Louisville City Hall

LOUISVILLE, Ky. (WDRB) – Facing a potential city budget shortfall of $65 million over the next four years, Louisville Mayor Greg Fischer warned Thursday that Metro government may need to lay off public workers, stop services and make other moves to handle state-ordered increases in public pension costs.

Fischer said in a press release that he plans to determine how to fill the shortfall by mid-March, but he suggested belt-tightening measures could include eliminating the ShotSpotter gunshot detection technology; closing two of the city’s 21 fire stations; shutting down four of the five public pools; closing four public golf courses; ceasing operations of the Belle of Louisville; and partially privatizing the Louisville Zoo.

Mayor Fischer also sent an email to city employees. The text from that email is pasted below:

Dear employees:

Today I publicly outlined the potential cuts to city services and staff that, without additional revenue, would be necessary to address an expected budget gap of $65 million over the next four years.

The potential cuts range from staffing reductions in nearly every department, including police, fire and emergency services, as well as closing library branches, fire stations, health clinics, community centers, pools and city golf courses. Other potential cuts include eliminating all Metro funding for Brightside and the Belle of Louisville, making the Louisville Zoo independently operated, turning Youth Detention Services back over to the state, and eliminating all Neighborhood Development Funds allocated by Metro Council and External Agency Funds allocated to local nonprofits for arts and social and community services. There would be 317 layoffs in FY20 alone.

This list of potential cuts we face without additional revenue is long, and the impact would be devastating for our entire community.

I want you to know that my team and I are working hard with Metro Council on establishing the additional revenue that would help us avoid such difficult cuts.

I appreciate all the hard work that you do every day to provide so many necessary services for the residents of this city. We run an efficient operation, and our city is seeing revenue growth.

But that growth is dwarfed by our increased pension obligation mandated by Frankfort. That obligation is expected to grow to a 12 percent increase each year through FY23, which amounts to $86 million in FY19, up from $77 million in FY18, $97 million in FY20, then to $136 million in FY23. The budget situation is especially difficult in the coming FY20, because in addition to the $10 million added to the city’s pension bill for FY19 year and another $10 million for FY20, the city faces a $15 million gap stemming from increased healthcare costs, a structural deficit created in FY19 and lower-than-projected revenues in the current fiscal year.

I know this is scary and may cause some personal anxiety. I want you to know I find these cuts unacceptable, and I will fight tirelessly to avoid them, because I believe in you and the services you provide our great residents.

My goal is to see this challenge resolved by mid- to late March.

Sincerely,

Mayor Greg Fischer

The possible solutions also include eliminating the Louisville Metro Police Department's June recruiting class and two classes next year, a move that would keep about 100 potential officers from joining, along with layoffs of 150 officers through 2023.

LMPD Chief Steve Conrad also sent an email his staff on Thursday:

Members of LMPD,

As conversations about the state of our budget and requirements of the pension fund continue to circulate and come before our leaders at Metro Council, I wanted to take a few minutes to reach out to you. I know talks of cuts and budget shortfalls cause a great deal of stress and concern for all of us as we continue to try to provide services needed to keep our neighborhoods safe.

So, I want you to know that I, along with the mayor and our command staff, are doing all we can to try to avoid cuts in our services and personnel.

A $65 million budget gap is expected Metro-wide over the next four years due to the requirements of the pension fund, all city agencies are looking at ways to meet that deficit. LMPD is no exception and because we have the largest budget in the city, we will be greatly impacted by that.

Our hope is that Metro Council will consider acting to increase revenue to off-set these obligations and spare us from having to make drastic cuts in our services.

If the Metro Council does not make the needed changes, we will be forced to make cuts I believe will significantly impact our service delivery to our city.

I hope all of this will remain “worst-case scenarios” that never come to pass. In the meantime, I am doing what I can to express the dire circumstances these cuts could have on our department and our community.

You will be receiving more information about this situation from the Mayor shortly.

Chief Steve Conrad

The city could also consider cuts and reductions that would affect every resident, including:

  • Move recycling and yard waste pickups to every other week
  • Reduce support for Waterfront park by $500,000
  • Close two Louisville Free Public Library branches

"This list of cuts is long, and the impact would be devastating," Fischer said. "But we’re required to balance our budget, and without a major source of new revenue, this is what it will take to fill the gap created by the Frankfort-mandated pension obligation."

The bleak outlook is the result of escalating pension costs “created by Frankfort’s years of inaction, exacerbated by the 2017 pension formula change,” Fischer, a Democrat, said. The state legislature is controlled by Republicans.

Under that change, according to Fischer’s office, Metro Louisville’s pension obligation is projected to climb by 12 percent increase each year through the fiscal year ending in June 2023. For instance, the city’s cost would rise from $77 million last year to $86 million this year, and $97 million the following year.

Council member Brent Ackerson told WDRB News last week that one option under consideration was raising the city's tax on insurance premiums, from 5 to 10 percent. 

Fischer's office mentioned in its news release that that tax was last increased "decades ago." 

In the release, Fischer’s office said the mayor has been working with Metro Council members on other ways to avoid the cuts. More information could be released early next week.

At the council's Democratic caucus meeting Thursday, some members said they haven't been consulted about the possible cuts, but council member Bill Hollander said the city has known about the budget impact for some time.

"We were told many times this is going to be a continuing and accelerating problem," he said.

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Digital Reporter

Marcus Green joined WDRB News in 2013 after 12 years as a staff writer at the Louisville Courier-Journal. He reports on transportation and local and state government.