News
Statewide Revenue Decreases Cause City Budget Reduction
As previously announced, and as has been seen throughout the
country in other cities and states, the City of Tulsa announced it
will tighten its budget by further reducing its expenses in order
to meet a projected revenue shortfall.
The City of Tulsa reported in October that sales tax revenue
declined sufficiently to necessitate a second series of budget
reductions, to be made immediately. Prior to finalizing the
original budget submission in May, all City departments were asked
to identify measures to reduce expenses in the event revenues fell
short of expectations. A decline in sales and use tax
reported for October triggered this second set of reductions in the
General Fund.
All Departments identified at least 2.5% additional reductions
in General Fund spend categories. All reductions are being
made with an eye toward minimizing the impact to citizens, said
Mayor Kathy Taylor.
Both the Police and Fire Departments will eliminate spring
academies, saving nearly $700,000 in general fund spending, and
will implement other reductions by delaying equipment purchases,
eliminating certain specialized allowances and continuing to manage
overtime. However, Police will request to retain 18 officers by
using the COPS grant. Application has already been made to the
Department of Justice. Public safety will not be jeopardized and
the vital core services our citizens rightfully expect will not be
interrupted, Taylor said. In addition, to the 18 officers expected
to be re-hired, nine officers in specialty assignments will be
assigned to patrol.
The goal is to make a minimal impact to the sworn workforce by
using COPS and SAFER grants to pursue retention of existing
positions.
Many vacant positions will remain unfilled and there will be
positions in certain city departments that will be eliminated.
Employees whose positions will be eliminated will be provided first
consideration for vacant positions within the City, and Workforce
Tulsa will assist displaced employees through its job placement
services. Taylor said City officials are notifying affected
employees about the reductions and will provide more detailed
information on the eliminated positions when the notifications are
complete.
"Based on the information we have to date, these decreases in
spending should allow us to maintain a balanced budget through year
end," said Mike Kier, Finance Director. "Departments have done an
excellent job of managing expenditures including overtime, during
the first quarter of the year. I am confident they will
continue this discipline in the management of their spending".
All Departments that rely on the general fund, which is used to
fund salaries, materials, training and equipment, will reduce
spending. Reductions will also effect available funding for
River Parks, TAEMA, Tulsa Transit, INCOG and other third party
contracts.
General fund revenues saw a serious decline in the most recent
reporting period. The primary source for the general fund
which serves to support the operations of the City is the 2 cent
sales tax collected within the City of Tulsa. In addition to
declines in sales and use taxes, a cooler than normal summer and
lower energy prices resulted in a drastic reduction in franchise
fees.
Enterprise fund revenues from water, sewer, trash and storm
water charges remain healthy.
Taylor said property valuation in the city of Tulsa topped $3
billion for the first time.
"This is an increase in property valuation of more than 4%. If
our operating fund was supported by property tax like the County,
we would be seeing an increase in revenue instead of a decrease.
This further underscores the need for Tulsa (and other cities in
our state) to have a more diversified revenue stream," she
said.
None of the funding for major projects, such as the Drillers
Stadium, comes from the general fund. Drillers Stadium will be paid
for entirely through the business improvement district and private
donations.
The expenses associated with operating City Hall at One
Technology Center are paid for through the OTC building fund. There
was no increase in the general fund budget for the purchase or
maintenance of OTC. As the result of the purchase and relocation of
City Hall the cost of operating five building were consolidated and
transferred into the OTC Building Fund. The only expenses that have
increased are tied to the rate increases obtained by the utility
companies and would have been more significant had the purchase of
OTC and consolidation of operations not occurred.
City management has scoured their departments looking for any
viable cuts in the operating budget. By making significant
cuts in equipment ownership and usage, virtually eliminating
training paid for by the general fund and our continued high
performance government efficiency processes, our team has, to the
extent possible, minimized the reduction of services and
abolishment of positions within the city.
"The actions taken by our team over the past two years include
eliminating the subsidy on golf courses and entering into a
management agreement with TU for the Gilcrease Museum, as well as
dozens of other efficiency initiatives, have placed us in a much
better position than we could have been," said Mayor Taylor. "Our
team has placed a priority on efficient use of taxpayer dollars
which has enabled us to be prepared for this difficult
economy."
The Mayor also requested that Fire Chief Allen LaCroix lead a
review of all vehicles owned by the City for reduction of
underutilized vehicles. As a result of the review, over 220
vehicles will be surplused. This will result in an estimated annual
savings of maintenance and fuel of approximately $150,000 and
one-time revenues from surplused vehicles of approximately
$300,000. The Mayor will ask the City Council to support a policy
to recommend that all one-time funds from this surplus sale be
retained to support short term capital needs in years 2012 to
2014.
"I am once again proud of this management team as they wrestled
with hard decisions and made difficult choices. We must
review the restrictive method in which our state allows cities to
fund the most basic services for our citizens," Taylor
said.
