On October 29, 2009, Mayor Shirley Franklin, the City’s Chief Financial Officer, Jim Glass and Enterprise Assets Management Officer, Lisa Y. Gordon held a press conference to discuss Atlanta’s Five-Year Financial Plan. This five-year plan forecasts revenues through fiscal year 14 based on conservative economic assumptions—a slow recovery from the current recession with only historical-based growth thereafter—and projects expenses over the same period based on the level of City services in place today. Mayor Franklin stressed that, “Atlanta’s spending is balanced, we’re spending less than anticipated, revenue is slightly down, and operating a little better than $4 million to the good.”
The City of Atlanta, like all other major cities, are experiencing high-unemployment rates, slow spending, deteriorating public infrastructures (roads, bridges, traffic lights and the like), and a collapsed housing market, and it is against this backdrop that the Atlanta City government is operating. However, the Mayor along with CFO Jim Glass says that, “while Atlanta is not solid, the City is stable.” CFO Jim Glass says, “Atlanta is $4.8 million better than we expected.” During the press conference, Mayor Franklin, Jim Glass and Lisa Y. Gordon laid out both positive outcomes and projected challenges for the City of Atlanta.
Some of the positive outcomes that are projected in the City’s Five-year financial plan:
- The City produces annual surpluses each of the five years, ranging from a high of $27 million n FY10 to a low of $3 million in FY14.
- The baseline analysis includes a small number of expanded activities, including the maintenance of new BeltLine parks that will be brought online in the next five years; scheduled upgrades for the ERP system; and public safety radio system maintenance costs.
- For the first time in recent years, the City will build both a “rainy day” fund (also called a “catastrophic reserve” in the enabling legislation) and a capital reserve fund.
Some of the key financial and operational challenges that the City will have to address:
- Overall, revenue will grow marginally at best (only 1.4% per year).
- The baseline projections do not allow for any salary increases or performance-based pay adjustments during the five years. Allowing for 2.5% COLA each of the next five years would add $29 million to the FY14 budget.
- Outside the sale of the City jail, there are very limited cost saving opportunities as the City already has reduced its work force by 30% since 2001.
For additional positive outcomes and projected challenges click here.
Mayor Franklin explained that, “the depth of the recession is far greater than projected ten months ago. And, until that recovery occurs we are going to be hit with unemployment…the City of Atlanta’s unemployment rate is 1% higher than the State of Georgia’s and the State of Georgia’s unemployment rate is 1% higher than the national unemployment rate….we have stabilized the city’s finances but it can not be solid until thee recession is over.”