Local & Regional
Thu April 26, 2012
City Budget Released/Read Mayor's Plan
Tulsa Mayor Dewey Bartlett goes before the Tulsa City Council to present his proposed 2012-13 city budget. The spending plan tops out at just over $703 million. If approved, it would be the largest city budget in Tulsa history.
The budget is up $53-million over the current city budget. A large portion of that increase is in capital budget. That increase is brought about by the work promises and paid for under the 2008 Fix Our Streets initiative.
The budget transfers $2-million to the city’s new rainy day savings account. It also contains training funding for police rookies.
The Tulsa City Council will now review the plan and can make changes to it. The plans must be in place by the start of the fiscal year on July 1st.
Read the Mayor's Address:
Budget Presentation to Tulsa Council on April 26, 2012
By Mayor Dewey F. Bartlett
Councilors, good evening.
It’s my pleasure to bring to you a budget proposal based on collaboration and based on the priorities identified by our first citizen survey and the Mayor and Council’s visioning retreat. This budget request reflects both the priorities of our citizens and the shared vision and goals of our elected officials. It is a true collaborative effort. This shall be named “The Budget of Collaboration.”
This is also the first year we’ve extensively connected departmental goals to the overarching vision in our report, featuring symbols placed next to each department goal that corresponds with a citizen or Council/Mayor priority.
Our budget priorities are placed into six categories: Public Safety, Economic Development, Beautification, Transportation, Government Efficiency and Citizens’ Priority.
I’d like to take a moment to thank the Finance Department for producing a document that will surely win awards, once again. Mike Kier and his merry band of budget analysts worked late hours during the budget season to ensure all requests are intact, reviewed, vetted, and re-vetted. I present you with a balanced fiscal plan for the next year using our shared vision and Tulsa citizens’ priorities as our guide.
We are now becoming able to responsibly absorb the increasing costs of doing our City’s business. That is largely due to our conservative approach of sensible prioritization of spending and enacting our efficiency opportunities.
As a result of the a combination of revenue growth, conservative spending and efficiencies, we have the capability to absorb $2 million in expiring public safety grants and hold a police academy of 40 cadets this summer. Following the suspension of the academies in FY 2010, we’ve had two academies in each of the past two years. We are now proposing funding of the fifth. If revenues are higher than anticipated in the upcoming fiscal year, we will consider adding a second police academy.
We will make our first contribution to the new Economic Stabilization Fund – also known as the Rainy Day Fund – of $2 million – an amount that is more than double the requirement. That is a very significant, if not an historical step.
Since 2010, a total of six grants have been used to hire 95 police officers and six crime analysts over three years, between FY 2009 and FY 2011. In addition, we accepted the SAFER grant which funded 46 firefighters. These grants are beginning to expire. We knew the day of reckoning for receiving these grants would come, and here it is. By our acceptance of the federal grants, we made a commitment to continue paying the compensation packages for those officers and firefighters after the grants expires.
That commitment will have a cumulative effect of covering $8.6 million through FY 2017. We have budgeted $2 million to cover the costs of the expiring public safety grants in FY 2013, and budgeting will continue each year as grants expire.
Police response has improved since Tulsa Police Chief Jordan reinstated the beat system in early 2010. That placed our officers in smaller geographic areas. Community relations have improved in our neighborhoods, and the TPD has returned to a higher level of response to break-ins and thefts. Violent crimes declined from 2010 to 2011 as Chief Jordan efficiently managed the boots on the ground.
We are working toward more efficiencies, by civilianizing positions, so that we can get as many sworn officers as possible out on the streets. And finally, this proposed budget also funds the first Tulsa Police Reserve Academy in four years. The Reserve officers have much of the same training as sworn officers receive, and they serve as volunteers. The Reserve academy proposed would fund 40 reserve officers.
The Fire Department, led by the not too shy but unfortunately retiring Allen LaCroix, has a history of managing its resources very well. They’ve made sacrifices when asked, and they’ve found innovative and efficient ways to do business. The recent Mutual Aid Agreement with Broken Arrow is a perfect example. With this agreement, we saved hundreds of homeowners significant money by reduced insurance premiums. We also avoided building a new fire station to house an Engine Company for Tulsa alone. This agreement represents an annual savings of $1 million for the City of Tulsa.
We will be welcoming a group of 23 new firefighters who will graduate from the Academy on June 29 of this year. We will officially announce our new fire chief next week. He will have big shoes to fill, but I am confident he’s up to the task and look forward to working with him and his management team.
Through government efficiency, we are proposing to increase our operating reserves to $17 million and make an initial investment of $2 million into the Rainy Day Fund. Do we foresee “rainy” days ahead? I wish I could stand here today and paint a more sunshine-y picture for you and our citizens. As you know I’m normally very optimistic; however, I will always approach this job with a realistic and conservative point of view.
