Union rallies after news of Phoenix budget deficit - FOX5 Vegas - KVVU


Union rallies after news of Phoenix budget deficit

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Union members of AFSCME Local 2384 rally outside Phoenix City Hall on Thursday morning. (Source: CBS 5 News) Union members of AFSCME Local 2384 rally outside Phoenix City Hall on Thursday morning. (Source: CBS 5 News)

Phoenix residents receiving water services likely got the "Phoenix At Your Service" newsletter in the mail recently, in which one headline reads "Year In Review: 2013 was an outstanding year for the city."

Further down the front page, it says "City finances remain strong." 

CBS 5 News asked acting City Manager Ed Zuercher if those headlines were a bit misleading considering the city is facing a budget deficit ranging from $26 million to $52 million for the current fiscal year and next. However, the deficit's number has been pegged at around $40 million.

"That can be deceptive. The city had an outstanding year in the provision of services," Zuercher said.

"I would not have chosen that headline knowing what I know now," Zuercher admitted.

He said the writing has been on the wall in recent months. Revenue has been steadily decreasing.

"It wasn't a surprise that we have been short but we had to put it all together into one number, and I know that number was surprising to people," Zuercher said.

But Councilman Michael Nowakowski said he was caught off guard there's a multi-million dollar shortfall in the first place.

"For the last year things were looking really well," Nowakowski said.

Luis Schmidt, president of AFSCME Local 2384, which represents 1,900 city employees, felt just as blindsided and worried about what will be cut in order to mend the gap.

"Our employees are in our fourth year of concessions and [they have given] ... over 350,000 hours furloughed to the city," Schmidt explained.

Members of the chapter rallied outside Phoenix City Hall on Thursday morning to persuade city leaders to avoid budget cuts that could affect their pensions.

More than 100 workers began marching about 7 a.m.

About 1,200 union employees were invited.

According to a post on the union's Facebook page, the workers "need to be visible and vocal to the decision makers, and make sure they know that we expect a FAIR CONTRACT."

CBS 5 News asked the city how it got in the position in the first place.

It's safe to say some on the City Council had the wrong idea about the city's finances.

"The city of Phoenix had a deficit of $277 million and through effective governing, and truly a lot of teamwork ... the city of Phoenix found its way out of that deficit, things were looking good," said Councilman Daniel Valenzuela.

That was until Monday, when Valenzuela learned of the deficit facing the city.

"I want to know exactly how we got to that deficit," he said.

Zuercher said that multi-million dollar deficit comes down to expenses versus revenue.

"The amount of revenue that we needed to cover our ongoing costs was not enough so we have to reduce our expenses," Zuercher said.

In other words, he said, previous revenue projections were a bit overstated. City employee pension, healthcare, and industrial insurance costs have all grown. And there's more.

"We're saying we need to invest a minimum of $10 million a year in replacing more than vehicle maintenance. It's replacing our big pieces of equipment, fire pumpers, heavy road equipment, etc.," he explained

Meanwhile, Nowakowski said he understands the concern about what's going to be cut, but said it's too early to know what could be on the chopping block.

"Until we get that full report and we look at each itemized item, and then we find out our suggested cuts, then that's when we can start to fight for more police officers, keeping our libraries open, our senior programs, our parks, etc," he said.

CBS 5 News asked Zuercher if residents should be worried about city services.

"We can do this as a city, we've done it before. And we do it in cooperation with our employees and with the community," he replied.

Zuercher will present his "trial budget" to the City Council on in late March. Then there will be 20 public hearings on the budget and a final City Council vote in May.

Copyright 2013 CBS 5 (KPHO Broadcasting Corporation). All rights reserved.

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