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Tightening the Belt

City budget cuts cause ripple effect.

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I wish you would have come to see me early last week," says Johnny Rudd. "I've taken most of my plaques and trophies home now. On March 22nd, I want this place to be clean." Rudd's office in the city's Division of Park Services building on Avery is still slightly cluttered with sports memorabilia. "After 19 years, you collect a lot," he says.

Rudd has supervised the Adult Athletics department for the last nine years. Before that he worked in Youth Athletics. When city budget cuts and layoffs were announced last month, Rudd's position and his department were casualties. The city ended its spring athletic leagues and youth leagues. Field maintenance crews were cut, and the one other employee in Rudd's department was also laid off. A total of 41 parks employees will soon be unemployed.

Since the cuts were announced, Rudd has received many calls from frustrated players questioning the city's actions. For the last few years, the Adult Athletics department has run at a deficit. "In the late 1980s and early '90s, we had as many as 1,400 teams in our leagues," says Rudd. "Last year, we had only 203." Those teams accounted for about $82,000 in revenue, but costs exceeded $125,000. "Many of the teams that used to play [in the city] are playing in suburbs which have their own complexes. That has really hurt us," Rudd adds.

"But the people who are really hurt are the kids," says Rudd, who also coaches summer youth baseball teams. "About 80 percent of school teams play on city fields. The adult teams can pick up and play elsewhere in the county and Mississippi, but the kids have nowhere to go.

"I was ready for this day. I have always made sure I had a second [employment] option. But I really hurt for all of the other people affected. Most people are devastated."

Due to the budget cuts, 198 full-time city employees were laid off. Another 1,900 part-timers also lost their jobs. The layoffs, combined with additional budget reductions, are expected to close a $6.4 million shortfall for the fiscal year ending June 30th. City Council members have proposed 26 recommendations to balance the budget, including reviewing MATA operations and even looking into selling The Pyramid. But Mayor Herenton told council members Tuesday that their recommendations came too late to be implemented this fiscal year.

The eight-page layoff report issued by the Human Resources department includes mostly Parks and Public Works employees -- crew members, mechanics, and clerks. But some of those laid-off are division directors, like Rudd, and employees directly involved with public services. Human Resources director Lorene Essex says layoffs were determined by classification, seniority, and department budget. "We looked at how an organization could function without those employees," she says. "Also, would the remaining employees be able to continue operations and provide services? We didn't make cuts just for the sake of cutting."

Laid-off employees remain on the city's health insurance plan for 30 days after March 22nd. After that, they become part of a much more expensive COBRA plan. For Rudd, COBRA means a nearly $600 monthly increase in personal expenses. By law, COBRA plans do not include life insurance.

For some employees, a union contract has granted them a reprieve. Through clauses in their contracts, laid-off employees are allowed to "bump" or replace some employees with lesser seniority. In departments such as Adult Athletics, where all employees have been eliminated, that clause is not in effect.

Shirlean Robertson is number 149, four above Rudd, on the list of 198 full-time employees being eliminated. For the past decade, Robertson has been employed in the Mayor's Citizen Services Center. She is the current administrator and senior member of that department. "I am just one month short of 11 years with the city," she says. "I'll have to find another job. I've got to keep working." Four employees will be left in Robertson's department. Those positions are appointed, and the "bump" clause does not apply to appointed positions.

Center for Neighborhoods coordinator Vernua Hanrahan, number 89 on the list, is one of two coordinators being cut from her department. Although community advocates have expressed their concern about the layoffs, Hanrahan is slow to discuss her future. "Until March 22nd, I am still employed by the city and wouldn't want to talk about any of the decisions right now."

Others have been more vocal, including former part-time Sharpe Planetarium employees Brett Hanover and Diane Heaton, who began an on-line petition to save the planetarium, which has already been closed to the public. Dan Hope, spokesman for the Pink Place Family of Museums, said the organization has lost eight full-time employees and at least 20 part-timers. Planetarium manager Jim Greenhouse, number 83 on the list, has already found another job in Macon, Georgia.

What were the causes for the budget deficit? The city's finance office and Mayor Herenton have been criticized for their original rosy forecasts on city finances when they presented the budget last summer. "We created the budget on the information we had at that point," says finance director Charles Williamson. "We had an economy that was on the uptick. FedExForum was opening and would bring in more tourism dollars. And we felt the windstorm was behind us and that people would now be able to pay their property taxes."

In September, Williamson noticed that things weren't turning out as planned and notified the mayor. "Because we were already in the fiscal year, all we could do was reduce our spending to not exceed our revenues. It's like balancing your personal checkbook."

But balancing the city's checkbook requires millions, not only to close the budget gap but to replenish reserve funds, which have dwindled to $26 million. To remain in good standing with bond-rating agencies, the fund will have to return to 10 percent of city expenditures, about $48 million.

"We can no longer allow [city administrators] to continue passing these budgets and making these cuts like this," says council member Carol Chumney. "[Council members] have got to take a stand and make them accountable. I've been saying this since I've been on the council, but nobody seems to want to ask hard questions."

Chumney and other council members have criticized the administrators for unrealistic budget projections as well as employee raises. A 3 percent raise for about 6,000 employees accounted for almost $4.5 million in additional expenses.

Williamson says those criticisms are unfair. "Our expenditures have been lower than average the last five years. It's just that our revenues have been down," he says. "You can go back to unpaid property taxes that we don't have and even further, to the $86 million that the city gives to the school system. That's money the city could have in its coffers."

Over the past 10 years, the city has contributed $828 million to Memphis City Schools. On several occasions, Herenton has proposed withdrawing those annual funds to MCS. The City Council would have to approve such a decision.

To ensure a better budget analysis for the next fiscal year, Williamson says he and his staff are utilizing better money management. Union-negotiated raises and other salary increases are being factored in advance to better offset expenditures. Williamson is also looking into additional revenue, including the possibility of a commuter tax. Using Pittsburgh as a model, a commuter tax would be paid by employees who work in the city but live elsewhere. Employers would collect the tax and remit funds to the city. "We're a ways from that," Williamson says. "We have to check with the legal department to see if we have to check with the state legislature to go forward. If we can, it will come up in fiscal year 2007," says Williamson.

Until then, laid-off employees can only hope for a budget turnaround that will give them their jobs back. But even if revenues exceed expectations, there is no assurance that the positions will be reopened.

"I have all sorts of fishing equipment at home that has never been used," says Rudd, as his baseball clock loudly ticks away his remaining hours on the job. "I passed by a lake the other day and saw a group of men sitting out there enjoying themselves, and I said to myself, 'I'm on my way.'"

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