ONE CITY, ONE FUTURE
FUNDING OUR PRIORITIES IN THE FACE OF CHALLENGE
2009-10 Budget Remarks
Mayor Robert J. Duffy
City Council Chambers
Friday, May 15, 2009, 11:00 A.M.
Today I respectfully submit the final budget of my first term. We have worked hard to produce fair and balanced budgets every year -- without fiscal gimmicks. During my tenure, property values have risen by 13 percent and we will continue to make improvements in our neighborhoods to further this trend. We have reduced the tax rate for homeowners and businesses. We have laid the groundwork for business relocation and expansion, which has brought jobs to our city. We have seen a decrease in violent crime, we have put our youth to work and downtown is seeing its greatest growth in 40 years. None of this would have been possible without focusing our resources on our priorities of public safety, education and economic development.
This year’s budget is not government-as-usual. It closes a $35.1 million dollar gap without adding to the burden on the backs of our taxpayers. It reduces spending by 6 percent less than last year and homeowners will see a 4.7 percent reduction in their property taxes.
Our 2009-10 budget in our 175th year as a city reflects the difficult but necessary choices that we made as a result of our nation’s economic catastrophe. This budget decreases the size of our government to meet the demands of this crisis. This year, homeowners will continue to see a reduced tax rate and there will be no other tax or fee increases.
This budget also reflects our commitment to expanded customer input. We continue to implement efficiencies, reductions and consolidations that will save millions for our taxpayers.
Abraham Lincoln once said, “You cannot escape the responsibility of tomorrow by evading it today.” Our 2009-10 budget faces that responsibility head on and without excuses or apologies.
I want to take this time to thank my staff – especially Deputy Mayor Patty Malgieri, Budget Director Bill Ansbrow and the entire Office of Management and Budget for this outstanding effort. I want to thank all the City commissioners, directors and management for getting behind this effort.
I also want to thank City Council President Gladys Santiago and the entire City Council for their cooperation throughout the year and for their collaborative focus on our efforts to revitalize Rochester. As they begin to deliberate on the proposed budget that is before them, I pledge our full assistance and resources to answer any questions, or provide any data that they may need. I look forward to our discussions.
In spite of the pall that is cast by our national economy, Rochester is headed in the right direction. We have much to be encouraged by:
• Violent crime is down by 25% in our first quarter when compared to the same time period last year. When compared to 2006 violent crime is down 35%;
• Our police force has expanded to an all-time high. Our residents will see more officers in their neighborhoods;
• Companies like PAETEC, ESL, Pathfinder and FRA Engineering are investing here;
• Companies like Stantec and others who I wish not to name today are looking to possibly invest here;
• The Midtown Rising Project is moving full speed ahead;
• The number of people living downtown has nearly doubled over the last five years;
• We have created “Summer of Opportunity” and PRIME to give our young people and citizens a boost in their search for meaningful work; and
• We have exciting new developments taking place at Carlson Commons, Brooks Landing, Corn Hill Landing, Mills at High Falls and the Hamilton and Erie Harbor complexes that are bringing more residents to our great city.
We are moving steadily towards making Rochester a destination and the best mid-sized city in America.
This budget year started out very solemnly with a projected gap of $31.9 million driven by a $23.3 million reduction in state aid, representing a 20 percent loss. Last month, that shortfall grew to $35.1 million as our revenues slipped further downward.
These are voluminous and staggering numbers, but what do they mean to the everyday family? To put it into perspective, the average household income in Rochester is $29,000. I knew that we simply could not place any more burden on our citizens to fund government. Recognizing that there will be pain in the budget in the form of job losses, consolidations, funding reductions and program eliminations -- I took tax increases off the table.
Last year, our amended budget totaled $481 million. This year’s proposed budget totals $452 million. This 6 percent reduction reflects the pain and difficult choices that must be made to protect our taxpayers from the added weight of higher taxes. Unlike other governmental entities, we knew that this was the time to reduce spending and return money to our taxpayers to enable them to reinvest in their families and homes.
When was the last time you have seen a government actually cut the budget -- not the rate of growth -- but actually cut the number.
To further demonstrate our commitment, I am freezing the tax levy. Freezing the tax levy combined with an annual State required adjustment known as the “tax shift” between the homestead and non-homestead properties results in a 4.7% reduction in the homestead tax rate. This will reduce the typical homeowner’s tax burden by $64.51.
This state-mandated shift and assessment changes unfortunately also increases the non-homestead tax rate by 2.5% and increases the typical business burden by $269.97.
The state-mandated Maintenance of Effort (MOE) law commits 73 percent of our property taxes to the Rochester City School District. This leaves us with 27 percent to fund all other City services, including police, fire and street maintenance. The MOE eliminated our ability to lower the non-homestead rate this year.
