Fresh Loaf

And isn’t it ironic? A little too ironic, don’cha think?

Earlier this month, Gov. Sonny Perdue announced that state revenues were in the toilet, budget estimates were projecting a $1.6 billion ( yes, that’s a “B”) shortfall and that he was considering raising most people’s property taxes.

Hmm. This reminds us of an earlier situation involving a large government entity. We just can’t quite put our finger on it…

Oh, yeah – It’s Atlanta! Remember when CL broke the news back in January about the city budget crisis and the media shit-storm that followed?

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In a few hours, the latest round of head-butting between the Atlanta City Council and Mayor Shirley Franklin will commence. This time, the issue is the recently shuttered Fire Station #7, which the mayor ordered closed in July as part of $21.6 million in city budget cuts. Located on Whitehall Street just south of the I-20 overpass, #7 had been the city’s oldest fire station still in service.

Councilman Ceasar Mitchell has proposed legislation to reopen #7 by skimming the $1.12 million in needed operating funds from a number of other sources, such as the annual budgets for consulting services, travel and office supplies. which held the distinction of being Atlanta’s oldest station still in service, (more…)

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Former Atlanta Councilwoman Debi Starnes, who has served for the past year or so as Mayor Shirley Franklin’s homeless czar (czarina?), found herself dropped from the city payroll last week.

But, unlike other city employees who fell victim to the latest round of layoffs, Starnes is planning to keep her job. The deal she worked out with Franklin, a personal friend, is that she can stay on as the mayor’s policy adviser on homeless issues as long as she finds private funds to pay her way.

“I have to raise the money to cover my salary,” which totals $96,000, Starnes explains. “It’s the right thing to do. When the city is so broke it’s laying off firemen, it doesn’t make sense to keep funding my position.”

Although Starnes hasn’t started looking for donations yet, she says she intends to find new sources so she won’t cannibalize money that already flows to the Regional Commission on Homelessness, the local umbrella program administered by the United Way. Starnes, a longtime homeless advocate with a doctorate in community psychology, represents Atlanta on the Commission, along with Franklin.

The city’s current budget crunch won’t affect the operations of such city homeless initiatives as the Gateway Center, Starnes says, because it’s funded and staffed by the Commission, which has collected $50 million from public and private sources.

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THIS TIME IT’S PERSONNEL: City Council unanimously passes an ordinance requiring the mayor to get its approval before making additions or reductions to the city’s personnel, the latest in an ongoing melodrama between the council and mayor.

DEER IN HEADLINES: A six-legged deer found in Rome, Ga., is understandably popular.

BUSH: Went down to Georgia.

CHILDRESS: Hawks’ restricted free agent is considering an offer to play in Greece.

RIGHT TO AIR ARMS? U.S. House Homeland Security Committee chairman doesn’t think we should have guns at the airport.

ROCK DRUMMERS: Require at least as much physical endurance as soccer players, according to a recent British study that used Blondie drummer Clem Burke as its test subject.

LOOKS GOOD ON PAPER: Researchers and companies like Xerox are backing away from utopian visions of a paperless society that became popular in the late 20th century, using the phrase “paper-less” instead to focus on the more pragmatic, but less glamorous, goal of simply not wasting as much paper as we do now.

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Long-time readers of Fresh Loaf are already aware that Mayor Shirley Franklin does not always handle criticism or opposition with, um, grace (Two examples: 1, 2).

Tonight the rest of Atlanta will get a look at Franklin’s temper, thanks to TV footage of Her Excellency speaking at the ceremony to mark the closing of West End’s Fire Station 7.

In response to jeers from city residents protesting the station’s closure, the Mayor halted her speech and announced to protestors:

“Now you know what’s gonna happen, these gentlemen and ladies have never seen this Philadelphia side of me, but I’m gonna come over there, okay.”

She didn’t explain what she meant by “this Philadelphia side of me” but her tone of voice and body language suggested she didn’t have brotherly love in mind.

Franklin then stepped away from the podium and into the audience.

“Let’s have the conversation. Let’s have it,” she yelled.

What’s with Franklin’s defiant attitude?

It was her administration’s mismanagement of the budget that precipitated the city’s budget crisis and the fire station’s closing. A little contrition would go a long way, but Franklin seems incapable of it at the moment.

