Budget-Balancing Tactics in Local Government. David N. Ammons

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1 Budget-Balancing Tactics in Local Government David N. Ammons

Cost-Cutting Moves Reduced Revised Energy Employees Intergovernmental Modification Delay Memberships Altering Departmental Reduction Cancellation Reduced Purchasing Overtime Retirement Four-Day

2 Cost-Cutting Moves Reduced Revised Energy Employees Intergovernmental Modification Delay Memberships Altering Departmental Reduction Cancellation Reduced Purchasing Overtime Retirement Four-Day Training Travel Position and Service Support Staffing Contracting Hiring Other Volunteerism Capital IT Work Furloughs Water-Saving Employee Reassigned Remedies of Health of Restrictions Adjustments Cutbacks Tactics Budget Freeze Workweek Rules/Policies Protocol/Targets of Incentives Improvements Professional Outside Collaboration Contracts Benefits In Hours Process Cuts Tactics Other Groups Organizations Departments

3 Source: Christopher W. Hoene and Michael A. Pagano, City Fiscal Conditions in 2009, Research Brief on America s Cities, Issue National League of Cities, September, 2009, p. 6. Used by permission. 3

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5 Hiring Freeze Hard Freeze? Soft Freeze? 5

6 Delay in Capital Improvements Pros Immediate savings Usually few apparent short-term impacts Cons Small repairs become larger and more costly 6

7 Across-the-Board Budget Cuts Pros Immediate savings Appearance of equity Requires no analysis or differentiations among programs Cons Fails to protect vital services Punishes lean departments 7

8 Energy and Water-Saving Tactics Popular moves: Compact fluorescent lighting LED traffic lights Low-flow valves Limited-idling or no-idling policies MPG standards for government vehicles Others 8

9 Purchasing Restrictions Scrutinize new purchases Suspend all but the most essential purposes for remainder of fiscal year Delay big ticket items Cut off new requisitions early in fiscal year 9

10 Equipment Cutbacks Vehicle Adjustments Type/size of vehicles Energy-consumption characteristics Fleet size Vehicle use policies Other Equipment 10

11 Position Cutbacks Vacant or Layoff? Elimination or De-Funding? 11

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14 Clean, Safe, and Open -Revised motto of cash-strapped Washoe County, NV, Parks Department 14

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16 Four-Day Workweek Usually entails four 10-hour days for employees & extended hours for public Options Staggered off-days to maintain five-day coverage? Operations closed one day per week? Applies to all/most departments or only a few? 16

17 Furloughs All employees? Public safety exempted? Flexibility for employees to choose furlough days? Operations shut down during furlough with all employees off on same days? Same number of furlough days for all employees or greater number for higher-paid employees? Mandatory or voluntary? 17

18 Reduction of Work Hours 18

19 Salaries/Wages/Compensation Wage freezes Pay cuts voluntary or otherwise Reduction or elimination of merit increases and other special pay Longevity Pay Second-language pay Certification pay Overtime reductions 19

20 Reduced Employee Benefits Vacation days Sick leave Accumulation and buy-back policies Health insurance Cost-sharing formulas Tuition reimbursement Vehicle and parking allowances Pensions 20

21 Retirement Incentives Cost-Saving Possibilities: Eliminate the position formerly held by the retiree Promote another current employee into the retiree s position and eliminate the newly vacated position Hire a less experienced person at a lower salary to perform the retiree s old job 21

22 Revenue-Enhancing Moves Tactics Leasing Cash to Reduction Drawing Increase Receipts Management of Fee Tax Asset New on Government of Receipt Increase Reserve from Fees Sales TaxUtilities Subsidies Practices of Funds Existing Assets Fees

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24 Revenue-Enhancing Tactics Tax increase New tax Fee increases and expanded fee services New fees Reduction of fee subsidies 24

25 Other Revenue-Enhancing Tactics Tactics to increase receipt of existing taxes/fees Cash management practices/investment strategies Asset sales Leasing of government assets to outside parties New state/federal grants Receipts from utilities 25

Reducing Budgets and Maintaining Local Services Alaska Municipal Managerial Association Annual Meeting Nov. 14 and 15, 2016

Reducing Budgets and Maintaining Local Services Alaska Municipal Managerial Association Annual Meeting Nov. 14 and 15, 2016 Vickie Williams, MBA, CPA, Dean and Jim Powell, PhD, Assist. Professor School