After managing through a more than $330 million deficit over the last two years, Phoenix officials have announced that they are projecting no deficit for the upcoming fiscal year.
"Revenues are improving and the city is successfully managing its expenses," said Mayor Greg Stanton. "Our city is not projecting a deficit for 2012-13, and I am cautiously optimistic about this budget outlook," he said.
Over the past two years, the city overcame a $277 million deficit in fiscal year 2010-11 and a $59 million deficit in 2011-12.
Many factors have contributed to the city's financial stability, including:
• Innovation and Efficiency savings of more than $40 million by streamlining the organization and reducing the workforce by 2,500 positions, resulting in the smallest number of employees per capita in 40 years (10.3 employees per 1,000 residents).
• Maintaining the city's AAA bond rating despite the economic downturn, allowing the city to use its good credit to refinance debt, saving more than $44 million in General Fund debt service payments.
• Increasing the contingency, or rainy day fund, to the highest level in the city's history, with nearly $36 million, or 3.4 percent of the city's General Fund operating budget.
• Maintaining the property tax rate at $1.82, resulting in a savings for Phoenix residents of $121 million over three years.
• Consolidating departments and functions of the city, such as combining the Planning, Development Services and Historic Preservation departments into one department - the Planning and Development Department.
• Reducing twice as many managers as general staff positions (management positions have been reduced by 22 percent, all other employees reduced by 11 percent).
• Reducing management layers and increasing the span of control ratio from 1 manager for every 5.3 employees to 1 for every 8 employees.
The City Council will received a briefing on the budget at its Jan. 24 meeting.