The Franklin on TV tonight is smug and bratty; nothing like the earnest public servant twice elected by Atlantans to fix their city’s government.

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The Number 7 fire station at 535 W. Whitehall St. between Castleberry Hills and the West End, next to the I-20 overpass, was closed today as the most visible element of a cost-cutting plan by Mayor Shirley Franklin to shave $21.6 million off the city budget.

According to the AJC and local TV stations, about 30 local residents showed up to protest the shuttering of the station. Dating to 1910, it’s the city’s oldest, and definitely one of the most picturesque, stations. There’s been no word on what would be done with the building, but if the city decides to sell it, Station 7 could be a hot property.

The Net is ablaze, ahem, with commentary about the mayor’s decision. Kwabena Nkromo, chairman of the surrounding Neighborhood Planning Unit T, sent us an op-ed on the issue:

It is not too late for Mayor Franklin to show the courage and integrity to admit that, in this case, she is dead wrong. No matter what pressure she may be under, she has no moral or political right to tell my neighbors that we alone must bear the sacrifice of greater exposure to the risk catastrophic harm that a poorer fire response time will pose. It doesn’t take a competent fire chief to understand when a station handles an average of 20 calls per day, it is not arbitrarily dispensable. We demand that the city not close historic Fire Station #7 in favor of a budget plan that does not disproportionately impact public safety for the residents of only certain parts of the city.

We also enjoyed a posting by Firegeezer, who claims to have “The hottest fire blog on the Web!”

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If you hadn’t noticed, the Atlanta budget crisis has resulted in some raw nerves and strained relations down at City Hall. The process has gone something like this: Mayor Shirley Franklin announces budget cuts. The City Council criticizes her cuts, but asks her to make some more. Franklin makes more cuts. The Council criticizes the new cuts. And so on.

On Friday, Council President Lisa Borders released a formal response to the Mayor’s announcement of $21.6 million in cuts, which include closing a fire station and laying off several dozen firefighters:

I am disappointed that additional personnel are being laid off by the Mayor as a way of achieving the City Council’s mandated 2.5 percent cut in the General Fund budget. Instead of reducing costs by eliminating jobs first, we should be more innovative in the way we do business and deliver services to residents.

A few hours later, Franklin sent this e-mail response directly to Borders:

You will have your chance as Mayor should you be successful in your election.

Snap! And minutes later, Franklin added:

The Council added costs to the budget and then gave me the authority to make the cuts after refusing to do so themselves. The Council and Chairman [Howard] Shook punted with your concurrence and instigation. I made the decisions for cuts the Council didn’t. I’m OK with that because that’s what Mayors have done all over America for years.

The ball’s in Border’s court:

I have great respect for you and the job you have done as Mayor of our beloved city. But let’s be clear: the Council is a 15-armed octopus and to suggest that I could “instigate” a unanimous vote – especially on something as complicated and critical as this monumental budget gap – is a stretch, to put it mildly. I certainly don’t have to tell someone with your experience that disagreements over policy choices are part of a healthy, natural tension between our branches of government.

Now, we should point out that we abbreviated the discourse slightly. Both Franklin and Borders acknowledged that the city is better off when the Mayor and Council work together and they expressed a desire to do so in the future.

But while it’s easy to imagine those two women settling their differences cordially and professionally, there are several members of the Council – C.T. Martin, for starters – who make collaboration between the administration and the Council all but impossible. Which means we’re probably stuck with the current back-and-forth.

Unfortunately, we’re probably not in the home stretch. Later this week, Atlanta officials expect to learn from Fulton County how much the city will be able to collect in property taxes in coming months. Because of assessment appeals, the figure could be much lower than the one the Council used when it approved the city budget last month. If so, there could be more budget cuts – and more bickering – in the city’s future.

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The budgetary back-and-forth between Shirley Franklin and the Atlanta City Council took on the feel of a cut-throat, high-stakes poker match this past Friday, with the mayor effectively calling their bet – and raising.

When the Council adopted a $571 million city budget for 2009 at the end of June, it sidestepped a proposed tax increase by tasking Franklin to trim $14.6 million from city expenses – on top of more than $57 million in cuts she’d already undertaken to avoid a projected budget shortfall.

