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Council questions the city's efficiency

| Thursday, Aug. 14, 2003, 12:00 p.m.

A top aide to Mayor Tom Murphy told the City Council on Wednesday the city has cut all it possibly can without disrupting essential services. Some council members didn't buy it.

Director of Operations Bob Kennedy appeared before council yesterday to answer questions about the city's budget woes.

Murphy -- the target of many residents' fury over widespread layoffs and deep cuts in services -- didn't attend the meeting because he had a series of meetings that he could not rearrange, according to his spokesman, Craig Kwiecinski.

So the mayor sent his two top lieutenants, Kennedy and Executive Secretary Tom Cox, to answer council's questions. "The mayor takes this issue very seriously," Kwiecinski said, refusing to say with whom the mayor met yesterday morning.

Under Murphy, Kennedy said, spending will have increased only at the rate of inflation between 1993 and 2005. Adjusted for inflation, the city's spending actually will have fallen by 20 percent, or $60 million, by the end of 2005. The city's 2003 deficit is the result of slow revenue growth and an outdated tax structure, not increasing costs, he said.

"I know full well there is no fat left," Kennedy told council. "There is no fat left in our budget. There is no fat left in our work force."

Not so, said Councilman Alan Hertzberg. It's just that some of the fat is well protected, he said. Take the firefighters, for instance.

"Frankly, how did they end up with the (no-layoff) contract they have now, and how did it end up that (the contract) was cut right before the last election and that the mayor negotiated it and that they gave him their support in the last election?" Hertzberg said.

Kennedy didn't answer.

Most council members posed friendly questions to Kennedy. Was the administration willing to discuss a deal to save the jobs of recreation center employees• said Councilman Jim Motznik. Others questioned the mayor's willingness to overhaul the city's inner workings to make them run as efficiently as possible, and to erase annual budget deficits that have plagued the city for years.

On Aug. 6, Murphy announced the layoffs of 731 city workers and closings of several senior centers, most city swimming pools and all recreation centers in an effort to help fill the $40 million hole in the budget. He also wants to impose a 0.45 percent tax on the payrolls of for-profit businesses and increase the annual occupation tax to $52 from $10.

To do that, the city must further restrain its spending, Hertzberg said. The city has held to a "debt diet" of issuing no more debt than it retires in a given year, but it still has issued more debt than it should have, he said, calling city debt payments "completely out of control."

Between the cost of debt service, public safety -- fire, police and emergency medical technicians/paramedics -- and health care benefits, the city had just 29 percent of its operating budget left in 2002 to pay for other city services, according to Councilman Bill Peduto. By 2006, that figure could shrink to 12 percent, he said.

That's understandable, given the deal firefighters got in their 2002-05 contract, Peduto said. That agreement not only includes a no-layoff clause, but creates a new $50,360 position of master firefighter for someone with more than four years of experience, along with raises of 4 percent in 2002, 3.33 percent in 2003 and 3.5 percent in 2004 for all other pay grades, according to the City Council Budget Office.

The departments that can be cut haven't been trimmed enough, Peduto maintained.

Instead of simply asking for more money that would be wasted, he said, the city needs to become more efficient. That might require merging departments, bidding city services such as garbage collection to get the cheapest price or appointing someone to cut down on workplace injuries and reduce the $20 million a year the city pays in workers' compensation, he said.

"Don't tell me there's no fat," he said. "What we have to do is find a new way to operate."

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