The proposed property tax rates for 2009-10 build upon our previous efforts to reduce property taxes. During my term, we have leveraged new investments in the city that have led to increased City property values. Since I became Mayor we have reduced the homestead and non-homestead tax rate by 6.6 percent and 6.9 percent, respectively.
Rochester is renowned for its sound fiscal practices and highly competent Finance and Budget staff and we were guided by them as we formulated this budget. Our decisions continue to be guided by good government practices that provide the best and most cost effective service to our customers and citizens. This is why we expanded our efforts to obtain citizen input this year as we crafted the budget.
We initiated a formal process to obtain input from our employees, our city’s youth, our union leaders, and our faith community. We held “Voice of the Customer” (VOC) sessions in each city quadrant where we demonstrated how citizen input was applied from the year before and presented items that the City will act on in 2009-10.
Citizen input received from those sessions include:
• More consolidations, collaborations and efficiencies;
• Support for increased police staffing levels and more citizen-police communication;
• An expectation that City employees share the same sacrifices made by residents;
• Senior City management should lead by example with a wage freeze;
• The City should strongly support home ownership and maintain an aggressive demolition program;
• The City should not make reductions that negatively impact our youth;
• There is little public awareness about the limited influence City Hall has on educational spending and results, or of the City’s level of generosity, to the City School District;
• The City should reduce overtime and stop leasing buildings and property;
• This year is not the time to raise property taxes;
• The City should support new revenue sources other than raising property taxes; and
• City management and unions should find win-win solutions.
I want to thank our customers and citizens for their valuable contributions. We listened and put many of these recommendations into action. You will see them unfold as you examine the budget document.
Now let me detail how we addressed our shortfall. We closed the $35.1 million gap with:
• $10.6 million in anticipated savings from health care and collective bargaining agreements
• $10.3 million in departmental efficiencies
• $2.1 million in departmental reductions
• $6.3 million in reductions from planned cash capital investments
• $3 million in anticipated revenue from the sale of property
• $1.3 million in savings from freezing management salaries and suspension of the performance incentive until further notice
• $2 million in revenue from the Tax Relief Fund established from last year’s State “spin-up” and
• $500,000 in other reductions.
Although this budget contains few new initiatives due to the size of the gap, there are some that will be realized out of necessity and funded through our efficiencies. We will realize an additional $3.2 million in savings from lower retirement contributions to help us fund $3 million in enhancements. I am also proposing to fund $400,000 in expenses related to the operation of the Rhino's Stadium. The alternative would be to risk having an empty stadium for the rest of this year.
We have further reduced the City’s full-time work force by 53 positions. Our hiring freeze limited the number of layoffs to 38 full-time and 11 part-time employees. These numbers are expected to go down as individuals bid for job openings and more retirements are finalized. During my term as Mayor, the total full-time workforce has declined by 4.8 percent while the authorized number of sworn police officers has increased by 5 percent.
A Labor/Management Committee has been working for months on a win-win solution to reduce the City’s health insurance costs. Hopefully, this joint effort is successful or we will have to consider additional layoffs and other painful budget adjustments.
Now let me discuss the changes, investments and reductions we are making in our priority areas of public safety, education, economic development and customer service. As you will see much of the public input we received from the Voice of the Customer is reflected in this budget.
PUBLIC SAFETY ENHANCEMENTS
We added funding for police surveillance cameras. Currently there are 50 cameras and 10 more will be installed in June 2009 with 40 more throughout the year. I anticipate a total of 100 cameras to be fully operational by June 30, 2010.
Construction will begin this summer on a major renovation and expansion at the Hudson Avenue Fire House. The Rochester Fire Department will install 3,600 smoke alarms and 1,400 carbon monoxide detectors in the coming year. Our fire recruitment program will be expanded to increase diversity.
Monroe County funding increases will allow us to hire six additional full-time and four additional part-time 911 operator positions.
More than 3,200 street light fixtures will be replaced with more efficient fixtures that provide 110 percent more light and use 65 percent less energy.
Congresswoman Louise Slaughter secured $675,000 in funding which will enable us to avoid immediate police layoffs. Federal funding in the amount of $1.9 million per year for three years has been requested. If we do not receive these funds, up to 15 police officers could be laid off or additional budget reductions would be required in October. We have postponed our scheduled summer police recruit class due to budget constraints.
Funding for the scheduled replacement of marked police cars will be reduced by at least 25 percent and the scheduled replacement of the Genesee Fire station is deferred for one year pending notification of federal stimulus funding.
Total budgeted police overtime will be reduced by 13.6%, while budgeted overtime for special events is reduced by 23.4%. Total police overtime spending in 2009-10 is estimated to be $3.5 million, which should be 60% below the actual 2007-08 amount of $8.8 million. It is also anticipated that Fire Department overtime will be reduced as a result of Phase II of their reorganization converting to an engine/truck service delivery model.
