Photo By Graham Lienhart

Cincinnati City Council members Leslie Ghiz and John Cranley discuss proposed changes to the city's biennial budget during a Finance Committee meeting.

They want to be on their best behavior. Honest. Various factions on Cincinnati City Council were hoping later this month to avoid the rancorous political battles and heated rhetoric that marked last year's rocky budget negotiations -- but another showdown over spending might be looming.

Although the 2008 budget adjustment recommended by City Manager Milton Dohoney Jr. last month recommended dealing with an estimated $25.4 million deficit partially by cutting $1 million from social service agencies and imposing two new fees on residents, a counter-proposal unveiled last week by Mayor Mark Mallory deleted those controversial provisions.

Instead, to offset those cuts, Mallory proposed using an extra $3.5 million in general fund revenues that city budget planners didn't anticipate. Under the mayor's plan, most of the social services funding would be restored, as would $950,000 that Dohoney proposed cutting from police overtime.

Also, Mallory would eliminate the two fees suggested by Dohoney: One fee would impose a $5 quarterly charge on trash pickup, while the other would impose a maintenance fee on property owners who have gas-powered streetlights, which are common in historic areas like the Clifton Gaslight District.

Reserves or services?
Funding for police overtime and social service agencies that provide substance abuse treatment and job training are among the reasons that Cincinnati's crime rate has leveled off and its homicide rate has dropped, according to Mallory.

"Last year we made significant increases in the city's investment (in) safety services, such as police visibility overtime and human services," Mallory says. "Given the significant progress that we made on improving public safety in 2007, we cannot afford to reduce the funding to those two important areas in 2008. We must continue our investment to ensure that the results are sustained."

The extra revenues that Mallory wants to use for blunting the proposed cuts come from higher than estimated tax collections in October, according to city financial reports.

Some council members, however, believe not enough money is being put into the city's rainy day account for emergencies, and the shortage could have serious financial consequences.

Council last summer unanimously passed a motion instructing that all surplus funds were supposed to go into the city's cash reserves. Generally, accountants and banks recommend that cities keep about 10 percent of general fund revenues in a reserve account, to deal with emergency or unanticipated costs that might arise in the future. Those reserves, in turn, affect the city's credit rating and how much money it can borrow for construction projects as well as how much in interest charges it must pay. Cities that don't keep enough money can eventually be declared in "fiscal emergency" by the state.

Last year a council faction nicknamed "the Fiscal Five" criticized Mallory and their colleagues for several budget policies including not putting enough into reserves. The faction consisted of Democrats Jeff Berding and Laketa Cole, Republicans Leslie Ghiz and Chris Monzel and Charterite Chris Bortz.

After facing much public criticism about the bitter budget fight last winter, the faction wants to strike a more conciliatory tone but is worried that the reserves are again being neglected.

"This is something we have to look at closely because it affects the financial health of the city," Ghiz says.

Ghiz is hopeful that a compromise can be reached but is concerned that not enough substantive cuts are being made to ward off future deficits.

"I want the city to cut spending but I'm not sure we have to do it the way the city manager recommended," she says.

While Ghiz doesn't want to impose new fees, as the city manager proposed, she wants to streamline how the city doles out money for social-service agencies. Ghiz wants to combine resources with Hamilton County and develop a joint process that has more accountability. Currently some smaller agencies -- known as Tier B and Tier C groups -- have little oversight.

"This isn't people being hateful," Ghiz says. "This is public money, and we have to be accountable for it."

Job cuts
Cincinnati's general fund budget -- which pays for most services such as trash pickup, snow removal and road repair -- totals $366 million this year and would be $360 million in 2008 under Dohoney's proposal.

The city's cash reserves, which currently total about 2.46 percent of the general fund, would rise to 8.1 percent under Dohoney's budget -- still well below the 10 percent standard.

Other council members who aren't part of the Fiscal Five were optimistic about this year's budget negotiations.

"I like the mayor's budget," says Vice Mayor David Crowley, a Democrat. "He's addressed a lot of the things that I would like to see included that were cut out of the city manager's (budget)."

Under both Dohoney and Mallory's proposals, the city would continue to reduce the city's workforce, mostly by offering incentives for early retirement and abolishing some vacant positions. Overall, they want to eliminate 92 full-time positions. At the same time, they propose adding 20 positions in safety-related areas, primarily the police and fire departments.

If enough people don't leave the city's payroll, Dohoney warned in a memo, "The city administration will work to find existing positions for displaced employees if possible; however, the elimination of specialized positions in the budget could result in layoffs."

Council will spend most of December hashing out the budget. A public hearing is scheduled for 6 p.m. Dec. 10 at City Hall, and council will hold working sessions Dec. 10 and 17.

For his part, Crowley wants to find extra money to restore the remaining $75,000 cut proposed for social services, along with $150,000 for a Northside housing project. Despite the potential for conflict, he doesn't expect the all-out political warfare of last winter.

"Last year's experience taught us all a lesson," Crowley says. "It wasn't a positive experience for anyone. Everyone is looking for more compromise and consensus."