Financial Changes are on the way to Balance the City of Atlanta's Budget!
(Budget shortfall update)
The ERP (Enterprise Resource Planning) program was instituted by the City of Atlanta, and according to the Mayors Stakeholder's Briefing on Channel 26 Video on Demand
Atlanta need to cut 120 million to help balance the budget for 2009.
In the Mayor's Stake Holder's Briefing the Mayor spoke on the status of the City's Budget and conditions. Mayor Franklin indicated that the ERP would be used to help balance the budget, the proposal for the budget must be presented by May 5, 2008 and finalized by June 30, 2008 and will go into affect by 1 July 2008.
The Mayor also stated that although technically the City is not in a Recession, however; impact of shifts in the economy and the trending down in the city revenue will cause the city to use the ERP reporting tools for tighter spending as consideration is given to Revenue, procurement, and human resource (HR).
Financial changes are necessary when reviewing the cities revenue and liabilities, pension cost and investments, she mentioned, when pension investments are down, the City of Atlanta has to make up for the loses. The Chief Operations Officer Greg Gianelli who is currently helping to prepare the balanced budget spoke on the transparent government 2008 shortfalls and what the underline factors of Atlanta's shortfalls are.
Historical Overview
The City of Atlanta higher pension cost is permanent Gianelli said, and higher than current revenue. The focus for balancing the budget includes Core Services, being efficient, and leaving the committee with a cash surplus for 2009. In the previous 3 years beginning with 2005 the budget short fall was 24.8 million, and 2006/2007 the shortfall was 47.2 million. He explained the expenses in 2007 were $598 million compared to 2002 of $400 million. The contributing factors were $53 million in pension cost, $20 million in Health Care Cost, and General funds positions at a cost of $61 million.
Current Crisis:
Cites and States has unfunded pension cost, and the new Pension cost for 2008 will increase nearly $30 million, health care and pension will cost $166.2 million, the average city employee makes 19,200. Gianelli spoke on the cities increase of 843 personnel which averages out to $60 million with 160 of the employees in Public Works, Parks, and Delivery Services which is 17% of the work force, with new Policemen, Firemen, and correction officers the city has grown by 20% in personnel.
Even thought the cities Revenue grew from $424 million in 2002 to $518 million in 2007, in real dollar terms the real growth was $424 million to $443 million, about an average of 1% each year for the last 3 year Gianelli said. Property taxes are flat; this means that a decrease in property taxes rollbacks during the last 3 years means a flat property tax collection.
Finally the projected revenue of $611 million and a increase in Pension cost which is considered permanent, the city will need to cut $120 million in spending cost. The City will be reviewing Workforce, Debts, and Improvements needed. The Mayor indicated that every department will be impacted and must contribute their share to balancing the budget. The City of Atlanta cost structure has changed, and the community wants delivery services as expected and with efficiency. The high cost of fuel because the city has 8000 vehicles will also impact budget considerations, however; the essential services such as Libraries, medical services and court systems must be maintained.
The budget consideration will not include the Airport or Watershed Management, they are on a different budget and doing quite well Mayor Franklin added.
The End
To see and listen to the Mayor's StakeHolder's Briefing on Channel 26 Video on Demand click the above Hyperlink for Channel 26.