The City’s revenues have certainly improved over the past two years. We anticipate decent growth in the general fund, an increase of about 3.7 percent in sales tax collections in the next fiscal year. Even though our receipts are up, we don’t want to get carried away with the moment and throw caution to the wind. Past spending decisions based upon a moment in time rather than realistic projections have given us heartburn. We must remain vigilant and conservative with this budget. We still have major uncertainties in our path – three at the least:
1) The Oklahoma economy. Our economy has stabilized because of the present level of crude oil prices, but natural gas prices are weak, and will remain weak for the next few years in my opinion.
The Supreme Court’s decision regarding the future of health care delivery will also have a wide ranging effect upon all of our businesses and, of course, our government’s costs of operation.
2) The closing of the United States Postal Distribution Center. We still don’t know how many people will lose their jobs. Whatever the amount is, there will be a significant ripple effect upon affiliated businesses.
3) American Airlines. The bankruptcy reorganization and a wide-ranging potential loss of jobs is a major concern. The initial announcement was for 2,100 employees to potentially lose their jobs. There are still some very significant unknowns regarding the ultimate decisions to be made by the bankruptcy court, the various unions and the management of American Airlines.
Another impact on the General Fund is the reduction in our transfer rate from the Enterprise Funds. This is the amount of money transferred each year to the General Fund from the rate-payer/utility funds, supported by fee payments for trash, stormwater, water and sewer services. The transfer rate is proposed to be further reduced from 7 percent to 6.5 percent. During general fund revenue shortages, previous Administrations and Councils have raised the percentage of transfer to 7.5 percent, with the commitment to lower it at some point in the future. But, for whatever reason, the reduction never happened until we took the first step in the current year. In my view, transferring large portions of utility revenue to the general fund inflates utility rates as well as limits expenditures for necessary maintenance. This is the right time and the right thing to do. When given the opportunity to put dedicated funds in their proper place and reduce costs to the utility ratepayers, we should do so.
We reinvigorated our Parks Department by moving facilities staff from Publics Works to provide more focus on all park-related maintenance activities. That conforms to the guidance of our long-term master plan, recently adopted by the Tulsa Park & Recreation Board.
We are proudly continuing the Fix Our Streets program. The proposed capital program budget is increased from $73 million this year to $113 million for FY 2013. We have begun preliminary discussions for the renewal of a streets and infrastructure funding package, and we will go back to our citizens to receive their input, concerns and priorities.
This budget will continue the quality of life increases we made to the present budget in code enforcement; demolition of dilapidated structures; increased mowing cycles; opening of five public pools; dedicating resources for graffiti removal; adequate salt supplies; and continued fleet replacement with CNG vehicles.
We forecast significant operational costs in health insurance, worker’s comp costs, and all employee pension plans. In order to more effectively deal with personnel costs, we will continue a 2.5 percent attrition rate in this budget. We are requesting that supervisors manage their vacancies to optimize savings.
With this year’s fund balance resulting from higher sales tax collections, this proposed budget funds $10.8 million in one-time activities based upon our collaborative efforts and the citizens survey.
Some of the one-time activities proposed for funding:
1. The 3-1-1 call center system software and consulting assistance for implementation of the 3-1-1 call center; $1.13 million
2. Expansion of the Human Resources Information System: this year we purchased the Time & Attendance module for $1.2 million. We now propose funding of $1.47 million to adding the payroll module and fund implementation costs. With the additional investment, we will consolidate our payroll/timekeeping systems, and increase our projected savings of $2.4 million over a 10-year period of time once implemented. This will finally get us out the dark ages – and into the 21st Century.
3. A $1.6 million contribution to the Employee Pension program. This will clear the previous years’ net pension obligations.
4. Intermodal study: matching funds – $150,000
5. A summer youth program entitled, Bridges of Faith to One Tulsa. There will be $76,000 for the pilot program for youth in the northern neighborhoods of our city. This program is the direct result of our work with Tulsa’s community churches to help provide programs and volunteers to work with youth. On my behalf, Victoria Bartlett is leading my initiatives in this program as well as mentoring efforts in schools, which continue to be received very well.
6. Initial funding for a citywide mobile application – $40,000. A Steering Committee is now involved with the planning and designing of the Tulsa App. Everybody knows that a good Mobile App gives us a significant amount of capability to distribute a wide variety of information and allow citizens to report issues such as potholes and other neighborhood problems.
7. It has been 10 years since the City has conducted a classification study to ensure our employees are classified at the appropriate level. We have been working for several years to bring our jobs up to market rates so we can compete more effectively for workforce. In the next budget year, we have included $325,000 for a Human Resources Employee Class and Compensation Study. We will review City positions and compare compensation with similar positions in the private and public sector.
The City of Tulsa was nationally recognized by the Reason Foundation this year for efficiencies identified by the KPMG study of our business practices, and through initiatives of the Management Review Office. We anticipate savings over the next five years as we pinpoint processes that can be improved and redeploy resources to high-priority services.
