City Council discuss the FY21 proposed budget and potential cuts provided in this memo.  Council should also consider options to move eligible expenses out of the General Fund to Park District 1.  My goal is to have the Council adopt a FY21 budget where General Fund and Public Safety Fund revenues are equal to maintenance and operation expenses.  This can be accomplished through a combination of budget cuts and increased revenues (including the voter approved levy).

Council Direction: At the work session on June 1, 2020 voted the City Council directed staff to:

“Ask Chris to come back with a budget that assumes the $4M is passed by the public and to bring a budget that reduces it $3.5M, $1M of that would be out of the Lean Six Sigma, then he has $2.5 that we need to come up with some other way, if we have to use reserves then we may. At the same time leave PD1 at $2M.”

City staff directed their focus on the General Fund and Public Safety Funds (GF&PSF), as the deficit is jointly within these two funds. Additionally, on March 9th, 2020 the City Council adopted the 2020 priorities. Over the past two years, “Improve the safety of Billings” has remained the City’s #1 priority.   Consistent with our priorities, we sought to minimize the direct impact on public safety.  As a reminder, in Fiscal Year 2020, ~80 of the GF&PSF is public safety and ~9% is Parks, Recreation and Public Lands (PRPL). 

I also asked directors to avoid recommending cuts that are simply pushing costs into the future.  As an example, you don’t see the option to cut $250,000 from the fire department budget for differed maintenance projects.   We are in the second year of a three-year plan to repair deferred maintenance projects across our seven fire stations.  Yes, you can save, $250k this year but you may have to spend $275k next year by continuing to postpone the investments.  Similarly, the Parks department was asked to consider cost saving measures that would be temporary.  As an example, restroom facilities can be “moth balled” in such a way that they can be reopened in the future with limited long-term effects. 

It is also the case that in FY20 ~74% of the GF&PSF are personnel expenses, therefore, it is difficult to cut millions of dollars from the budget without reducing workforce.  These jobs exist to provide services therefore, we want to be clear on what services we stop providing rather than an approach of cutting across all programs or services equally.  I want us to be great at what we do, rather than mediocre at everything we do.  Attached is the list compiled by staff to accomplish the direction from City Council.
 

Budget Reductions:
Administration
Removal of Public Information Officer	143,000
Removal of Lean Six Sigma	759,000
Removal of Center of Public Safety Management (CPSM) Analysis	150,000
Director level salaries	35,000
Total Administration	1,087,000

Administration Impact - Cutting these expenditures eliminates the proposed Public Information Officer, and no additional money will be budgeted for Lean Six Sigma/operational efficiency training.  Any dollars spent on Lean Six will have to come from direct cost savings.  I encourage you to consider retaining the analysis from the CPSM.  This data analysis will guide our strategies to improving the safety of our community and significantly improve our effectiveness to respond to emergency calls for service.  The salary decrease of $35,000 is equal to the COLA increase for the directors, assistant city administrator and city administrator.

 

Parks & Recreation
Asset Management Coordinator Position	105,000
Buckthorne Removal	70,000
Cemetery Software	40,000
Senior Center Fitness Equipment	4,000
Website Update	8,500
Temp wages	349,800
Cemetery Temp Wages	20,000
Forestry Temp wages	40,000
Janitorial Supplies	8,000
Other Operating Supplies	20,000
Fuel	20,000
Motor Vec. Parts	20,000
Electricity	20,000
Labor Motor Vec.	20,000
Maintenance Services	10,000
Forester Position	84,500
Other Contract Services	40,000
Senior Center Closure ($36K in revenue - $240K in expense)	204,200
Batting Cages ($32K in revenue - $32K in expense) leave open	-
Aquatics - Pools & Splashpads ($241K in revenue - $348K in expense)	107,000
Total Parks & Recreation	1,191,000

 
Parks & Recreation Impact – In order to reduce the Parks Department budget by this amount, it would require elimination of 109 seasonal positions and 5 full time positions. As a result of these position reductions, the City would experience a significant change in services. Due to lack of staffing, the Parks and Recreation Department would be unable to facilitate and will be forced to eliminate the following facilities and services:

1. Rose Park Pool, South Park Pool, and wading pools at Hawthorne and Pioneer park
2. All spray grounds (South, Castle Rock, Terry, Highland, and North Parks)
3. Batting Cages
4. Billings Community and Senior Center
5. All 23 restrooms in every park
6. Reduced irrigation in parks with the goal of preventing trees and landscape from dying
7. Reduced mowing to once every 2 to 3 weeks
8. Elimination of herbicide application and fertilization program
9. Dramatic impact to the future of the Urban Forestry program that includes safety inspections, Emerald Ash Borer mitigation, storm damage repair and prevention.
10.  Daily trash removal by park maintenance staff
11.  Non-profit organization’s Community Events used as fundraisers that support their missions
12.  Park permits and shelter rentals used for family reunions, company picnics, wedding receptions
13.  Current level of maintenance for Park Maintenance Districts (37 active) will be impacted similarly as to community parks (this will ultimately lower the cost of Park Maintenance District assessments)
14.  Elimination of City’s Weed Abatement program in conjunction with Code Enforcement

 

Fire
Reduce Fuel	8,000
Reduce 8 Fire department personnel	585,340
Total Fire	593,340

 
Fire Impact – This reduction in firefighting staff would mean reduced hours, or partial closure, of a Fire Station as staffing a station 24/7 would not be possible.

 

Police
Reduce jail charges	150,000
Reduce fuel budget	30,000
Reduce 6 police department personnel	413,340
Total Police	593,340

 
Police Impact – The reduction in jails charges means the Police Department would not take people to jail who only have municipal infractions (Open Container Violations, Outstanding Warrants, etc.).

Finance Policies – On February 22nd, 2010, City Council adopted Resolution No. 10-18914 creating minimum fund balances and establishing policies defining how to best use General Fund reserves (attached).  As many of us are so new to the City, it is worth our time to review these policies and use them to help guide our decisions during these challenging financial times.  In resolution 10-18914 it states:
Conclusion: My goal is to provide the Council with enough information to adopt a financially sound budget consistent with Resolution 10-18914 (operating costs are equal to, or less than revenues).  By showing you $3.4 million in reductions, you can see the effects of cutting expenditures enough to balance the budget.  You also have the option of moving $3.4 million of eligible expenses out of the GF and over to Park District 1 (PD1), or a combination of the two.  By taking these difficult steps in combination with a citizen approved repeal and replace of Public Safety 2 ballot measure, we will have fixed our structurally unsound budget.
 

Does not apply at this time.

Administration $1,087,000 Parks and Recreation $1,191,000 Fire Department $593,340 Police Department $593,340 TOTAL $3,464,680