Mayor’s Presentation of Budget Guidelines and Proposed Millage Rate
July 21, 2008
City Council Chambers

Good Morning Commissioners,

For the last five years we’ve struggled to maintain a balanced budget without raising taxes.
We’ve done so by making extremely difficult decisions. This year brings additional challenges.
We are facing an extremely difficult budget year as a result of a decrease in sales tax, an increase in energy costs, an increase in the cost of employee healthcare and state-imposed revenue reductions because of amendment one.

So, we are essentially proposing a continuation budget with the exception of our public safety initiative. Even so, we face a 30 million dollar gap we must still overcome. Commissioners, with your input and guidance, we are recommending a plan to meet our budget challenge. It’s a sensible and strategic solution that will:

• Keep us safe
• Maintain our high quality of life
• Create opportunities for our families to succeed …
• And still give the vast majority of our residents a reduction in their property tax bill … even in these challenging economic times.

The focus of our budget recommendation is Orlando’s families.

As our national economy slumps, Orlando’s families struggle with the rising cost of gas, food, healthcare and daily expenses. When families budget during trying times, they look for creative ways to save a buck wherever they can. But, at the same time, our families also have projects they’ve started… and long term goals to accomplish.Our families know that they must balance the needs of today with the goals of tomorrow.

The same holds true for our City. Just like local families, our City government must make sacrifices and tough choices to bring our budget in-line today … while still investing in the future and ensuring Orlando stays on track for a better and more prosperous tomorrow. That’s precisely what our plan accomplishes.

THE PLAN
The strategy I am recommending today includes a combination of the following:

1. Cuts to City services
2. Efficiency measures
3. A withdrawal from our reserves
4. And, a modest adjustment of the millage rate resulting in a rate lower than any year for the last two decades except for last year.

The first part of our plan is a top to bottom review of all our city services and programs to find areas where we can save money by making strategic cuts and budget reductions. This is NOT “cutting the fat,” as the saying goes. Since 2002, our City has cut costs at nearly every opportunity. We eliminated more than 250 jobs in 2003. Every year since then, we have increased our service levels… and decreased the cost to residents for those services.

Today we have fewer employees per citizen then we did 10 years ago. We are doing more with less. Our finance department will present this historical overview in greater detail – later this morning. But, the short version is – there wasn’t much to cut. Our plan includes some difficult choices:

• Eliminating all holiday bonuses for City employees.
• Reducing landscaping and mowing schedules city-wide.
• Cutting our training and travel budget for all city employees by 15 percent.
• Closing community and recreation centers with low usage on Saturdays.
• Reducing all holiday decorations by half.
• Reducing the Fire Department’s public outreach budget by 50 percent. This means cutting health checks for seniors, health fairs, school presentations and smoke detector checks.
• The Mayor’s office is not exempt. At the highest level of the organization, I am eliminating a director level position from my cabinet and another management position.

These are just some of the savings measures we have identified. Rebecca and Ray will provide more examples and greater detail. When you look at these cuts you understand the difficult decisions we must make. All of these items we have targeted are important – and the absence of each will be felt both here at City Hall among our staff and in our community.

The second part of our plan involves continuing to use the efficiency packages we identified last year – with the inclusion of new efficiency measures developed this year.
 
• This includes a challenge to departments to reduce our fuel consumption citywide by 10 percent.
• We are examining what we outsource to more efficiently serve residents.
• Also, all vacancies will be re-examined before being filled.

These department-wide service cuts and efficiencies will help bridge about 14 million dollars of our gap. That still leaves a sizeable amount of money to generate. This is revenue that the city would have, if not for amendment 1 and property tax reform. To cut any further would mean we would have no choice but to make cuts to our Police and Fire budgets.

Commissioners, you’ve indicated this is not an option and I could not agree more.
Keeping Orlando’s residents and visitors safe is the number one priority of our City government.
We cannot sacrifice our safety no matter how great the savings might be.
To go any further would also mean slashing the core city services that people depend on every day.

We owe it to our residents to continue to give them superior service even in tough times.
So, the third and fourth pieces of the plan I am advocating are a blended approach of a reasonable withdrawal from our reserves… and a measured adjustment of the millage rate. Tapping into our reserves is not an action we take casually. Just like the families in our community who make careful withdrawals from their savings accounts in order to make it through tough economic times… our strategy is the right move to help get our budget in-line today… and help us stay on track for a better tomorrow.

Finally, part four of our plan restores the millage to slightly below the rate we had until 2007.
This modest adjustment means our rate will be lower than any year for the past two decades, except last year. Even more importantly, at the rate of 5.65, a vast majority, over 70 percent, of our residents will be paying less in City taxes than they did last year. And – more than 80 percent will be paying less in taxes than they did two years ago.

Our finance team has real world examples of homeowners and businesses in Orlando and what their likely City taxes will be under this plan. Before I hand the podium over, I want to publicly thank our entire finance team, City CFO Rebecca Sutton and Deputy CFO Ray Elwell. They have worked many long hours in helping to craft these guidelines.

I also want to thank all of our department directors for their willingness to make difficult choices in order to help our residents get through these tough times.

Rebecca and Ray are going to walk us through the finer points of our budget recommendation…
They’re also going to detail some of the important projects that will remain on track because of our budget prudence this year.

• Continuing year three of the public safety initiative putting 25 additional police officers in our neighborhoods
• Ensuring our streets are maintained and our children are safe on their way to and from school – by funding our school safety sidewalk program
• Helping to maintain livable neighborhoods with dedicated traffic-calming funds in each district
• Giving our firefighters the replacement gear necessary to perform their jobs at the highest level
• Making sure families on the edge have a safety net. During tough economic times we remain committed to our regional plan to end homelessness. We are directing housing dollars for rental, utility assistance and transitional housing.

WHAT DOES THIS MEAN FOR ME?
As we prepare to make our plan a reality, the question our residents have is, “What does this mean for me?” In our effort to be as open and transparent as possible – we want to provide residents with the most accurate estimate of what their city taxes will look like under our plan.
Beginning this week, home owners will be able to go to the City’s web site and do this calculation for their individual properties.

They’ll also be able to access a fact sheet with clear, easy to understand answers to other questions they might have about this year’s budget process. Our technology management staff has worked tirelessly to get this calculator on the web. I can’t thank them enough for their hard work.

Commissioners, I know this City Council does not take the decisions we are making today lightly. To put it bluntly, finding a solution to our budget challenge in this new, post-Amendment One era … comes down to two choices:

We can be the City Beautiful…
Or, we can be the City Ordinary.

We can make tough, smart choices that sting in the short term… but keep us on track for the long run. Or, we can surrender and be a city that lays off police officers and firefighters, that closes parks and community centers… a city where quality of life plummets and no one wants to visit.

I believe we’ve crafted the best solution possible to overcome these challenging economic times and deliver a balanced budget. It’s a plan that serves our families and gives a majority of home owners a reduction in their property tax bill while keeping our core city services intact. It’s a plan that keeps our City on a path toward becoming the next great city of this century. 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 2008/2009.  In September, we will hold our public budget hearings and formally adopt our budget.