In this budget, our Fire Department’s community outreach efforts will primarily be provided by firefighters in neighborhood fire stations. And to enhance police officer safety and enable more efficient dispatching of vehicles, most police cars will be equipped with automatic vehicle locator devices.
The 2009-10 budget includes an additional $2 million in City-financed demolition to offset the anticipated decrease in Restore NY monies.
We will be funding major renovations of the Crossroads Garage, but unfortunately, major renovations planned for the Crossroads Park -- located above the garage -- will have to be deferred until market conditions are clarified.
Our consolidation efforts for the new Department of Neighborhood and Business Development (NBD) will save us $1.4 million, annually. We will also be implementing a quadrant-based team model for enhanced service delivery and results.
$1.4 million in capital funds will be allocated to increase the development of market-rate housing and the construction of owner occupied homes.
We are also setting aside $2 million in federal and local funding to plan and design new infrastructure at the new Midtown Rising site.
Regrettably, additional renovations to Manhattan Square Park will be deferred for one year due to budget constraints.
Public school educational excellence is our goal. We all want to see dramatic increases in the number of our children who graduate from Rochester City Schools. Currently, that graduation rate hovers at around 50 percent. This means that approximately half of our children are entering their adult lives at a disadvantage.
While we still have a long way to go, there has been progress. Much of the credit for the improvement needs to go to Superintendent Jean-Claude Brizard. There have been positive steps forward thanks to his stewardship and I am looking forward to a continued collaboration that puts the interests of children first.
I suspect that we have yet to see the full impact of the ill-conceived state MOE law. It is a mandate that inherently satisfies the interests of a few at the expense of many. The State Education Department has still not developed the required regulations to oversee compliance. Our discussions with state education officials have given us increased concern that there may be additional, indirect and costly mandates coming out of Albany.
The MOE penalized Rochester for its past generosity to its schools and it appears New York State may seek to aggregate all youth spending as part of the MOE in order to satisfy special interests.
Given our uncertainty, we have discontinued presentation of the Children’s Funding section in our budget. We can’t risk that our generosity to the school district might be misconstrued and used against our financial position. I continue to be a strong advocate for supporting our youth, yet there continues to be forces that want to protect turf instead of focusing on our children and results.
To significantly increase graduation rates and offset the loss of state Summer of Opportunity funding, an additional $400,000 from the 2008-09 budget will be used for a contract with the Hillside Work Scholarship Connection Program to increase the number of children in the program and enable the City to be a participating employer and leverage other funding.
The pilot literacy outreach effort that began in 2008-09 will be expanded due to the generous donation of the Fenyvessy (Fen-a-ves-E) family. Beginning this summer the Highland, Charlotte and Phillis Wheatley library branches will gain a literacy outreach component. The literacy outreach efforts will continue at the Arnett, Maplewood, Lincoln, Lyell, and Sully branch libraries.
We will be creating additional summer jobs for youth. Our summer recreation service hours will be extended 4 hours per day at various centers and we will be initiating a youth anti-graffiti program based at the North Street Community Center.
In the past, State funding for our “Summer of Opportunity” program created 200 jobs for our youth. With that funding gone, we will offset the loss this year with the expanded Hillside Work-Scholarship Connection, yielding 150 jobs. In addition, 59 jobs will be created by combining the additional funding for the extended recreation center hours and new summer youth jobs in other City departments. These new initiatives when added to existing summer employment programs will result in a total of 615 City summer jobs for youth. I continue to call on our federal and state officials to provide additional funding to put our young people to work.
We will add weekend code enforcement service hours as a pilot in response to input from Voice of the Customer sessions at no additional cost.
Four crews of seasonal PRIME workers will be funded to pick up litter again addressing input from the Voice of the Customer.
We will institute a pilot after-school program at the Lake Riley Lodge. It will be initiated with user fees to offset the cost. In addition, we are proposing that City funding be used to support an after school program at School #28 in partnership with the Rochester Area Community Foundation.
City personnel will be used to demolish 100 vacant houses. This will allow us to conduct a benchmark comparison to contracted demolition efforts, which will simultaneously be removing an equal number of vacant structures.
We are providing seed funding of $10,000 to support a fall 2009 Faith Based Initiative Conference. Like President Obama we are encouraging increased input from our faith community as we move forward.
We will increase funding for the Rochester MusicFest by $75,000 as part of our 175th Anniversary celebration.
We also will be adding a part-time investigator in the Office of Public Integrity to increase our responsiveness. The Office has experienced an increase in requests for assistance and it is a valuable resource for transparency and accountability in City government.
Consolidation is a necessary component in closing our $35.1 million dollar gap. We will be continuing our aggressive approach to streamlining City services.
