Mayor proposes mid-year spending adjustment of $ 20 million

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Mayor Greg Fischer proposed a spending adjustment today to retain 20 million high-quality Louisville Metro Government (LMG) employees.

The proposed regulation, sponsored by Metro Council Chairman Bill Hollander and shared with other Council Chairs, will be discussed in the Committee on Budgets on December 9th and could be voted on by the full Council as early as December 16th.

The $ 20 million adjustment reflects savings from operating the LMG agencies as well as unexpected revenue growth in FY21, according to Monica Harmon, the city’s chief financial officer.

“The administration and council expected some savings from the agency due to the impact of COVID-19, with operational changes due to limited services early in FY21 and the recovery of certain expenses from federal grants,” she said, savings reflected in mayor’s expenses reflected priority # 1 in the FY22 budget, public safety. “However, the savings were greater than expected, which is reflected in this adjustment.”

The proposed funding would provide:

  • US $ 5 million in matching funds for a US $ 50 million federal grant to the Build Back Better Regional Challenge (BBRC) that the city is aiming for with eight partners. BBRC is a $ 1 billion grant program designed to help communities across the country accelerate their economic recovery from the coronavirus pandemic and build economies that are resilient to future economic shocks.
  • $ 5.7 million to purchase an additional fleet of vehicles primarily to replace obsolete plumbing and dump trucks on public works.
  • $ 12.8 million to the Office of Management and Budget for potential salary and wage adjustments – both unionized and non-union – necessary to meet market demands.

“This proposal builds on our work to improve vital urban services, retain the best and brightest city workers, and build sustainable, equitable economic recovery,” said Mayor Fischer. “I appreciate the partnership of the budget chairman Hollander and call on the entire council to approve this measure.”

Metro’s current turnover rate is 7.04% just five months into fiscal year start, and many of those who union rather than union say they are drawn into the private sector in large part by higher pay, said Ernestine Booth, LMG Human Resources Director, who added that the city’s pay quota is lower than the market.

“With limited funds in recent years, many of our union deals have included wage increases of zero to two percent, and our non-union grid hasn’t been adjusted since 2016,” Booth said, limiting LMG’s competitiveness with higher-paying local and national competitors.

In addition, Booth said, COVID-19 has created what the industry calls the “resignation tsunami” here and across the country, as employees expect more flexibility (remote working), higher wages and more paid time off. All of this has the potential to affect LMG’s ability to provide the high quality services that Louisville residents demand and deserve, she said.

Councilor Hollander agreed. “A better-than-expected revenue picture and federal funding have enabled us to address some of the salary issues that hinder our ability to hire and retain employees who are necessary to serve the public,” he said. “Council members have been discussing these issues for months and I look forward to considering this proposal in the Committee on Budgets on December 9th before the final decision is taken at the December 16th Council meeting.”


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