My Strategic Plan for Oak Ridge
Lower Spending, Lower Property Taxes, Lower Debt
I firmly believe that these three goals are critical to achieving a successful future for Oak Ridge. It’s time to quit throwing money that we don’t have at our problems and start making sound, sensible financial decisions. With the goals of stabilizing and eventually reducing our property tax rate (I provide specifics on that below), reducing our debt and increasing our revenue base, these are my proposed solutions for a viable future:
- Spend Less. Council and the BOE should immediately and unanimously declare a spending freeze for at least the next two budget cycles. Oak Ridge has increased its city budget each and every year throughout the recent recession. We are not living in a bubble and cannot afford to continue down this path. There is no excuse to increase the annual budget until we get a handle on our financial affairs.
- Cut carefully and equitably. See below for how we can do this without sacrificing our quality of life.
- Establish a REAL debt policy that contains a debt ceiling and an aggressive debt reduction plan. This was promised to us by council and the city manager months ago. We no longer have the luxury of delaying this critical step.
- Reduce and reallocate. When funds go unspent, reduce the amount the following year and reallocate towards our debt or other needs. Do not use unspent funds for unplanned expenses. That’s what reserves are for.
- Get creative. Necessity is the mother of invention. Let’s work towards removing obstacles and creating mutually beneficial, affordable solutions. We all know that we have an abundance of vacant buildings. Let’s start putting them to use.
- Stop believing in the DOE Fairy. It’s time to quit believing that DOE will pay for our capital needs. Ten years ago, the entire high school project started with a false promise that DOE was going to foot the bill because they needed a world-class high school to attract future employees. Now, Oak Ridgers are left holding the bag on over $66 million of debt with no real increase in enrollment to show for it. Yet, we are contemplating a $6 million library expansion all because Mayor Beehan says that “DOE will pay for it.” No, no they won’t Mr. Mayor.
- Put all future debt obligations on the ballot. Personally, I don’t see how we can afford to go into further debt and, as a general rule, I do not support public/private partnerships that require general debt obligations. But, if opportunities come up that show real promise of increasing our revenue base, I believe that the voters should decide whether or not they want to take that risk.
Here is my column on how we can lower the property tax rate without sacrificing our quality of life:
The future of Oak Ridge is entirely dependent upon our ability to attract new residents and businesses. To do that, we must first acknowledge an unspoken truth: Outsiders view Oak Ridge as being too expensive. We MUST work to change that. Oak Ridge MUST become competitive.
Why do people say that it costs so much to live and work in Oak Ridge? What I hear is that our leases, properties, gas and even our groceries all cost more than our neighboring communities. I haven’t verified that to be the case, but those are things that the city government can’t (and shouldn’t) control. There is one definitive thing, however, that our city can control and it is substantial enough to change both the outflow and inflow of residents and businesses.
Of the surrounding communities, Roane, Anderson, Knox, Loudon and Blount, Oak Ridge has the second highest property tax rate at 4.74%. Like it or not, this one fact deters many people from ever looking at Oak Ridge as an option.
What would it take to be #7? Assuming an unchanged Anderson County rate of 2.35%, the Oak Ridge rate would need to drop from 2.39% to 1.72%. This would require a reduction in our annual budget of roughly $6 Million. I believe, that over the next 2-4 years, this is an achievable goal and I believe it can be done without sacrificing essential services or our quality of life.
The city’s Personnel Advisory Board, of which I am a member, is charged with recommending adjustments to the city Personnel Plan. Many of these policies have not changed in over twenty years. We recently looked at our Injury Leave policy and realized that it greatly exceeded both industry and federal standards. An adjustment to this one policy yielded a potential annual savings of nearly $70,000. As we continue to review and revise these policies, we could see additional annual savings in the range of $100,000-$500,000.
Rather than eliminate services, we could shift them to fee-based services. We enjoy a myriad of perks, but one example would be annual brush and trash pickup. If shifted to a fee-based system, yearly cost savings of this one line item would be $42,000.
As council member Ellen Smith and others have urged, we should combine duplicated departments that exist on both the city and school sides. If we were to combine just the technology and maintenance resources, there’s no telling how much we could save. We won’t know, though, until we dig in and do the work that it takes to find out.
We could also look at consolidating departments within the city. If the senior center were moved into the civic center which has its own staff, we could save the nearly $300,000 per year that that program costs.
Council member Chuck Hope has suggested shifting the entire Secret City Festival project over to a stand-alone, non-profit organization. That would save us the $50,000 blank check that the city writes every year as well as an untold fortune in city staff hours.
Combined, the city and schools see an annual staff turnover rate of about 5%. If we chose to not back-fill those positions and instead implemented policies and processes to better use existing staff, we could save $3.1 million and would be halfway to our goal!
Given the drop in enrollment at our schools, the city manager has suggested that we reduce our maintenance of effort obligation next year. Based on the school administration’s current enrollment projections, that could save us another $265,000.
Cutting the Chamber of Commerce and Convention and Visitor’s Bureau contracts by 15% could save $100,000 and foregoing a raise for city staff for a single year produces infinite annual savings.
I could go on, but there’s one other obvious beneficiary in all of this that I have yet to mention. You should have recently received your city tax notice. The reduction I am proposing comes out to about 28%. Go calculate what that would put back in your pocket and tell me it doesn’t get you excited about the possibilities.
Achieving optimal efficiency of our most valuable resources, time and money, is imperative to progress. Though not always immediately achievable, there is always a better way. However, unlike in our home and business lives, government rarely seeks that way until mandated by the taxpayer.
It’s not going to happen overnight. But it will never happen if we don’t, as a city, boldly declare that we will do it. So let’s do it. Let’s aim to be more competitive. Let’s shoot for 7th place!