After Mayor Karl Dean announced various pieces of it in his State of Metro address yesterday, Finance Director Rich Riebeling briefed Metro Council members on the administration's budget proposal.
The $1.89 billion budget proposal is $79 million larger than the current fiscal year's, representing a 4.37 percent increase. It does not include a property tax increase.
Here are five things to know:
After the mayor's speech yesterday, which was filled with announcements of new initiatives, one question hung in the air. After months of talk about how tight the budget would be, and how there was little opportunity for "funding improvements" for Metro departments, how were we going to do all this new stuff?
Well, the new budget proposal includes a $72.5 million withdrawal from Metro's reserve fund. It's one of, if not the biggest, such withdrawal since Dean took office, though not unprecedented — the FY04 budget drew just more than $105 million from the fund.
A year ago, when the administration proposed taking nearly $45 million from the fund, largely to cover increased debt service payments, Dean and Riebeling explained that they had put extra money into the fund in previous years to prepare for higher payments now.
Riebeling emphasized yesterday that the reserve fund would still have more money than it did when Dean took office.
"I believe it is an appropriate use of fund balance, he said. "It is not one that puts us in any kind of precarious financial position."
Of the $79 million in new funds included in the budget proposal, $22 million will go to paying off debt, which now represents 11.06 percent of the overall budget. The historic size of Metro's debt load has been a topic of some concern as of late, but Riebeling emphasized that Metro will pay off half its debt over the next 10 years.
The rest of the new money goes to the following:
Schools — $27.5 million
Employee and retiree costs — $21.8 million
General government — $8.2 million
The recommended budget directs $27.5 million in additional funds to Metro Schools, for a schools budget of $773.9 million which represents a 3.7 percent increase over the current fiscal year. That's $5 million less than the school board had asked for, but the Dean administration notes that the schools operating budget has grown by 29.5 percent since Dean took office. The new proposal includes funds for Pre-K expansion, and the mayor's capital spending plan also includes money for schools renovations and construction (more on that later).
School board budget chair Will Pinkston sent this statement to Pith:
"Overall, it's a good day for Metro Nashville Public Schools. We didn't get everything we asked for, but we knew that going in. The board's Budget and Finance Committee will meet as soon as next week to look at areas where we can trim back on the size of our proposed increase. I'm encouraged by the mayor's support for pre-K and he's once again making a strong commitment to school construction, renovation and expansion needs. I'm concerned about drawing down our cash reserves too much. Responsible budgeting dictates that we shouldn't get into the habit of using those one-time funds to cover recurring expenses. All that said, we're being introspective and we'll look for places to achieve cost-savings once we see the results of the performance audit later this year."
Education continues to get the lion's share of the Metro budget, accounting for 41 percent of the funds. Public safety is responsible for the next largest portion at 22 percent.
Employee salaries and benefits:
Dean's budget proposal includes an additional $10.2 million for employee compensation, to fund raises. All full and part time employees will receive a 1 percent across-the-board raise, effective Jan. 1, employees in Metro's step pay plan will receive increment pay raises, and departments will receive an allocation of 2 percent to fund open-range increases.
The proposal also funds domestic partner benefits, and the administration plans to file legislation allowing those benefits that will track with the budget. It's the conclusion of an effort that began last year and would make Nashville the third city in the state to extend benefits to same-sex and opposite-sex domestic partners. The cost of the change is estimated at $500,000 to $1 million per year.
Capital spending plan:
The mayor also proposed a $275 million capital spending plan.
Here's the breakdown per a fact sheet provided by the administration:
— The largest portion of the proposed plan is $110 million for Metro Schools. The $110 million builds on the $279 million in capital spending to Metro Schools since Mayor Dean took office. Renovations include Bordeaux Elementary School and at Casa Azafran to house new pre-kindergarten hubs; partial renovation and expansion at M.L.K Magnet School; renovation at Hume-Fogg High School; new facility for Tusculum Elementary; and a new elementary school in the Overton cluster.
— Public Works, $63 million, including $15 million for sidewalks and $30 million for paving, roads and bikeways.
— Parks, $36 million, including $3 million for Greenways and $2 million for Open Space.
— Metro Transit Authority, $18 million, including $4 million for bus rapid transit “lite” on Charlotte Pike and Nolensville Pike and $1 million to build 100 new bus shelters.
— Nashville Public Library, $5 million.
Of particular interest to us, the $15 million included for sidewalks would represent the biggest investment in sidewalks since Dean took office.
You can peruse a PDF of Riebeling's budget presentation, and watch the whole thing below if you like.