lose customers.
The company responds by reducing inventory or laying off employees.
In government… demand stays the same even when revenues drop.
In fact, tough times often result in increased demand for services.
Fires won’t put themselves out.
Roads can’t repair themselves.
So, the challenge of government is to provide critical services even when revenues drop and times are tough.
Commissioners… that is what we have done every year since our economy began to falter.
That is what this budget accomplishes.
Orlando is certainly not immune from the effects of recession.
But, I believe we are now in a better position than most cities to surge ahead once our national economy recovers.
This budget is another critical step in leading our city through recession… and into recovery.