Mayor and Council:
I respectfully submit the following comments for your consideration as you decide the city manager’s maximum spending authority for FY 2020/21:
General Fund Forecast Summary - Expenditures: Virtually every economist is now predicting a deep recession, of unknown duration, yet council is being asked to approve a FY 2020/21 expenditure spending limit increase of $10.9 million next year (from $285.2 million to $296.1 million).
Only $4 million of increases are listed as “Significant Budget Changes,” which raises the question…what is the rest of the increase?
Some clue as to “the rest of the increase” was revealed in a recent email to all city employees, apologizing that performance and service salary adjustments will be “delayed…for the time being” but assuring employees, “…we have added placeholder funds in the budget to continue these pay programs.”
For 2,500 city employees, a 5% pay increase might add $9 million or more new expenditures!
Forgetting the increases…where are the spending decreases citizens might expect to see, similar to those occurring in the private and non-profit sectors?
Are citizens to understand the closure of their public libraries, parks, swimming pools and other amenities will not justify any reduction of city payroll?
The proposed FY 2020/21 expenditure plan is insensitive to the sacrifices of citizens who are suffering with layoffs or salary reductions. More egregious, this spending increase will be funded by taxes paid by those same citizens.
GF Forecast Ending Balance: The presentation predicts a General Fund “ending balance” of $122.1 million, including $74.7 million designated for Public Safety Pension Liabilities. This is not a liability computed by Arizona’s Public Safety pension system (PSPRS), nor is it a liability they agree with. Scottsdale’s actual Public Safety Pension Liability and required annual payment is computed by PSPRS actuaries and fully disclosed in Scottsdale’s audited financial statements.
It is deceptive to label and reserve any portion of the General Fund ending balance as PSPRS pension related. The $74.7 million actually represents taxes collected since the last recession, over-and-above what was needed for city services…plain and simple!
This reporting is not being honest with citizens who are already hurting and distrustful!
Recommendation: I urge council to exercise its budget authority to (a) direct a more conservative expenditure budget, at a minimum reduced to the budget level adopted last year, but certainly eliminating any FY 2020/21 salary increases and (b) correctly label the General Fund unreserved balance so it may be considered available for emergency needs of citizens whose tax dollars created that balance.
Editor’s Note: David N. Smith is a Scottsdale resident and former City Council member.