Tampa's new mayor wrestles with budget woes

In the past three years, Tampa has eliminated hundreds of jobs, consolidated city departments and slashed spending to plug millions of dollars in budget shortfalls.

And next fiscal year, more cuts are coming.

Mayor Bob Buckhorn says preliminary estimates for the fiscal year 2012 budget indicate a possible $30 million deficit, amid the continued decline in local property tax proceeds.

Buckhorn has asked department heads to come up with budget trimming scenarios that cut upwards of 10 to 15 percent from their spending packages for the next fiscal year.

"There's going to be some tough decisions to balance this budget," Buckhorn said during an interview this week. "We're going to have to squeeze more blood out of the turnip."

Buckhorn said in addition to spending cuts he will likely have to use "some" reserve money to cover the city's operating expenses, reluctantly tapping into a $150 million rainy-day fund his predecessor Pam Iorio amassed during her final years in office.

"In the long-term, however, relying on reserve funds is not sustainable," he said.

Even if residential property values increase, Buckhorn said, state-mandated property tax reforms cap the amount of additional revenue the city can capture at 3 percent annually.

"We're never going to get back to where we were before," Buckhorn said.

There are no plans on the table to increase Tampa's property tax rate, he said, which has been unchanged for the past four years at $5.73 per $1,000 of taxable value.

Steve Daignault, who administers the city's public works and utility departments, said he doesn't know what cuts of that magnitude would mean for programs and services, but acknowledged that many departments are already running on shoestring budgets.

"After the last few years of cuts, that going to be a big cut," he said Thursday of the scenarios Buckhorn has department heads considering.

To plug a $32 million deficit in fiscal year 2011, the city laid off dozens of workers, cut spending and consolidated several departments in the 2010 fiscal year, which saved an estimated $19.5 million. The remainder, $12.5 million, is being filled with reserve funds.

In addition to downsizing the work force, city department heads were directed to scale back spending to 2009 levels and cut an additional 3 percent from their budgets.

Despite the shortfall, Iorio's 2011 budget dolled out $4 million in pay raises for city firefighters, police officers and general employees who qualified to receive them under the city's step and merit programs, or roughly half of the municipal work force.

Buckhorn said he hasn't decided about pay raises, but said he would like to be able to maintain step plans and possibly small cost-of-living raises if the city can afford it.

On the campaign trial, Buckhorn talked about "growing the economy" to expand the city's tax base and provide enough revenue to keep the city government running.

"We just can't cut our way out of this economic ditch," is a phrase he repeated often.

In the short-term, however, that seems unlikely, meaning that Buckhorn's administration will have to rely on reserves and cuts to city services and personnel to bridge the gap.

"He's going to have to cut his way out of this thing," said Mark Anderson, who has chaired the city council's volunteer budget advisory committee for several years.

Anderson said above all, the new mayor needs to tackle the issue of compensation.

"There's no reason a Riverwalk manager should be making $100,000," he said.

Faced with similar criticism, previous mayors have defended the salaries paid to senior administrators and rank-and-file employees, saying the compensation, although slightly higher than that of other local governments, was much less than the private sector.

Another factor driving up the city's costs are contributions public safety and general employee pensions have doubled in the past two years to more than $40 million.

Buckhorn said the stock market performance during the last quarter has boosted the value of both funds, which city officials expect will keep those costs from increasing.

Payroll and benefits, including pension contributions, make up the largest percentage of the city's general fund expenditures, projected at more than $278 million in fiscal 2011.

Anderson's committee, made up of business and civic leaders, also wants the city to explore privatizing some city operations, such as janitorial and warehouse services, a move that has been recommended in the past but rejected by previous city councils.

Buckhorn agrees that the city should study privatization, particularly in the city's parking division which faces a projected $6 million deficit annually in the next several years.

He also wants to conduct an inventory of city-owned real estate to determine if some of the facilities can be consolidated or sold off to reduce the city's annual operating costs.

And he intends to revisit a proposal from Iorio to privatize city warehouse operations, which the Iorio administration estimated would save upwards of $3 million a year.

Buckhorn will make his proposals to new faces on the council with only two members of the city council that turned down this proposal still in office.

"Everything is going to be on the table," Buckhorn said. "We're going to have to look at everything the city does and ask the question why and should we be doing it at all."

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