All parking related activities will be consolidated under the Finance Department to drive future efficiencies and improve customer service. Operations will be consolidated into office space at the South Avenue Parking Garage.
As I mentioned earlier, the Departments of Economic and Community Development will be joined with our Neighborhood Service Centers into one department and will be relocated. In line with this, a majority of our code enforcement officers will be moved to City Hall to improve consistency and customer service, but don’t worry we will ensure that they are out in city neighborhoods after their morning briefings.
Our Bureau of Youth Services and the Office of Employment Opportunities will be consolidated and moved into vacant office space at the former Sibley Building, where the landlord has provided us with free rental space. Bureau of Recreation administrative staff will be consolidated at 400 Dewey Avenue to enable efficiencies.
During the year, the Street Lighting Unit will be relocated to City Hall from space currently shared with Recreation staff at 400 Dewey Avenue.
We will be moving the Office of Public Integrity from rented space into the Rundel Library by January 2010.
And finally, the Special Events Unit, which was transferred to Communications during 2008-09 will be physically moved next fiscal year.
I am very proud of the efficiencies that we have achieved through the input of our employees and our customers. This is a very important component in balancing our budget.
We hope for a $10.6 million dollar savings from health care changes and collective bargaining negotiations. Citywide, we anticipate an overall 9.6 percent reduction in overtime.
The planned acquisition of the remaining portion of the City street lighting system will save $1.8 million in operating expenses and $1.1 million in capital expenses.
The implementation of the tax lien sale program will continue to save City taxpayers $826,000 annually.
We have standardized the temperature range for City buildings at 67 – 70 degrees for the cooler months and we will also experiment with temperature controls during the warmer months. This standardization and other energy efficiencies will generate $165,000 in savings this year.
We will save $1.3 million as a result of freezing Senior Management salaries and eliminating the planned cost-of-living adjustments for administrative, professional, and technical (APT) personnel.
We also analyzed whether or not contracting out for services would yield taxpayer savings. As a result, we will bid contracts for the mowing of City parks and small equipment repairs. This will yield a savings of more than $100,000.
CAPITAL INVESTMENT DEFERRALS AND BUDGET REDUCTIONS
One of the last legs towards closing our shortfall included deferring capital investments and further program reductions for our non-governmental partners.
As I mentioned previously, we have deferred the next phase of renovations to Manhattan Square Park until next year. This will free up $1.4 million. The deferred Crossroads Park improvement will save us another $1.8 million.
We will be introducing a new marking design for City owned vehicles and will be reducing the number of signs made in-house, resulting in a savings of $40,000.
We will reduce funding for the Puerto Rican Festival and High Falls Film Festival due to budget constraints.
We will cut back on our support for the Rochester Philharmonic concert series and the Rochester International Jazz Festival. Finally, funding for ‘Ribbin on the River’ will be eliminated altogether.
SELF SUPPORTING ENTERPRISE FUNDS
I am not recommending fee increases for refuse, water or local works charges. Now is not the time to raise these fees given the state of our national and local economy. I anticipate that we will sell our watershed to New York State in the coming months and ensure this land will be forever wild. Thus I am budgeting $2 million from the anticipated sale to balance the water fund.
The refuse fund is balanced due to the multiyear refuse disposal agreement with Monroe County and the redesign of our collection routes. I am proposing that we balance the local works fund with an appropriation from our fund balance. I recognize we will likely have more difficult decisions to make in the future to balance these funds.
I am proud of this budget. We have closed a $35 million dollar gap without strapping our already overburdened taxpayers. We have trimmed our spending by 6 percent and our homeowners will see a 4.7 percent reduction in their property tax bills. We have avoided service reductions. We have funded our priorities and helped position Rochester to become the best mid-sized city in America.
his budget is not government-as-usual. We have cut to the bone and the next round of cuts will severely impact services. Instead, we must look to consolidation to more efficiently serve our citizens. For instance, there are many functions that we share with the Rochester City School District. Significant tax dollars can be saved by sharing these services.
The system is broken, as evidenced by the departure of our esteemed philanthropist, Thomas Golisano to the state of Florida. His action should set off alarms in Albany, sounding that now is the time to change. It is incumbent on us locally to take the necessary steps to change our system.
Our economy requires us to think differently and to use every opportunity to increase our services and reduce our costs. This is exactly what the private sector is doing to survive and we must do the same. I plan to meet with Superintendent Brizard, and Board President Malik Evans and conduct Voice of the Customer sessions on this issue and others.
I also continue to believe that mandate relief will play an important role in the City’s ability to control its costs. I support Governor Paterson’s call for pension reform and a new tier for new employees. I am looking forward to his forthcoming proposals to address mandate relief and welcome the opportunity to work with the Governor to make them a reality.
I firmly believe that we are moving in the right direction. We will not take the easy way out and we will not run government-as-usual.