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Important Update Regarding the 2012 City Budget

We are pleased to report that significant, positive progress has been made on the Fiscal Year 2012 City budget.  As you know, the Mayor’s budget released in April proposed to slash a substantial number of City services and employee positions, most notably, the decimation of library hours and staff and recreation center hours and staff.  In all, the Mayor’s proposal was to eliminate 188 general fund employee positions, the majority of which were MEA-represented positions in the Library and Park and Rec Departments.

Since the Mayor’s proposal was released six weeks ago, MEA has worked diligently with the City Council and the Independent Budget Analyst (IBA) to ensure that the Council finds alternatives and ultimately rejects the Mayor’s proposed cuts.  On Monday, June 6th, the City Council will have the final say on next year’s budget.

In making that final budget call, Councilmembers rely heavily on the recommendations of the IBA.  The IBA released a report containing final budget recommendations Thursday night, and that report contains a significant amount of good news for MEA-represented employees.  The IBA’s final budget proposal restores every single Library Department proposed cut, and almost every single Park and Recreation Department proposed cut from the Mayor’s April budget.  The IBA’s proposal also restores four civilian positions in the Police Department’s Abandoned Vehicle Abatement Unit that MEA fought especially hard for over the last several weeks.  The other good news is that the IBA proposes to restore all of these positions with ongoing revenues (instead of “one-time” fixes) which will help to ensure that these positions remain funded past 2012.

In all, the IBA’s budget proposal restores 153 of the 188 general fund positions proposed to be cut by the Mayor.  As we noted, the City Council has the final say on Monday but has already provided significant input into the IBA’s final recommendations.   Therefore, it is a very safe bet that a majority of Councilmembers will adopt the IBA’s final budget proposal with very few, if any, substantive changes.

Of the remaining 35 general fund positions still proposed to be eliminated, 22 are vacant sworn Police Officer positions, and there are still a handful of MEA-represented positions in various departments (the rest are Local 127-represented positions).  MEA has been and will continue to fight for the restoration of every last MEA-represented position before the final budget is approved next week.

Looking forward to the FY 2013 City budget, some City officials are still talking about a “structural budget deficit” that remains to be addressed.  Yet based on the increased tax revenues coming into the City, a fully funded reserve (thanks to the previous year’s budget surplus), and the significant investment gains in the pension fund in the last 12 months (which translate into a lower required pension payment by the City for FY 2013 and into the future), it appears that the City’s budget is very close to being structurally balanced for the first time in quite a while.  Assuming the economy (and associated tax revenue to the City) does not decline further from here, we may—dare we say—be at the “bottom” of the City’s fiscal morass.  This is not to say that it will be all smooth sailing ahead by any means, but it does seem likely that the need for significant additional cuts in City services and positions is unlikely in the coming budget years.

An executive summary of the IBA’s report is attached.  If you have any additional questions, don’t hesitate to contact your MEA representative at 619-264-6632.

EXECUTIVE SUMMARY