LOUISVILLE, Ky (WHAS11) -- A city budget that relies upon both the economy improving and borrowing $21 million in two bond issues to make up for a projected $20 million deficit was presented by Louisville Mayor Greg Fischer to the Metro Council on Thursday.
The $512 million budget includes no tax increases, cuts in city services, layoffs or furloughs. It calls for 52 capital projects totaling $55.8 million. Non-union city workers would receive a two percent wage increase.
"What I'm presenting to you today represents reasonable steps toward a leaner but well-planned government. And it invests in a future that we all know is coming faster and faster then ever," Fischer told the Metro Council Thursday afternoon.
The mayor is banking on an improving economy delivering a 2.7 percent increase in tax revenues, but that's still not enough to balance the budget.
"With great determination we are steadily whittling away at the structural imbalance while we continuously improve and make strategic investments," Fischer said.
The city points to cost savings in several areas:
- saving $3.1 million by reducing overtime costs
- New contracts with EMS, Corrections that reduce overtime and pay increases
- the mayor is giving up his contingency fund
“While I commend the Mayor for his work to address runaway overtime costs within two contracts, I also must express my concern that this budget falls short in addressing the long term structural imbalance," said Ken Fleming (R-7) Minority Caucus Chair, in a statement.
The Metro Council's review of the budget begins Wednesday, March 30 with public comment invited on Wednesday, June 6.
“The Budget Committee is ready to do our fiduciary responsibility reviewing the budget, hearing from department heads and public input," said Marianne Butler (D-15), Chair of the Budget Committee in a statement. "We will move forward as a team to get the best, most efficient budget for our residents."
"We're making targeted and thoughtful changes to the structure of the budget while at the same time improving efficiencies and effectiveness of our service delivery," Fischer said.
Fischer said that in 17 months, his administration has addressed 40 percent of the $25 million structural imbalance.
The budget also includes a one time windfall of nearly $15 million through some accounting maneuvers using a city agency, the Parking Authority of River City.
Under the plan, PARC will issue bonds to buy two city parking lots for $10.7 million. By leasing the parking spaces to the city for use by Metro employees, the city would provide a consistent revenue stream to pay the debt service on the loan.
The deal, coupled with PARC finally delivering a $3.9 million payment eight years late for two pre-merger Jefferson County parking garages, allows Fischer a one-time $14.6 million credit in the budget.
"In this case with the parking lot, it is really a financing structure that's going to allow us to free up some cash today in a poor economy that we will ultimately repay in a better economy, hopefully," said Metro Council President Jim King.
Fischer is also proposing the issuance of $9.5 million in bonds to deliver on a campaign promise to build a Southwest Regional Library in Valley Station. The Library Foundation would contribute $3.5 million to the construction next to a Meijer’s store at 9905 Dixie Highway.
“The library is the only project I’m borrowing money to pay for," Fischer said. "The city should generally only issue bonds for strategic long-term investments and the library meets that standard.”
"We're borrowing a lot of money, a lot more than it probably looks like," cautioned Councilman Kelly Downard, the Budget Committee Vice-Chairman. "And I want to make sure that we're doing it in the right way."
“This is a great day for the district and everyone in Southwest Jefferson County,” said Councilman David Yates (D-25) in a statement. “We will long remember the day when the new branch opens its doors on Dixie Highway and changes the lives of children and adults in our area."
$304 million of the $512 million budget, or two-thirds, is dedicated to police, fire, EMS and public protection. The budget restores a third police recruit class that was cut in the last fiscal year.
"I’m encouraged to see three new police recruit classes and one additional fire recruit class," said Councilman David James (D-6). "I want to thank our public service employees for the work they do for our city every day."
The budget includes $400,000 to purchase 55-gallon recycling bins for two garbage routes
"It will increase the volume of recycling which will increases our revenue," said Councilwoman Tina Ward-Pugh (D-9) in a statement. "And it will demonstrate that expanded recycling makes sense for all neighborhoods. I give Mayor Fischer a big green thumbs up.”
Fischer is proposing $500,000 for lighting and other improvements on South Fourth Street, between the Seelbach and Brown hotels, to attract retail downtown. The Downtown Development District had requested $2 million.
Other proposed spending includes:
- $14.4 million for housing projects
- $5.6 million in new equipment for Fire and Police
- $6.8 million of vehicle purchases
- $1.5 million to replace the HVAC system at the Mary T. Meagher Aquatic Center in Crescent Hill. The mayor said the pool was in danger of closing because of chlorine and mold problems.
- $500,000 to purchase undisclosed West Louisville property to help attract business.
- $125,000 to help foreclose on 100 of the most marketable vacant properties. Those properties, in turn, would be sold to private investors who would renovate them and improve neighborhoods
- $90,000 to hire a nurse to help with non-emergency calls for EMS
- $75,000 to buy e-books for library users
- $60,000 to hire a tree inspector to help improve the city’s tree canopy
Several Council members expressed concern that the budget maintains external agency funding, which was cut last year, at current levels.
The budget maintains funding for the University of Louisville indigent health care fund, known as the Quality Care and Charity Trust, at $7 million, the same level since city-county merger in 2003.
The budget also fulfills a pledge Fischer made earlier this month to preservation-minded developers of five historic but dilapidated "Whiskey Row" buildings on Main Street. The mayor had promised to match a $1 million grant by philanthropist Christy Brown to create the Louisville Heritage Conservation Fund to help save and restore historic properties in Louisville in emergency situations.
The mayor's budget includes $500,000 toward that fund to be matched dollar-for-dollar by a private donor and perhaps a Metro Council grant.
Fischer pointed to other expenditures which leverage public dollars to attract matching private investment:
- $1 million SummerWorks jobs program for at-risk teens. The city is contributing $100,000 and the private sector $900,000
- $900,000 to purchase 82 acres of land that will connect the Louisville Loop with Jefferson Memorial Forest. The city will contribute $450,000 and David and Betty Jones will contribute $450,000
The budget includes $64,000 to restore garbage collection after New Year's Day and Martin Luther King Day, a service that was cut this past year amid outrage from some residents.