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Mayor Haslam presents the budgetMayor Haslam Presents the Budget
April 30, 2010 - Mayor Bill Haslam said Friday that the City of Knoxville’s already conservative spending habits will become even tighter during Fiscal Year 2010-2011 – the second straight year that the city’s budget will decrease to match falling revenues. 

But the mayor told several hundred people gathered at Island Home Park that the level of city services will remain the same, there will be no layoffs and all employees except directors and senior directors will receive raises. 

He also told the crowd that his proposed budget does not include a tax hike. Instead, he said Knoxville’s city government will live within its means. 

“We are in a unique situation here at the City,” Haslam said. “Our very conservative approach to budgeting and our emphasis on tight management have kept us in a relatively strong position.”

He added, “But there is no getting around the fact that we are at the point where we have to tighten our belts even more if we are to keep the City healthy over the long term.” 

Haslam’s remarks came during the annual Mayor’s Budget Address held this year at the neighborhood park located along the Tennessee River in South Knoxville. The mayor emphasized that the city will continue to take the necessary steps to weather recent declines in sales tax revenues and keep the city on a sound financial footing. 

“I want to make sure that the next mayor takes over a city in a strong financial position, with low debt, a healthy fund balance, and sound infrastructure – our roads, sidewalks and bridges,” Haslam said. 

To achieve those goals the mayor unveiled a proposed $164.7 million operating budget for fiscal 2010-2011, which runs from July 1, 2010 - June 30, 2011. The total is lower than in the last two fiscal years. 

The numbers reflect the current economic reality. The city’s local option sales tax revenues have fallen from $37.3 million in fiscal 2008 to an estimated $32.1 million this year and building permit fees – which reflect the future growth in property tax revenues – have also declined considerably. 

Nearly half of the city’s operating funds are dedicated to the Knoxville’s Police and Fire Departments. A large portion supports the Public Service Department which maintains sidewalks, roads, rights of ways and ensures trash pickup among its missions. 

To make up for the revenue gaps the city’s employees have been doing more with less to stretch existing resources and the city has reduced its capital budget 

Still Haslam indicated that the city plans to accomplish a lot with the funds it has including taking the steps needed to implement a city-wide, curbside recycling program scheduled to roll out in July 2011. 

Other budget highlights include: 

• Continuing energy upgrades to the city’s buildings and ball fields 
• A minimum 2.5 percent raise for employees except for directors and senior directors. “In hard times leaders should bear a higher cost,” Haslam said. 
• The city will continue funding redevelopment activities in Downtown, Downtown North, on Cumberland Avenue and along the South Waterfront. 
• Most of the $23.5 million capital improvements budget will go towards basic infrastructure like sidewalks, road paving and road and bridge repair. Other funds will go toward expanding and renovating city parks, greenways and drainage projects. 
• The number of city employees is at its lowest level since the mid-1990s and it will stay down. The city is eliminating 12 full-time and three part-time positions that are either currently vacant or soon will be. 
• The city will implement the third, and final, year of the Mercer Plan raises over a two-year period instead of fully funding it this year. The additional salary increases for some employees are designed to raise their compensation to the level of their counterparts in peer cities. 
• The city will add $1.5 million to its annual pension fund contribution, a total of $9 million this year, to remain actuarially sound. 

In closing Mayor Haslam said that hard times aren’t all bad because, “they force us to set priorities, ask hard questions, and act responsibly.” He indicated that his proposed budget accomplishes those goals. 

“We have striven to reduce debt, manage resources wisely, and invest strategically to set the stage for growth in our tax base and reduce the burdens on taxpayers,” he said. “This budget positions Knoxville well for the next year and the years beyond.”