On Friday, the mayor upped the ante, instead slashing $21.6 million – nearly 50 percent more than requested – from the budget, at the cost of a West End fire station, a streetlight maintenance contract, vacant police jobs and 78 city employees, including 34 firefighters. That’s in addition to the more than 400 staffers laid off in May.

Franklin didn’t maintain a good poker face; clearly angry, she blamed the Council for forcing her hand. “Their actions will affect the city for a long time to come,” she said.

Minutes later, Council President Lisa Borders countered that the choices were Franklin’s and would be reviewed – and possibly reversed – by the Council. “To indicate that the Council mandated cuts to police and fire is disingenuous,” she said. “We’re not done yet with these cuts.”

Unfortunately, that isn’t all they’re not done with.

On Monday, a judge ordered that, for now, Atlanta and other municipalities within Fulton County could only collect taxes based on 2007 values for most commercial properties – not the 2008 reassessments, which were about 20 percent higher.

No one at City Hall yet knows the full impact of the ruling, but it could mean city revenue would be tens of millions less than anticipated in coming months. Under the judge’s decision, additional taxes cannot be collected on assessments under appeal until more than half of the 15,000 appeals are resolved by the county, a process that likely will take months.

In fact, Robert Proctor, the attorney challenging the county’s assessments, has filed a new lawsuit challenging the certification of tax officials hearing appeals. If his suit succeeds, the appeals process would grind to a halt, adding more months to the delay in tax collections.

Borders said she hopes to learn the scope of the damage by early next week. She also is waiting to hear from city attorneys on the legality of re-opening the budget process, if that step becomes necessary. When it approved the city budget in June, the Council likewise set the tax rate for the coming year. It’s unknown whether the city can revisit that decision so soon.

Said Borders: “This situation is unprecedented.”

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“The Council had the authority to do this but it is an unwise business decision and represents one of the worst public policy decisions I have seen in my 20 year professional career,”

-Atlanta Mayor Shirley Franklin, on the City Council’s decision today to not to raise property taxes to offset the city’s budget shortfall.

I wonder where her own staff’s chronic mismanagement of the city’s budget office ranks on Franklin’s policy poop list.

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Mayor Shirley Franklin is none-too-pleased with the city council’s adopted budget that actually lowers property taxes and cuts an additional 2.5 percent from departments.

In fact, she calls it the worst decision she’s seen in her almost-20 year professional career.

UPDATE: The mayor’s office has release a revised statement that has the correct dollar figures and a mysteriously removed exclamation point. Yet no punctuation has replaced it… scandal!

Original statement follows after the jump. Here’s the revised one:

The Atlanta City Council is now asking the Administration to make an additional $14.6 million in cuts without cutting personnel. As I stated earlier, anyone who believes that the City can cut $14.6 million (the proposed Administration’s budget already included almost $60 million in cuts) without laying off current employees does not understand the operations of city government. It cannot be done, responsibly

This is a risky choice in a bad economy and the people of Atlanta will have to bear the burden of the Council’s decision to not do what is in the best interest of the residents, both short term and long term.

To balance the budget on the backs of employees is irresponsible, when they were offered an alternative of a modest tax increase in an effort to preserve gains in public safety and to maintain core services. The Council had the authority to do this but it is an unwise business decision and represents one of the worst public policy decisions I have seen in my 20 year professional career and it will have negative ramifications for the quality of life for the people of Atlanta.

(more…)

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Here at CL, we’d been reporting that an Atlanta tax increase seemed increasingly inevitable. Well, the same Council members who seemed so fatalistic last week got together last night and cobbled together an alternative plan that appears to allow them to escape Mayor Shirley Franklin’s proposed tax hike.

Just minutes ago – with a curious Franklin herself sitting in the audience – the Council voted 14-0 (with Lamar Willis walking in moments later) to adopt an amended budget that wipes out the .43-mill tax increase, cuts all departments by an additional 2.5 percent and even includes a teeny-tiny tax rate rollback that will save the owner of a $200,000 home about seven bucks.

However, the budget the Council is looking to pass is $570.8 million, about $13 million less than the Mayor’s proposal. When we figure out how they made these numbers work out, we’ll update this post.

Meanwhile, the Council is on recess and will re-convene shortly after lunchtime to finish up on this stunning turn of events. Stay tuned or head down to City Hall to catch the action yourself!