Some of the highlights of the MRO’s year are:
EMSA – an ongoing operational review of EMSA’s contracting processes, billing and collection systems.
Metered Parking System – the MRO is exploring solutions and recommendations in an all-encompassing fashion. Next month, a request for proposals will be issued for the operation and maintenance of our system. We will not sell our metered parking system, but I am very interested in having it operated by a third party. This will build upon our economic development plans downtown.
Customer Care Consolidation/311: I anticipate hiring a new director in July. This proposed budget provides $1.13 million for customer relationship management software for the upcoming 311 Center.
9-1-1/ Public Safety Center Communications: non-emergency Animal welfare calls will be switched to Customer Care by May 1. This will hopefully address the Council’s appropriate concerns regarding 9-1-1 calls. We hired a new director agreed upon by the Police and Fire chiefs. To improve our recruiting, starting pay for 9-1-1 call takers was increased. Morale has improved, and turnover has declined. Calls are being answered sooner. The Center is working to hire more bilingual representatives to translate for Spanish-speaking callers.
Fleet management: We have identified capital savings of $1.7 million. As recommended by the KPMG study, we are consolidating two equipment repair shops and creating a second shift to work on city vehicles overnight, which results in significant efficiencies. We also have an intensive review of take-home vehicle policies of our various departments.
Our Workers Compensation system consultants will be giving a final presentation tomorrow to clarify our challenges. The primary focus is the safety of our employees.
We are continuing to look for gain-sharing activities. Additional gain-sharing possibilities are in meter reading and streets maintenance, and we hope to find others. You may recall seven of our City Hall maintenance team members received $3,800 each as a result of doing the job for less than their bid in competition with the private sector. Great job, and well deserved. We look forward to more opportunities to reduce expenses and allow our employees to reap the rewards with money in their pockets.
For years, local engineers and contractors have legitimately complained about the significant length of time to have contracts reviewed and approved. We discovered that the City’s notice of cancellation requirement was a significant reason for that problem, slowing down more than two-thirds of our contracts. New processes for engineering and construction contracts were implemented earlier this month, and the process for monitoring renewals on purchasing contracts will be implemented on May 1. We expect this process will allow us to finalize the contracts at a much quicker pace.
Now I’d like to discuss utility rates. Soon after we received the recommendations of the KPMG report, the Tulsa Metropolitan Utility Authority decided to undertake its own assessment on the water and wastewater operations of our plants and facilities. We look forward to the completion of that report, due to be delivered sometime in June. In the meantime, TMUA is requesting a water rate increase adjustment of 7 percent in order to continue to maintain the system as demand increases. We are very aware that last year, because of the drought, we did get to a point much earlier than anticipated with our system running at full capacity, and the system did not fail. We have to maintain that system to make sure our record remains intact.
The sewer rate adjustment request for FY 2013 is a 9 percent increase in order to pay for debt service and capital improvements. The monthly increase for the average (7,000 gallons in water usage per month) water and sewer customer would be $3.74.
Stormwater fees will remain the same. Trash rates will be based upon the new volume-based voluntary recycling system with a variety of options offered by the TARE board, to be agreed upon by the City Council. The amount a customer pays will be based on the option selected.
In conjunction with our partners at the Tulsa Metro Chamber, this government’s primary focus is creating new jobs and expanding the existing businesses, primarily in energy, aviation/aerospace, healthcare, software, entertainment and tourism.
Our shared focus for job creation is energy, both from local companies as well as companies that should consider locating to Tulsa. The focus is on the traditional oil and natural gas companies, as well as Compressed Natural Gas, alternative fuels and the manufacturing sector involved in all of our energy industry.
The City is creating a demand for Compressed Natural Gas fueling stations and we anticipate that the private demand will increase as well. The recent opening of the CNG fueling station near 51st and Yale by Apache Energy is a very significant example of what we can expect. Since that has happened, we have been contacted by other private companies interested in doing the same. The fact that the differential in price is almost $2 per gallon is not lost upon us.
Other economic development opportunities are a top priority of our government.
o Completion of the Gilcrease Expressway
o Further development of the Arkansas River
o The very visionary intermodal project
This time last year, we talked about hiring a world-class Planning director, and I think you are pleased with our selection. We continue our focus on the comprehensive plan – PlaniTulsa. The small area plans are being identified and researched; form-based zoning is undergoing a lot of fleshing out and that process is beginning.
Finally, we are continuing to emphasize the need to determine the priorities of our citizens on an ongoing basis. We now have a baseline for how we are doing, and how we will be judged. We will follow up with another citizen survey next year.
I look forward to more discussion with you. We have included items that address every one of our collaborative priorities and staff will be available to answer your questions during the next several weeks. Thank you for your time and for your collaborative efforts in reaching a consensus on our Fiscal Year 2013 priorities and vision. I ask your approval of this budget proposal.