Issue December 3, 2008

City seeing red

In balancing the budget, sweeping cuts in services are just the beginning

The first round of spending cuts to help fill the city’s $20 million budget hole will include eliminating street paving through June, closing libraries and community centers one day a week, drastically slashing arts funding, and reducing spending in the Neighborhoods Department by 11 percent.

These are just a handful of Mayor Jerry Abramson’s proposed cuts in services, which will save $3.4 million by the end of the fiscal year on June 30. The mayor is expected to announce further cost-cutting measures this week, as the threat of layoffs still looms.

“I know these cuts are painful — and I am pained to make them,” Abramson said at a Monday afternoon press conference. “We are in very difficult economic times that require difficult decisions.”

Melissa Mershon, director of the Department of Neighborhoods, says the majority of cuts at her agency — totaling $527,000 — affected unfilled positions that will be left vacant.

“While painful, we’re all trying to find cuts to balance the budget that will not hand someone a pink slip,” she says.

The mayor is continuing to talk with union leaders about trimming their budgets, saying every agency must help the city get through its worst economic crisis in nearly three decades. Unions represent nearly 75 percent of Metro’s 6,000 employees.

But after meeting with the five major unions last week and asking all employees to give up annual 2 percent pay raises — along with a combination of other proposed savings measures — Abramson faced opposition, prompting him to reiterate that without cooperation, Metro government could see up to 200 employee layoffs.

Last week, the Louisville Fraternal Order of Police voted unanimously against a $1.3 million cost-savings proposal, a combination of losing vacation, forgoing raises and paying more to use take-home cruisers. The Louisville Metro Corrections F.O.P. followed suit, rejecting a similar offer of three days of unpaid furloughs and rescinding a 2 percent pay raise.

“The employees are being held accountable for the shortfall, which concerns me as a union leader and taxpayer,” says Tony Harris, president of the corrections union. “We’re OK with giving up something and it’s a good possibility that we would. But we’d like to explore other options first.”

The unions have taken a hard-line position, pointing out that the city is shelling out millions on development while asking Metro employees to sacrifice.

Craig Willman, president of the Louisville Professional Firefighters Local 345, says city firefighters plan to ask the Metro Council to save money by halting unnecessary capital projects.

“Even if they get this money from the public safety unions, it’s only a drop in the bucket,” he says. “They’ve got to make up $20 million. There has to be something larger.”

Opting to explore alternatives, the firefighters union so far has refused to vote on the mayor’s proposed cost-cutting options. Willman says it is unreasonable to ask union employees to forfeit pay raises and take unpaid furloughs while the city invests in projects like Center City.

In early November, the Metro Council approved a $17 million sweetheart deal to develop Center City, an extension of Fourth Street Live. The city plans to buy the Louisville Water Co. Block and then lease the prime real estate to the Cordish Cos., a Baltimore-based developer, for the bargain price of $1 a year for 99 years. Willman says the council and Mayor Abramson should be held accountable for that decision.

“If the budget was so bad, why did we approve this $17 million deal,” Willman says. “And then if the unions don’t agree to these options, (the mayor) threatens to lay off city workers that don’t have a union — that’s just not right.”

The mayor has rebuffed suggestions that the city should yank money from capital projects, saying once the cloudy economic days pass, the city needs those investments to launch itself back into the unforeseen boom.

Though union leaders wince at the mayor’s proposals, not all agree capital projects should be on the chopping block.

“I’m mixed on that,” says Denny Norris, president of Teamsters Local 783. “If we don’t continue to grow, we’re going to die on the vine.”

Norris represents about 825 Metro employees in public works, sanitation, Metro Safe, and civilians in the corrections and police departments. The Teamsters won’t finalize their vote on the mayor’s proposals until Monday.

And while Norris acknowledges union employees are already doing more with less, he says failing to invest in the city’s future could make a bad situation worse.

“I don’t believe we should simply sit still,” he says. “If we do, we’ll start losing people. Another exodus into (surrounding) citiesand I think police and fire and EMS and Teamsters aren’t going to have anybody left to protect.”

Mayor Abramson has seven months to balance the projected $20 million shortfall before the end of the fiscal year. He says he does not plan to hike taxes, raise fees or dip into the city’s $60 million rainy day fund, because doing so could lower the city’s bond rating. Combined with the first round of service cuts, however, Abramson’s quick unilateral decisions — a hiring freeze, spending restrictions, three days of unpaid furloughs and pay cuts for his highest-salaried personnel — to squeeze Metro for any loose change are not enough.

The mayor says cooperation from the unions could save the city an additional $2.6 million, but even if the unions acquiesce, the city still will be at least $12 million short.

Abramson wants to continue conversations with union leaders about savings options, says Chad Carlton, a spokesman for the mayor. On Tuesday, the mayor met with the police union.

“Everyone is going to have to participate,” says Carlton. “It’s a challenge and it’s too big of a bite to swallow without everybody sharing in the responsibilities.”