The Mayor has identified his funding sources for the new event center. I give him credit for at least identifying his funding sources. It goes a long way in communicating with the public on how he intends to get this accomplished. Let me be clear, I support an Events Center and I appreciate the Mayor pushing this issue forward finally.
What I find troublesome is that one leg of his funding sources is the General Reserve Fund. That is money that funds the operating budgets of departments like Libraries, Park and Recreation, Health, Police, Fire, Human Resources, Finance, Central Services, Planning and Building Services, Street Division of Public Works, Engineering Division of Public Works. Over 66% of the general fund is used for salary and benefits of these departments/divisions.
Just how is the Mayor going to accumulate $15 million in reserves over the target reserve funding level in the general fund as established by the City Council? Let me throw out some predictions. Since 66% of general fund money is earmarked for salaries and benefits, I would venture that some of it will have to be funded on the backs of city employees. He is already talking about changing pension benefits and withholding any pay increases. He will stop employee growth by establishing a hiring freeze. The public will cry foul if he doesn't fund employee growth in Public Safety which, by the way, has the largest salary and benefit packages compared to general employees. So those non-uniform general fund departments will be sacrificed more intensely. He will do away with all professional and technical training because this expense is usually viewed as discretionary spending in the public sector. Then he will have to cut program services. The public is already seeing those kinds of cuts in Parks and Recreation.
What is the impact of those measures? Well, just a drop in employee morale for starters. But who cares about employee morale in the public sector? What really bothers me as a former HR Director is that the city's compensation system is going to be destroyed and any gains over the past 20+ years to bring city compensation out of the basement into the competitive arena with the private sector will be lost. I am so tired of people who think civil servants should work for bargain basement wages.
It is unprecedented that general fund money is used for construction projects. The CIP is funded with the 2nd penny sales tax and programmed for construction expenses. The general fund is make up of property taxes and first penny sales tax and is for operating expenses. Funding of this project should be programmed in the CIP, using sales tax revenue bonds and private sources, not on the back of the general fund.
If he takes $15 million out of the general fund reserve what is he going to use for operating expenses once it is built? Where does that place the reserve fund for normal cash flow to operate city government? What about the possible impact of lesser property taxes collected due to this economy and mortgage foreclosures? Is the Council going to let him deplete the cash reserve? Has Finance done a trend forecast on the deletion of $15 million? Time will tell.