“Some will say the revenue projections are low. They say, if the revenue forecast was increased, more programs could be funded. That’s an argument based on Tomfoolery,” Leigh wrote in his weekly newsletter.
“There should be no argument that the city’s revenue projections are low. They aren’t,” he added. ” There is too much empirical data and 3rd party verification for this issue to be drawn into a political argument.”
Leigh also makes the argument that the city’s transit system will have to be downsized in the future.
“Some folks wish to inject millions of one-time dollars into transit this year. I oppose that idea,” he wrote. “It’s unfair to create a false sense of long-term programming that’s unsustainable with one-time dollars. We need to think and plan strategically.”
In an interview, Leigh said the city should come up a “permanent grid” that can be funded every year.
“I’m proposing to reevaluate the exiting grid and that we should develop a grid that’s appropriate for the size of population we need to serve,” he said. “That will probably be a downsized grid but one that will offer more services inside that boundary.”
In the long run, he said, people who want transit in Colorado Springs would have to live along transit routes.
“Here’s the change in the paradigm: What we do is we reach out and try and provide routes to where people live. That paradigm is wrong. It’s backwards. We should provide routes and then people that want to use public transit should move to where the routes are,” he said.
Here are excerpts of Leigh’s newsletter:
Revenue Projections Some will say the revenue projections are low. They say, if the revenue forecast was increased, more programs could be funded. That’s an argument based on Tomfoolery. The math is the math. You cannot create more money than there is (unless you’re the Federal Reserve or its evil twin, the Federal Government). There have been 3 separate groups, The City Committee, The Biggs/Kofford Report and the City Budget office who all agree with the revenue projections. There should be no argument that the city’s revenue projections are low. They aren’t. There is too much empirical data and 3rd party verification for this issue to be drawn into a political argument.
The Fund Balance The Government Finance Officers Association (GFOA) recommends municipalities accrue a surplus account (called The Fund) of 16.5% of its annual budget. In our case, that’s approximately $37,000,000. That’s typically enough to fund the city’s business operations for 60 – 90 days. Before national, state and local economies became suspect, the GFOA recommended a Fund balances in the 7% – 13% range. Their recommendations reflect a cautionary mood, pointing out that the portion of municipal funding that came from superior sources (the Feds, the state, etc.) will dry-up as the economy falters and as the Feds deal (or no deal) with the national debt crisis. It’s widely believed that many grant and other “free money” programs will disappear and will no longer be available to municipal governments. Municipal governments have to become self-reliant and will need to have a ready stock of dry powder to maintain itself against systemic environmental hazards.
The Contingency Reserve It used to be common practice to create a budget that would anticipate rehiring full-time employees (FTE) who had been furloughed because of general budget cuts. The 2012 budget as proposed does not do that. This budget calls for salaries for existing FTE employees only, and doesn’t anticipate hiring new FTE’s in this cycle. The excess funds in the former process amounted to millions. Since they are no longer available in this budget, the Mayor created a contingency reserve (and legitimately calls-it-out as a contingency reserve) of about $1,000,000 which will be available for emergency and unforeseen budget needs. This reserve account will be called into question on 2 fronts; 1) whether the Mayor has the right to a contingency reserve and 2) whether these funds should be kept in reserve or if they should be deployed for programming.
Funding Programs Some will want to fund programs out of special interest pressure or ill conceived ideology. Instead of funding various programs on an ad hoc basis we should be looking for long-term, sustainable solutions. That means, in the short run some programs won’t receive special consideration or funding at the level they’d desire. That also means, in the long run all properly funded programs will be healthier.
Post Script As I’ve contemplated the budget in our new governance model, I’ve concluded that, while council must review and adjust where needed, grossly amending the Mayor’s budget implies we don’t trust him or his Staff to do their job. Councilors should interface with the Mayor and Staff throughout the year identifying financial priorities so the budget process becomes a simple exercise of process not a political battle run rampant by emotion, ego and dogma.
I support the Mayor’s and Chief of Staff’s budget. I support the conservative nature of the budget because I’m wary of the potential economic tsunami many predict on the national level. The implication is the loss of grant and free money programs at the local level. The further implication is the loss of sale and property tax revenue attendant with declining spending and real estate valuations. This ain’t rocket science, folks.