Lexington Mayor Jim Gray proposed closing a projected $27 million deficit in the city budget by laying off 28 workers, abolishing 215 vacant positions, slashing spending on police and fire, and closing two pools and a golf course.
The proposal "strips away the rose-colored glasses and exposes our city's financial condition to the bright light of day, and deals with it responsibly," Gray told the Urban County Council on Tuesday as he outlined his $271 million spending proposal for the next fiscal year, which begins July 1.
The city has "serious financial problems" that will be painful to fix, he said, noting Lexington faces its fourth consecutive year of flat or declining revenue — a first in the 35-year history of merged government.
"Passage of this budget will require strong leadership and courage," Gray told the council on his 100th day in office.
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Gray said his budget proposal, which calls for no new taxes and one new fee, is structurally balanced and avoids using one-time money to pay for ongoing programs.
The council now has about two months to make changes to the proposed budget. A final document probably will be approved in June and take effect July 1.
Gray's proposed budget would:
■ Lay off workers in four divisions of city government: seven in government communications, five in parks, five in social services and 11 in building security, for a total savings of $1 million a year.
Gray said his proposal would outsource building security services. He also noted Lexington's communications department was nearly double the size of the same office in Louisville.
Pam Brandenburg, president of the Civil Service Employees Association, which represents more than 600 city employees, said she was grateful there were only 28 layoffs proposed.
"Mayor Gray has had to make some tough decisions, but I believe he has been fair and above board," Brandenburg said.
She was impressed Gray will take no pay for six months to save the city $70,000 and will require two-week furloughs of his commissioners and senior-level staff. Brandenburg said she emailed the mayor earlier to say, "I applaud your sacrifice and determination."
■ Abolish 215 vacant positions in city government. Personnel costs, which make up 65 percent of the General Fund budget, would be reduced by $11.8 million. The city's work force would shrink from 3,078 full-time positions in 2011 to 2,835 in 2012, the smallest since 1999.
Gray said his proposed personnel reductions would create a ratio of one employee to 104 city residents, compared with one employee to 120 residents in Louisville.
■ Close all city swimming pools on Mondays and permanently shutter two underused pools, Berry Hill and Constitution, and close Meadowbrook Golf Course, which loses about $80,000 a year.
Shari Gatewood, manager of Meadowbrook Golf Course on Wilson Downing Road for 12 years, said she did not know about the possible closing until Tuesday.
"This is such a wonderful place. It provides such a benefit to children, seniors, people just starting to play golf. It would be a sad thing if it closed," she said. "And it's a wonderful green space in the middle of town."
The city tried to close the 18-hole, par-3 course about three years ago. "We're hoping the council will rally for us. They did in 2008 and kept us open," Gatewood said.
Councilman George Myers, who represents the district that includes Berry Hill pool off Buckhorn Drive in South Lexington, said he had talked to Gray's administration about turning the pool into a skateboard park.
"Otherwise, we have this big facility that is of no value to the community and becomes an eyesore and an instrument for vandalism and graffiti," Myers said.
■ Institute a fee for ambulance runs when no one is taken to the hospital. The move would raise about $500,000 a year.
■ Discontinue the city's $40,000 annual support for Valley View Ferry, which carries vehicles across the Kentucky River at the end of Tates Creek Road for free. The ferry connects Madison, Jessamine and Fayette counties, and is funded by a variety of agencies.
■ Move toward a cost-of-service model for employee health care to save $3.5 million a year. Consultants have been working since March to revamp the city's health plan, which had a $9.9 million overrun in 2010 and faces a projected $12 million loss in 2011. Without changes, the plan would go over budget by $14 million in 2012, Gray said.
He did not go into detail, but Gray said employees would be expected to shoulder more of the cost of their health insurance.
■ Save $5.6 million in police, fire and corrections collective bargaining contracts, plus $3.1 million through a variety of other means, including eliminating unscheduled overtime in the fire department and not filling vacancies.
"Our negotiations with unions just didn't adequately factor in the long-term financial health of the city," Gray said.
He also said there must be "permanent changes in the benefits" offered to future employees in those departments, otherwise, "we will never catch up."
The only new debt proposed in the budget is $30 million to fund the pension system for police and firefighters, which has an unfunded liability of $225 million.
Chris Bartley, president of the firefighters union, said he did not take Gray's call for savings from collective bargaining with police, fire and corrections as a threat.
"Not as long as we've got a seat at the table," Bartley said. "That's what collective bargaining is all about: hammer out a deal."
■ Spend $850,000 to correct life-safety issues at The Kentucky Theatre, the Phoenix Building and police headquarters by improving elevators and fire protection.
■ Cut funding for the Purchase of Development Rights program by 50 percent. The program, which preserves farmland from development, would get $1 million from unspent proceeds of bonds issued in previous years.
"We can continue the program and achieve our long-term goals to preserve the bluegrass brand, while adjusting this year to recognize the enormous struggle our current financial condition is presenting," Gray said.
■ Reduce funding for outside partner agencies, such as the Salvation Army and the Hope Center, by 10 percent to save $385,000.
"Arguably this will be the toughest budget we've ever done in merged government," said Councilman Kevin Stinnett.
Vice Mayor Linda Gorton said the proposed layoffs would be "devastating to 28 of our employees who have spouses and children to support."
But she expressed relief that it wasn't more. "It could have been 50 ... or 100," Gorton said.