Office of the Mayor
Mark Funkhouser
29th
Date:
To: Wayne Cauthen
From: Mark Funkhouser
Subject: July 16 Memo to City Council
On July 16, you sent a
memo to Deb Hermann and members of the Finance and Audit Committee. In it you identify a potential $10.3 million
budget shortfall, even though we are not yet at the end of the first quarter of
our financial year. At this pace, we
might well be looking at a $60 million shortfall by the time we’re adopting
next year’s budget. As such, I have some
questions and concerns.
I would like to know
more about the total $2 million in expenditures for city and police
consolidation. These are decisions that were already made by the City Council
and I when we adopted the budget. Is their inclusion in this list of
expenditures an indication that you intend to not follow our policy direction
with regards to the budget?
I am also very
concerned about your stated intent to lift the hiring freeze. I don’t
understand what you mean by “intent?”
The Council and I have adopted a budget which calls for a hiring freeze
of 245 positions. That is a policy decision we have made. I would hope that your intent is to carry
through on policy as it is adopted by the Mayor and City Council.
Moreover, you have not
reached the level of hiring freeze that the Council and I called for. According
to your tally of staffing changes, 190 positions are currently vacant due to
the freeze. This is 55 positions below what is mandated by the adopted budget.
Meantime, you have chosen to address the budget’s requirement for an elimination of 140 positions primarily through attrition
and by not filling vacant positions.
This seems less a strategic staff reduction than a long-term hiring
freeze. The number of staff reductions totals 157 – an apparent increase over
what was called for in the budget. However, 40 of these are transfers to other
departments in the city which are not supported by the general fund. Clearly
this is not a real cost savings to the taxpayers. It is little more than an
accounting trick.
That said, I agree
with you that a hiring freeze is not the best way to realize cost savings
through staff reductions. You are
correct in stating that the cuts are randomly disbursed across the organization
and can disproportionately impact certain programs and services, such as animal
control and vacant lot mowing. These are
low-paying positions with inherently high turnover rates.
A better approach would
be to make strategic choices through efficient and effective management. In my
budget memo dated March 12, I explained the proposal to eliminate positions as
follows:
Our city
government has a high number of middle managers and a significant number of
layers of supervision. In fact, previous studies have shown that the most
frequently occurring span of control (the number of subordinates reporting to
one supervisor) in city government is three. Eliminating 220 positions would leave
the total number staff at 5,472, about 8% above the 2003-04 level. The focus of
the position eliminations should be on increasing the span of control and
reducing the number of management layers in the government.
I believe that this
articulates the intent of the City Council when we passed Amendment A calling for an elimination of 140 positions and a freeze
of 245. Otherwise, we wouldn’t have stipulated two separate line items – one
for strategic, permanent organizational cuts to produce long-term savings and another
for more arbitrary cuts for short-term savings.
In other words, City
Council and I did not adopt a budget requiring you to minimize the number of
actual lay-offs. Instead, we adopted a
budget requiring you to free up the maximum amount of money for our priorities.
Instead of shifting money around to de-freeze positions, you should make
strategic staff reductions and use the money freed-up through new vacancies to
fulfill our priorities. In addition,
some of this the freed-up money should be set aside to prepare for expenditures
that the city manager is expecting to increase, such as, employee health
insurance and fuel costs.
CC: City Council