March 9, 2011
Whoever becomes the next Mayor of Rochester will face a difficult budget process which will already be in progress. Unfortunately there is unlikely to be a solution to the huge $50 million deficit we are facing. One of the possible solutions to this is to seek additional money from Albany. Carlos Carballada, our acting mayor, has already started pleading with Albany. Unfortunately he is asking for very little.
If we are hoping for Albany or Washington to solve our financial problems then let’s ask for real long term solutions. I would ask for single payer health care. Single-payer on the national level would save the city almost $19 million and even on the state level it would save $13 million. To cover pension shortfalls I would suggest the state keep the stock transfer tax and apply it to cover the system's shortfalls. The transfer tax is a very small levy on stock transactions. This tax generated over $16 billion last year, but we rebated the entire tax back to the banks and large brokerage firms that we collected it from. Keeping a portion of this to cover stock shortages in the pension fund seems to make sense and be a better way of keeping it solvent rather than charging localities for the market's failures.
Unfortunately, these are unlikely to happen so we have to solve the budget locally and there are a few principles I would like to follow where ever possible. Primarily, staff and benefit reductions should be the last thing considered and services which help the poor and the most needy in our society should be touched only after services which help the well-off. It also must be remembered that I have not been involved in this year’s budget process.
As such, I have to rely on published material so my calculations may require some adjustments once I'm in office. In some instances here, I have had to make some estimates but I feel the people deserve as specific of a plan as possible from all the candidates. With this in mind, it is time to get to the numbers.
Presently our deficit includes a $12 million charge to repay reserve funds which were borrowed by our previous administration. While I consider a healthy reserve a good thing we may not be able to achieve this when the budget problems are so great. We also are budgeting $12 million for projects which our previous administration committed to and many of these seem to be little more than pay back to campaign donors. While I can not presently say I would cut all of these it seems that at least $8 million of this is avoidable.
The
2008 checkbook was published online for a short time and it showed a lot of spending for many items which seem unnecessary. Now these may be funded by grants or might have a use but there are a lot of questionable expenditures like $122,000 to the Department of the Army, $24,000 to Rite Aid of NY, and $15,000 to Brad’s Cookie Nook. There are also expenditures on golf, checks to companies owned by city employees, and a lot of checks to big campaign donors. In total, there were $211,306,298.21 in checks written and while much of this may be acceptable, it does not seem unreasonable that there is at least $10 million of waste as this is less than 5% of what was spent
There are also a lot of purchases in multiples of $10,000, which is important because these do not require a request for purchase. While city codes may allow this, this is very wasteful. A 5% in savings in reduced costs paid by better purchasing regulations seems reasonable as well but there may be some overlap with the expenditures I referenced above. It appears as though there is at least another $5 million here.
LED lights use a fifth the energy and last 10 times longer than what we use now. Early studies showed that LED lights were not practical for this kind of use, but technology has caught up and a number of cities have gone to them. To replace our present street lights with LED lights would save $2 million a year but with an initial cost of $3-6 million which we should be able to bond.
There are also a number of savings which could be done to reduce energy costs. Buffalo was able to save $70,000 just by turning off lights and computers in their buildings at night. There is at least $100,000 of environmental savings just like this which cost almost nothing to implement. Our tickets are presently handled by a special court under the Municipal Code Violations bureau. If we did not do this, the tickets would be dealt with in a court paid for by the county and this would save us over $1 million.
Using the conservative estimates above, the savings in my plan is now between $38 and $47 million. To deal with the rest of the budget gap, we need to consider staff reductions. Both the City and City School District serve the same people and we are both short of funds. Both organizations have HR, communications, budget, finance, IT, and legal departments. The consolidation of these departments could save up to $11 million, counting benefits.
Presently the city uses the Neighborhood and Business Development Office to handle a number of essential functions like planning, zoning, and inspections. They also operate the NSC offices. Much of the work done by this department is a creation of their own making. Our present method of zoning and enforcing codes creates the substantial work. If instead we are more permissive, used a complaint system for inspections, and do not require permits for things the codes permit then we would need fewer people to administer these codes and then could reduce the staff and save around $5 million.
Of course the final step is to grow the economy and to grow Rochester so that we will not have this problem again and that is the subject of other posts.