Trimming the Sails

As a means of putting Tulsa's budget crisis in historical perspective, Terry Simonson, Mayor Dewey Bartlett Jr.'s chief of staff, had this to say: "What that really means for people is that we're probably going to go into the fiscal year of 2010-2011 with a budget that probably looks a lot like 2002."

Of course, that retro budget isn't really what anybody wants. Rather, it's the product of an economic downturn that has caused the city's sales tax receipts to experience an unprecedented plunge, leaving Tulsa considerably less money to spend than it had even a year ago. And that has led to layoffs, furloughs and salary reductions among municipal employees as city officials scramble to come to terms with the crisis.

The city started this fiscal year with a $255 million general fund budget, but that total has been sliced to $228 million to reflect the declining sales tax take. City finance director Mike Kier said the city's general fund budget for the fiscal year that ended June 30, 2001, started at $216 million and was cut to $211 million in the wake of that recession.

"So (this year's budget) is a little bit more than the 2001-2002 time period, but not much," Kier said.

Tulsa's general fund budget for FY 2010-11 won't be adopted until late spring, but Simonson doesn't hold much hope his projection will be off.

"Even though the cost of government--health care, wages, union agreements, utilities--the cost of government is a whole lot more in 2010, we need to be having a 2003 budget," he said. "And therein is the challenge. I'm sure it's the same challenge mayors across the country are having to face when you're trying to govern through a recession."

Simonson defended the new administration's handling of the budget situation, indicating that previous cutbacks engineered by then-Mayor Kathy Taylor were not enough to offset the revenue losses. He said the sales tax receipts checks the city received from the state Tax Commission for December and January were as bad as predicted by the city's Finance Department, leading to concerns the city would fall $10 million short of its obligations for the rest of the fiscal year, which ends June 30.

"In 2009, they tried two short-term approaches to this," Simonson said. "And though we weren't here at the time, I'm sure that the thinking must have been, 'If we can just get to January, just get past Christmas.' Here we are, and it didn't happen. There was no rescue of dollars. So the thinking was, 'Let's not have that kind of wishful thinking again when there's no evidence to support (that).' In other words, why repeat what hasn't worked?"

Simonson said Bartlett asked each city department to find its share of cuts that would equal a $10 million savings for municipal government through June. The last of those reductions went into place during the weekend, a move Simonson likened to "stopping the bleeding." As unpleasant as that process was, he said, it finally gives city officials the chance to take a longer view of the situation.

"The flip side is, I've said to the mayor, 'This isn't a budget in crisis; this is a budget of opportunity,' " he said. "If there ever was a time in our history to reinvent and reform and redirect the purpose of municipal government, now is that time."

Simonson said the administration's next move throughout the next few months is to put together a strategy of initiatives that will accomplish that retooling of city government.

"In the private sector, if I can use an analogy, the hood is always open," he said. "They're always fine tuning. They're always looking for high performance, they're always making it run better. In the public sector, we never even open the hood. So that's what this first 100 days and this first six months (of this administration) is really all about. We're going to open the hood and do an engine overhaul."

Those changes are sorely needed, Simonson said, indicating that Tulsa no longer can count on the kind of sales tax revenue it grew accustomed to in recent years.

"We don't think we're ever going to see a day in the near or even long term where we're back to $250 million in sales tax coming in," he said. "Just don't see those days again. Doesn't mean we won't improve from this, but we think it's going to take a long time for that to ever be back. So we've got to run a good government and give people the kind of service and protection that they deserve with less. And it absolutely can be done--absolutely can be done. Just takes good strategy, good initiative and good management."

Tough Love

That kind of organizational shift likely won't come without some differences of opinion, if this most recent experience is any indication. Bartlett's negotiations with the Fraternal Order of Police over proposed reductions at the Tulsa Police Department were particularly acrimonious, with each side sniping at the other through the media before a pair of compromises were reached late last week that saved a total of 31 jobs for the rest of the fiscal year out of the 155 that had been targeted for layoffs.

Still, members of the police union opted to have 124 officers laid off rather than agree to the mayor's proposed salary cuts. Bartlett's negotiations with the firefighters union were more successful, as members of that organization voted on Jan. 31 to accept the proposed salary and benefits reductions for the next 17 months in lieu of layoffs that would have caused 147 firefighters to lose their jobs.

Kier said this round of budget cuts was much more difficult than the last one earlier this decade.

"That was painful, and we went through it for about three years," he said. "We've done kind of what took us about three years in 10 months this time around."

Kier, who has been with the city since 1975, acknowledged that Tulsa has faced economic downturns several times in the past. The difference this time, he said, is that so many budget items already have been eliminated, it's difficult to find anything left to trim.

"We've taken so many things out at this point, that when you ask people about reductions, it's just not easy to come up with, 'OK, we can stop doing this,' " he said. "It's much harder with all the things we've removed."

His own department, Kier noted, started the fiscal year with 89 positions and is now down to 74. In 2001, he said, the Finance Department had 96 positions, meaning its personnel total has been reduced by nearly 25 percent throughout the last nine years.

As for when the steep drop in sales tax revenue--the city has reported 10 consecutive months of sales tax collection declines, the longest such period in Tulsa's history--might begin to flatten out, Kier projects that could take place around the end of the current fiscal year on June 30.

"We need to kind of see that start to happen," he said. "We don't necessarily expect that we'll have any kind of growth, year over year, for the rest of this fiscal year, but we've got to stop seeing 11, 14 percent declines.

"And, in part, we think that'll start to happen because beginning in April (2009) is when we first started seeing declines," he said. "Last year, when we had a 5.7 percent decline (in April), we're just really not expecting we'll see a 14 percent decline on top of that decline last year."

The mayor and City Council will have only a short respite before they must take up the general fund budget for the next fiscal year, which begins July 1. But Simonson is confident much of the heavy lifting already has been done.

"In essence, kind of what we're doing right now is a lot of the prep work for that," he said. "These union agreements, these concessions, these layoffs if they happen, the cutbacks--in a real sense, this is all preparing for the next year's budget. Nothing that is done now in terms of concessions or cuts or furloughs, none of that's going to be restored in July. It will almost be a seamless budget and expenditure proposal from June to July and on to the next fiscal year."

That's assuming things don't get worse, of course. Kier said his projections indicate the city has taken appropriate action to avoid further cuts.

"We came in on this $10 million (reduction) with the belief that would be enough to get through this year and into next year," he said. "I don't think anything will change that, although given what we've been through, I probably can't guarantee it."

If additional sources of revenue become available, Simonson said things could even be slightly better for city government next year.

"The good side of it is that if different sources of revenue come in from whatever it is, whether it's the economy or it's legislation or it's fees, we can always go back and try to restore some of that in the budget," he said. "Reduce the number of furlough days, for instance. Restore some of the money for materials and supplies that were cut. Get the lights back on the highways and freeways. We can always restore things."

The chances of that happening may not be good, but Simonson didn't rule that out, either.

"There is some optimism, with the legislative strategies we have, with how lean we've gotten the budget now," he said. "We don't foresee right now that we're going to have to go through the next fiscal year and be back at the table with the union or back with the employees for more furloughs.

"We think we have proactively looked ahead and said, 'Let's get to what we think is the worst case and hold there--not just Band-Aid it, let's think beyond that and bite the bullet. Get to the worst case and then try to begin restoring the revenues and financial stability of the city as fast as we can.' And that's going to be our policy approach."