Lexington Mayor Jim Newberry proposed a 2011 general fund budget Tuesday that calls for layoffs, closing two swimming pools and a public golf course, and no raises for city employees — other than those in public safety — but no additional taxes for residents.
The mayor described the $274 million budget as "very much back to the basics." If projections remain accurate, this will be the third consecutive year that city revenue has declined.
Before fiscal year 2009, revenue failed to grow from the previous year only one other time in the merged government's history — 1996.
Seventeen full-time, permanent employees will be laid off in the finance and administration, social services and parks departments. Those layoffs are a result of the city making program changes and finding "more efficient ways of doing business," Newberry said.
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Twenty-five part-time and seasonal employees — many in the parks department — also will lose their jobs.
The Berry Hill and Constitution pools will be closed in 2011 for a savings of $60,000, and Avon Golf Course will shut down. Avon has operated at a $40,000 annual loss, and about half the rounds of golf are played by residents from outside Fayette County.
Winburn Community Center will be reprogrammed with a more academically challenging curriculum and funded as an extended-school program. The reprogramming will save $117,000 and eliminate one full-time and 12 seasonal employees.
Six major government departments — law, information, finance and administration, social services, public works and general services — reduced their budgets an average of 9 percent for a savings of $7 million.
Only public safety was exempt from cuts, and no layoffs are planned. Police, fire and corrections officers will be the only city employees receiving raises, as required by their collective bargaining contracts.
Police and fire will continue to recruit classes to fill vacancies in those departments. Payments will continue to the police and firefighter pension fund to address its unfunded liability.
Public safety receives the lion's share of general fund revenue — 56 percent — and Newberry said this will not change.
No new taxes are included in the budget. A modicum of tax relief will come to about 3,000 sole proprietors of small businesses. Where gross receipts are $4,400 or less, the owner will not be required to pay the $100 net profit license fee.
To balance the budget, Newberry said he did something he doesn't like doing, using one-time funding sources, including dipping into the city's rainy-day fund and selling surplus property. But he considered it "the best of several bad alternatives."
The city will withdraw $5.87 million from its $14.5 million rainy-day fund. Also, plans are being made to sell $4 million in surplus property.
Newberry called his spending plan "a very difficult budget" that reflects a decline in general fund revenue.
Eighty-three percent of the general fund revenue is tied directly to the economy in the form of payroll and net profit taxes, said Bill O'Mara, revenue director. When the economy shrinks, revenue declines and the city has to rein in spending, he said.
Newberry proposed no cuts in funding to the LexArts Campaign for the Arts because, he said, the city has demonstrated that the arts are critical to enhance quality of life and support economic development.
He also earmarked $2 million for the Purchase of Development Rights program to preserve Fayette County farmland.
Vice Mayor Jim Gray, running against Newberry for mayor, said in a prepared statement, "I am glad the mayor has taken some action, but his weak response to these issues has come at a steep price to taxpayers."
Gray said he would have cut mayoral staff salaries and perks; lobbying expenses; implemented "real plans to eliminate waste and abuse within boards, commissions and the administration"; and reduced or eliminated personal-service contracts in city government.
Newberry's campaign responded that Gray had voted for all of Newberry's budgets in the past and that the criticism of this budget came in a news release two hours before the mayor gave his budget address.
Urban County Councilman Kevin Stinnett, chairman of the council's Budget and Finance Committee, said he thought it was a "good budget given the money the city has to work with and the revenue projections." At the same time, he expects the council to propose changes.
Councilman George Myers took issue with the proposed $2 million in bonding for the Purchase of Development Rights program. The city receives two-to-one federal matching funds for PDR, but "If you have to borrow the $1 to get the $2, you can't afford the $1," Myers said.
"For me, this budget cycle, we need to not borrow anything," he said. Myers said that he supported PDR but that it would not critically damage the program to withhold financial support for one year.