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Oklahoma City Council adopts budget for fiscal year 2021

Post Date:06/16/2020 3:44 PM

The Oklahoma City Council on Tuesday adopted the City Manager’s $1.66 billion budget for fiscal year 2021, which begins July 1.

“The COVID-19 pandemic changed the economic outlook significantly, and forced us to start a second budget process just as we were wrapping up the original budget process,” said City Manager Craig Freeman. “Department directors stepped up with proposals that will save money while maintaining core services and minimizing decreases in service levels. Difficult choices were made to reduce costs while minimizing the number of employees affected by the cut.”

This year’s initial budget process began with a budget workshop in February. The City Manager introduced the proposed budget May 26. Budget presentations were also part of Council meetings on June 2 and June 9 before Tuesday’s vote for adoption.

Federal relief funding

The City’s total FY 2021 budget would be 2.9% smaller than the amended FY 2020 budget without federal Coronavirus Aid, Relief and Economic Security (CARES) Act funding. The $114.3 million in available CARES Act reimbursements boosts the City budget to 4.4% ($70.3 million) above FY 2020.

The City’s preliminary plan is to use the funding across three major categories:

  • $59.3 million for the City’s COVID-19 response expenditures
  • $28.8 million for testing and tracing
  • $26.3 million for community support

City response expenditures include a variety of direct costs related to the pandemic, and, if allowed, to replace lost revenue caused by the pandemic’s substantial economic effects. The Council supports new federal legislation that would allow funds to replace lost revenue.

Testing and tracing expenses could include the creation, implementation and operation of a local program in coordination with existing testing and tracing efforts. The community support expenses could include grants and loans for businesses and nonprofits, housing or utility cost assistance, food distribution, job training or placement, homeless outreach and more.

Projected revenue decline

The Finance Department estimates sales tax revenue will decline by about 5% in FY 2021. Sales tax is the largest single source of revenue for the City, making up 48% of operating revenue.

A decline of 5% would be in the neighborhood of the worst in Oklahoma City’s modern history. The biggest year-over-year decline during the 1980s oil collapse was 4.7% in FY 1987, and the worst in the last 40 years was 7.3% during the Great Recession in FY 2010.

Oklahoma is the only state in the U.S. where state law prohibits cities from using property tax for operations. Property tax is a more stable revenue source than sales tax. One of the City’s top priorities for the recent session of the Oklahoma State Legislature was for a new law allowing municipalities to partially fund public safety operations with property taxes, but it did not win passage.

Staff changes

The FY 2021 budget includes a net decrease of 168 funded positions on City staff, to a total of 4,701.

Of those 168 positions, 112 are eliminated, and 56 are frozen but currently vacant positions. Positions that are frozen aren’t funded in the budget, but are identified as the top priorities to be funded again when revenue recovers.

Of the 112 eliminated positions, 20 are in Development Services, 20 are in Utilities, 13 are in OKC Parks, 12 are civilian positions in the Police Department and 47 are from other departments. Most are vacant.

All of the frozen positions are vacant, including 34 police officer positions and 21 firefighter positions.

The Human Resources Department has been working with employees in eliminated positions to find other openings on City staff that are not subject to the hiring freeze.

General Fund and other details

The General Fund budget, which pays for most day-to-day City services, is $457 million, a 5.6% decrease from the current fiscal year’s amended budget. The primary factor for the decrease is reduced sales tax revenue from the coronavirus pandemic’s economic fallout.

Public safety makes up 66% of the General Fund, followed by public services at 15%, culture and recreation at 10% and general government at 8%.

The budget is guided by feedback received from an annual resident survey. Information from the survey also helps the City Council set priorities. Those priorities are:

  • Promote safe, secure and thriving neighborhoods.
  • Develop a transportation system that works for all residents.
  • Maintain strong financial management.
  • Enhance recreational opportunities and community wellness.
  • Encourage a robust local economy.
  • Uphold high standards for all City services.
  • Continue to pursue social and criminal justice reforms.

You can review the budget book online at okc.gov. You can also download the overview presentation from the May 26 Council meeting, and watch it online on the City’s YouTube channel in the video for the May 26 meeting.

# # #

Media Contact
Kristy Yager
(405) 297-2550
kristy.yager@okc.gov

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