Fixing Metro’s Current Year Budget
Since the comptroller’s visit and announcement that Metro’s budget would not be approved by the state, there has been an understandable amount of speculation and anxiety regarding the state of Metro’s finances. Many of you may be wondering, “What does this all mean? Will Metro shut down? Will the state takeover? How will Metro balance the budget in such short notice?” These are all valid and fair questions that I’ve attempted to shed light on below.
I thought the budget was passed in June, what happened?
The budget submitted in June included revenue that never actually came to fruition and was therefore deemed unrealistic. The June budget included the following items:
- $30M for the proposed parking meter sale
- $11.5M for the proposed sale of the energy system
Since the budget was passed over the summer, it has been discovered that these sales may not happen, therefore creating a $41.5 million dollar hole in the budget that needs to be accounted for.
What happens if the new budget is not submitted in time?
The comptroller gave Metro until the end of December to submit a realistic budget for the current year. Without a balanced budget, the County runs the risk of the State taking over Metro’s finances. Metro is not currently at a high risk for this scenario as many are working tirelessly to come to a solution.
How will Metro make up for the $41.5 million hole?
Last night, Metro’s Finance Director Mr. Kevin Crumbo shared a “Corrective Action Plan” with the budget committee. The plan includes $33.9M in new revenues. Mr. Crumbo and his team should be commended for identifying these additional sources of revenues in such a short time. Unfortunately, the plan also includes a $7.6M in reduction in expenditure. The reduction in expenditure comes from the following areas:
- $2.6M reduction/savings from Metro departments budget
- $5M impoundment of the Barnes Funds
What does this mean for the Barnes Fund and Metro Services?
The Barnes Fund makes competitive grants to nonprofit housing developers to increase affordable housing options for Nashvillians. The problem with the impoundment is that any withholding of funds could result in the collapse of a deal or initiative that the nonprofit housing developers had already negotiated.
I understand that tough decisions must be made to get us out of the hole, however, I do not support the impoundment (take back of funds) of the Barnes Fund. While the administration explained that the impoundment is not a budget cut but rather a budget delay, the impoundment of funds could have many unfortunate and unintended consequences.
- For example: one of the organizations impacted by this cut is a minority-owned business that was going to build a unit with 81 affordable homes. The loss could create a potential loss of those homes.
As we continue to grapple with and find solutions to the financial mess we are in, it is important that our decision-making process considers and assesses the impact on Metro residents, and especially the most vulnerable of our residents. My colleagues and I are committed to monitoring the situation and ensuring that the money to the Barnes Fund is replenished as quickly as possible.
Another concern I have is regarding the $2.6M reduction to Metro services. While cost reduction and removing excess is important, it is important these reductions/savings do not affect essential services. My colleagues and I will also be monitoring the impact of this budget reduction closely.
Does the Council have a say in the new budget?
No. According to the Metro Charter, the responsibility for a mid-year budget lies solely with the executive branch (mayor & his administration). Therefore this plan and budget does not require council approval.
The comptroller has approved the updated budget and the risk of a potential takeover has been averted. However, the county’s financial ordeal is not over. Next year’s budget season will be here soon and as a city and a Council, we want to ensure that we do not go through this situation again. It is up to the Council and administration to ensure that the FY21 budget is structurally sound.
As we inch closer to budget season, it is imperative that the Council engage in difficult and continuous conversation regarding Metro finances. I am committed to starting this conversation as soon as possible and remaining transparent with you all throughout this arduous and overwhelming process.
As always, I welcome your comments, questions and suggestions.
Thank you Zulfat! This is helpful information.
I appreciate you making this big mess understandable.
Can you clarify where the funds came from under Program reimbursements- Sheriff/US Marshall Service? Did these have anything to do with ICE?
I don’t know but I will ask and update. Thanks
Here is the response from the mayor’s office
“The arrangement is under an existing contract with the US Marshall Service. DCSO is providing 100 available beds to the Marshall Service at a rate of $61/day. This arrangement also requires an additional 20 DCSO correction officers. It does not involve immigration/ICE”.
Many thanks for your thoughtful explanation.
Councilwoman Zulfat, as a concerned Nashvillian I really appreciate how well you’ve explained our budget crisis. Thank you!