Goodyear Budget Proposes 8% Spending Increases over Last Year


Goodyear City Council has irresponsibly proposed a budget that includes 8% spending increases over last year’s expected spend.  These council people all ran as fiscal conservatives.  Did you vote for them?  To propose adding $5 million of new spending to a city that is already overloaded with debt and rapidly reaching its legal debt limit is unconscionable, in my opinion.  8% increases in this economy are not fiscally conservative.

What I will show you below is how Goodyear could easily take $2 million out of the proposed budget with little to no risk to city services.  In fact, if Goodyear eliminated just the proposed increase (not the total spending, but just the increase) in spending in one “cushion” account (Department #1910) in their budget, and incorporated my other suggestions, they would save nearly $3.0 million alone.

In my last post I told you about the nonsense in Goodyear’s budget revenues.  I also showed that Goodyear went out and borrowed another $20 million last year (net $7), upping their total debt to nearly $320 million or more than 5 times General Fund revenues. Today I’m going to show you what is going on in the expense category.  Same as last time, where I mention a page number it refers to the 102 page budget book prepared by city staff. 2011-12 Draft Budget

The In Focus magazine you all got at your homes last week advertises that this budget is “only” a 3% increase over last year’s budget.  Sounds pretty good, doesn’t it?

While that by itself is a true statement, what business did you ever hear of who compares their future plans to last year’s “budget”?  Businesses get compared to last year’s “performance” and that is what the city should be compared to. In the case of expenses, the following year budget should be compared to the previous year’s ACTUAL expenditures. (I’ve said this over and over again in many previous posts, I hope you are all getting it by now).

Think about it.  If a previous year budget has any fluff in it and all you do is compare your new budget to the previous one, then you’re just comparing one piece of fluff to another.  And that is what happens in Goodyear.

What council might tell you is that “we have to include some extra money just in case we have a problem during the year”.  What they won’t tell you is that IN ADDITION to the proposed $74 million they want to spend, they’ve also included $16 million in CONTINGENCY spending   pg 69.

Goodyear’s Grand Total All Funds 2011-12 budget (pg 81) projects an increase in expenses of nearly 8% over 2010-11 spending or about $5 million in new spending going from expected spend of $69 million this year to $74 million budgeted for next year.

I look at the most serious department offenders in the table below.  I’ve only included department expenses that are increasing 5% OR MORE year over year.  The one exception to that is Procurement, which is up 3%, but if the city is spending considerably less money each year, why is Procurement going up at all?  It should be going down.

Department Expenses Increasing by 5% or more.

Department

Budget Page

Increase Amount (000)

Increase %

Utility Billing

77

$56

8%

Procurement

77

$7

3%

IT

77

$216

9%

HR

77

$214

11%

1910 Non-Departmental

77

$1,400

88%

Fire

78

$584

5%

Eco Devel Admin

78

$79

20%

PW Admin

80

$34

6%

Total WW

81

$369

14%

Total Water

81

$1,000

24%

Grand Total

$3,959

The surprising total increase from just these eleven (11) departments is nearly $4.0 million!!

There is a very simple solution to “budget creep” and most businesses deal with this on a regular basis every year.  All city council needs to do is tell city management that any department that has come in with a budget increase of  5% or more will only get half or less of what they ask for.  If that was done with just these 11 departments, that would save nearly $2.0 million.  There would be no need for a property tax increase and council could direct city management to start paying down debt with the extra money.

A few more observations.

  1. Notice how many of the offending departments are “administration”.  That’s where fluff is stored.
  2. Notice how many of the offending departments are in the utilities area.  Remember I told you yesterday that Goodyear is subsidizing the General Fund with $3.5 million in utility over charges?  Don’t you think they know that?  So don’t you think it is a good bet that they let the utilities pad their budgets a little more so that this subsidization doesn’t look so bad but the money is still there in the budget to spend?  As I said above, as long as departments only get compared to previous budget rather than previous spend there is lots of room for mischief.
  3. What is 1910 Non-Departmental on pg 77?  That department is adding $1.4 million to their last year’s spend an 88% INCREASE.  Department 1910 is one of two things.  Notice that it did not exist until last year. Either it was created to lump costs from other departments together (like insurance, taxes, other department charges) or it is what is known as a “buffer” or “place holder” or “cushion”.  If it was created to gather some costs then those costs should have been deducted from all the other departments it took them from.  We saw this a few times during the CBC and we never saw the other department costs reduced. The next question would be why did it nearly double in amount one year after “collecting” costs? If it is a “cushion” account, some people call it a slush fund; in this case money for council and city management to dole out to their benefactors.

Goodyear citizens should demand better of a recently elected troupe of council people who in public meeting after public meeting told you if you voted for them that they would manage the city’s finances better.  Monday night you have an opportunity to let them know how you feel about their tax and spend ways.  If you can’t make it Monday, check out my easy to use Goodyear City Council email list to the left of this post.

Tomorrow’s topic; Goodyear’s Debt Problem

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One Response

  1. Add to this the Goodyear Artwork ordinance which City Council should overturn immediately.

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