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An Atlanta City Council member complained to me recently that the capitol city was taking a drubbing in the media over Mayor Franklin’s proposed tax increase, while other tax-hiking entities were getting off scot-free.

After a bit of research, I determined she’s right – depending on your definition of tax increase.

At the risk of boring the tax-savvy, I’ll explain that the amount you pay in property taxes is determined by two variables – your property assessment and the millage rate – and one constant, your total exemptions. If your assessment doesn’t change, but the millage rate is increased, you pay more. If the millage rate stays the same, but your assessment goes up, you also pay more – what is commonly called a “back-door” tax increase.

A few weeks ago, Fulton County, which oversees the assessment process, announced that property valuations had risen a whopping 19 percent, mostly due to higher assessments for commercial property. This means that Fulton, its 12 cities and two school systems, can all expect a tax-revenue windfall even without raising millage rates.

For Franklin, that’s not good enough. In order to erase a projected $40 million city budget shortfall, she initially proposed a tax hike of about 1.7 mills, then dropped that to .43 mills, based on the county’s assessment estimates. This would mean the owner of a $200,000 house would pay an extra $24.50 a year in property taxes, assuming a standard homestead exemption.

That’s fairly meager compared to the $2,400 total tax bill for the example we’re describing, but it still represents a tax hike. The Atlanta Board of Education, on the other hand, plans to keep its tax rate – at 22.65 mills, more than twice the city’s proposed rate of 9.35 mills – the same as last year.

But just by virtue of the higher assessments, the school board expects to collect an extra $88 million in property taxes next year, more than twice the $40 million the city wants to raise by increasing its tax rate.

In other words, the schools’ back-door increase would bring in far more additional tax revenue than the city’s proposed up-front tax hike. And the Council member was certainly right about there being no public outcry over the back-door increase. Should there be?

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It’s no fun right now to be Atlanta Chief Financial Officer Janice Davis.

No surprise here, but Davis is high on the list of those being blamed for the fiscal crisis that just prompted Mayor Shirley Franklin to lay off more than 400 city workers and propose a $40 million tax increase.

For her part, Davis has publicly pointed the finger at Atlanta’s longstanding accounting practices; city bureaucrats who don’t follow vending procedures; department heads who overspend their budgets; and her own staff. But, unless we missed something, she has yet to claim responsibility for mistakes that helped derail the city budget – which, in turn, has some Council members feeling less forgiving toward her.

According to City Hall scuttlebutt, there’s a tug-of-war going on now between Council members who want to give Davis the sack and those who believe the city would be in deeper doo-doo if it gets rid of her.

As one nervous Council member puts it: “Janice is one of three people who understands the Mayor’s proposed budget [the others being Chief Operating Officer Greg Giornelli and Franklin herself] and the only one who answers to us. If she leaves, we’re screwed.”

Right now, the ones calling for Davis’ head are a distinct minority. But if one of them were to make an official proposal that she be fired, the other Council members would be forced into the politically awkward position of a public vote a year before city elections.

Voting to keep Davis could be criticized as tolerating incompetence, while canning her could destroy any chance of coming up with a workable solution to the budget problems. Come to think of it, it can’t be much fun being a Council member right now.

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They say success has many fathers, while failure is an orphan. It may say something about Mayor Shirley Franklin’s proposed budget that it, too, is an orphan – at least where the City Council is concerned.

Let us explain: Typically, when the Mayor has legislation she wants to bring before the Council, she gets a willing Council member to carry it. But this budget includes hundreds of layoffs and a $40 million tax increase. So, for the first time in her tenure, Franklin couldn’t find any Council member willing to put his or her name on the legislation. Even Cleta Winslow, the Mayor’s most ardent loyalist, reputedly read Franklin’s staff the riot act last week. A panic ensued among the Mayor’s top brass over how to get the budget package formally introduced at today’s Council meeting, as required by law.

The compromise was a hastily called special meeting of the Council Finance Committee, which voted – under sometimes vocal protest – to pass the budget items on to the full Council in such a way that no individual member would be regarded as a sponsor. The final vote came moments before the Council meeting was called to order.

Now that the budget proposal has been introduced, you can expect to hear plenty of wailing and gnashing of teeth from the Council before it must approve a final version by June 30.