Agenda - 07/10/12 Eugene City Council and EWEB Joint Meeting

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City of Eugene, Oregon Fiscal Year 2013 Budget Message Upon updating the forecast, I also introduced a two-year strategy to close the projected gap and stabilize the General Fund by the end of FY14. This approach entails capturing $4.4 million in savings in FY13, and an additional $2.6 million in FY14, resulting in a structurally balanced budget and a reserve balance at the 8% target level by the end of the forecast period. The strategies used to develop this budget were presented to the Budget Committee for discussion in February and are detailed in Attachment B. These strategies revealed that while we’ve previously been able to capture savings and minimize impacts to employees and the community, we must now impact both in order to align costs with resources. Although we’ve known that without a turn in the economy or an increase in revenues we’d have to look at service level adjustments to find savings, the reality of these changes does not come easily. With personnel costs accounting for about three-quarters of General Fund expenditures, we must continue to reduce the organizational footprint in order to get to a stable budget. The organization will work with 20 fewer positions in FY13. This presents the lowest population to employee ratio in the past generation. FullTimeEquivalentEmployees(FTE) per1000Population 12 10.3 10.4 10.2 10.110.110.1 10.0 9.6 9.4 9.3 9.2 10 8 6 4 2 0 FY03FY04FY05FY06FY07FY08FY09FY10FY11FY12FY13 In addition to controlling the number of employees, reducing the footprint means slowing the rate of growth in the costs for our employees. The FY13 budget takes a step in that direction with a zero cost of living adjustment for non-represented employees. The City will bargain with three of its four unions this spring with contracts that expire on June 30. A goal of keeping personnel costs flat in FY13 would go a long way toward achieving a stable budget by reducing next year’s budget reduction target by nearly two-thirds, down to about $900,000. The proposed budget would result in other visible impacts: branch library hours and Ridgeline Natural Area maintenance would be reduced. The City would hold its membership dues to Lane Regional Air Protection Agency and Lane Council of Governments in abeyance. These strategies exemplify that we are in difficult times faced with difficult choices.