Friday, September 24, 2004

Digging Deeper. Chumney does her own budget searching.

Memphis Flyer
By Bianca Phillips

This week, the City Council approved a resolution requiring the city finance office to submit quarterly budget reviews. Those reviews, which will include budget trends for each city division, spending reports, and year-to-date revisions, have been put in place to predict and minimize any budget shortfalls. The vote comes two weeks after city administrators reported that overtime costs and costs related to the July 2003 windstorm combined for a $30 million shortfall in the 2004 budget.

During last Thursday's budget committee meeting, City Council members listened to finance director Charles Williamson's contingency plans designed to offset this year's budget shortfall and future projected revenue shortages. But one council member -- Carol Chumney -- was more concerned about the causes of the budget shortfall.

"I was shocked and amazed at [Mayor Herenton's] announcement and what he said about council members being asleep on the job," said Chumney. "For them to come in and say that about $20 million was taken from the reserve fund to make up for this year's shortfall, that blew my mind." In a Commercial Appeal article, Herenton was quoted as saying that council members should have been aware of the city's fiscal situation.

Following reports by Williamson and his staff and information presented by the U of M's Sparks Bureau of Business and Economic Research, Chumney presented her own report, one that analyzed budget data back to April 2003. Her contention was that city leaders, namely Herenton and then finance director Joseph Lee, were aware of the city's revenue problems long before the council was notified last week. "We need to know why the city came up with numbers much rosier than the Sparks numbers," said Chumney. "I think we need some accountability, some answers."

The city's plan includes hiring freezes, cost decreases, and phasing out temporary workers and would produce about $32 million in savings. Chumney said the shortfall is closer to $36 million. Herenton has said that an increase in city property taxes may be necessary. Chumney proposes additional budget cuts, including college incentives and tuition reimbursements for employees, food expenses, legal and court costs, Riverfront Development funds, and a hold on nonessential new computer purchases. Those items currently account for $13 million of the budget. "Before you advocate property or payroll taxes, you have to make a reasonable budget and make cuts," Chumney said. "Only after doing that do you go to the people and ask for a tax increase."

Budget reports from Sparks had not been made available to council members. Chumney said that if the council had been provided with ongoing revenue reports from Sparks, it would have made more informed decisions before approving the budget for fiscal year 2005. The council approved the budget based on the city's April forecast data. "Of course, [the council] didn't ask for the Sparks reports because we didn't even know they existed," said Chumney. "Earlier this year it was said that I was too aggressive and was asking too many questions. Now, it's like we're not being aggressive enough or asking enough questions. You can't have it both ways."

Copyright 2004, The Memphis Flyer. All Rights Reserved.

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