Riebeling asks Metro department heads to explore 2 percent cuts

Tuesday, January 17, 2012 at 5:22pm

With representatives from all areas within Metro government gathered in one room, Finance Director Rich Riebeling told Metro department heads Tuesday to explore what effect a 2 percent reduction would have on their budgets.

The 25-minute outing marked Metro’s “budget kickoff,” the first public line of communication with department leaders on an upcoming budget the 2012-13 fiscal year. Mayor Karl Dean is set to present a final budget to the Metro Council by May 1.

“Realistically, if you go much beyond that you’re going to get into a massive-layoff discussion,” Riebeling said afterwards on the cut scenario, which is nowhere near finalized. Historically, the level of cuts introduced during the kick-off is rarely the final number executed in the spring.

“I didn’t see any reason to ask them to do a large number,” he said. “If you look at the cuts we’ve done in departments over the last few years, we’ve eliminated a lot of the excess. Now, you’re really down to pretty slim operations.”

Metro’s operating budget for the current fiscal year is $1.59 billion. In the previous two budget cycles, Dean’s administration elected to restructure, or delay, the city’s debt payments to avoid major cuts.

Metro departments have had to work with less in recent years. Overall, Metro has 670 fewer employees today than it did when Dean took office. Nonetheless, expanding Metro services seems out of the picture.

“I don’t see this as a year in which we’ll see a lot of improvements in budgets,” Riebeling said.

Riebeling made no mention Tuesday of some behind-the-scenes strategizing. Dean’s campaign committee hired a pollster earlier this month to conduct a phone survey that tested the mood of Nashvillians on a potential property tax increase. Metro’s last property tax hike occurred in 2005.

“We’ve looked at it every year, and we’ll look at it this year,” Riebeling told The City Paper of a property tax increase. Dean’s administration, now embarking on its fifth budget, has avoided tax increases in previous years. “We’re going to do what keeps this city moving forward. If we need to address it, we’ll address it as we get closer to May 1.”

By mid-February, Metro department heads are to deliver line-item sheets that detail how a 2 percent cut would be implemented. They’ve also been asked to submit capital-spending requests. Riebeling said this budget cycle he plans to submit a capital-spending plan — used for infrastructure investments, for example — after opting not to do so a year ago.

Riebeling indicated changes could be on the horizon for Metro’s pension and health care plan for government employees. Dean’s phone survey this month motioned a “reform proposal” whereby Metro workers would contribute more to their health care costs and receive lower pensions and benefits.

“Salary costs have remained fairly stable over the last four years, but what you’re seeing is benefit costs continuing to rise,” Riebeling said Tuesday. “The pressure for all of us will be the continuing rise of benefit costs.”

During a slideshow presentation, Riebeling reminded Metro officials the mayor’s office has navigated budgets during a historic recession and following the flood of May 2010: “Through it all, we’ve managed well,” he said.

On a series of slides, Riebeling stressed how the budget dynamics today, following years of economic decline and stagnant revenue, are different than those that predated Dean’s tenure in office.

Between 2005 and 2008, Riebeling said Metro’s tax revenues grew by approximately 20 percent. During the last three years, he said Metro has experienced only a 2 percent overall growth in revenues.

Riebeling said Metro’s property tax revenues increased $140 million between 2005 and 2008, jolted by the 2005 tax hike. Since 2009, he said revenue from property taxes has jumped only $20 million.

Over the last three years, he said sales tax revenue declined overall by more than $30 million, though it did begin picking back up in 2011. Local sales tax collections grew by $36 million between 2005 and 2008, Riebeling said.

“Through these very economically difficult times, and through the flood, I think we’ve maintained the core services of our city,” he said. “We’ve not taken steps backwards, and we’ve actually moved our city progressively forward over the past four years.”

9 Comments on this post:

By: BigPapa on 1/18/12 at 8:02

So Metro departments get another cut (i.e. cut more jobs) while the city sends $7M in cash to the Preds, upgrades LP Field, and shops around for a new minor league ball park. (Note each one of those is a private business owned by millionaires and billionaires.)

Priorities people, priorities...

By: Ingleweird on 1/18/12 at 9:58

What, Mr. Riebeling, layoff three full-time, bottom-tier, 20K/year Metro employees, who haven seen raises in three years, so your buddy Jim Fyke can work in your department for 20 hours a week? The mayor should comp the taxpayers for the ballpark feasibility study from his salary. Why are we still funnelling money to the Predators, when they threaten to leave Nashville practically every year? I'm no businessman, but this arrangement is unsustainable. I doubt the tax collections from Predators fans exceeds $7M. I second BigPapa's concern on priorities.

By: JayBee56 on 1/18/12 at 10:43

BigPapa, my sentiments exactly. Metro priorities are backward. They don't serve the taxpayer. They serve cronies, big business and their own egos. What the citizens want or need is not even a consideration.

By: MusicCity615 on 1/19/12 at 7:35

Ingleweird-

Predators threaten to leave every year? PLEASE. Do some research, understand contracts the team has with the city, and how sellouts at Bridgestone arena have increased exponentially since the new management team has taken over.

Why can't all metro employees have more of a 1 for all type attitude and decide to all reduce their salaries pro rata in order to prevent any layoffs?

By: Ingleweird on 1/19/12 at 8:04

MC615: Reduce salaries to prevent layoffs? PLEASE, do some research, and introduce yourself to some common sense. My best friend earns 22K (pre-tax) a year working full time for Metro (without any measley 2% COLA or raise for the last three years), and you think she should voluntarily earn less? Can you live comfortably on that amount? I bet you read those articles about the top Metro earners and think anybody working for Metro is overpaid and expendable. That is a categorically false presumption.

Can you prove to me (or provide non-anecdotal evidence) that the tax windfall from Predator attendees exceeds our $7M/year corporate welfare?

By: MusicCity615 on 1/19/12 at 11:03

Ingleweird-

What is more, $22k or $0? And I said reduce salaries pro rata. Her $22k per year would not be reduced nearly as much as the top earners, if you did some research.

Nashvillians Voted and Passed a referendum to raise property taxes in order to build the arena 15 years ago. In order to pay off the arena's debt, events need to take place and people need to spend money there. The Predators came after the Arena's referendum was passed, and the referendum was passed without any deal about a professional sports team to be the anchor tenant.

Since the new management team came in place in 2007, Bridgestone arena has moved to 6th busiest arena in the United States. If the Predators were to leave, guess who would make up the shortfall in the Arena's debt now that it doesn't have a major tenant? WE THE TAXPAYERS.

I too would love if a billionaire would have built the Arena on his own dime. It's not the case. We have to make due with what we have. We have a great Arena and a great hockey team. I support both.

By: govskeptic on 1/19/12 at 11:14

Mayor's private plan: We will pretend to make a budget cut of 2%
and ask for 12% property tax increase. Then we will follow the
federal government"s tried and true trick of collect the increased
taxes now and put off or just forget about any cuts! With a Council
in one's pocket or at least a majority anything and everything
wished for will happen!

By: Ingleweird on 1/19/12 at 1:15

MC615:
We may not see eye-to-eye, but I appreciate you taking the time to explain your rationales. Still, I believe many of our priorities could use some closer scrutiny.

By: MusicCity615 on 1/19/12 at 3:30

I agree, and good point on your end.

Hopefully the economy will improve and everyone will have better job security