"The structure of local government has permanently altered," Hein told council members in his memo. "Tough decisions must be made to prioritize resources."
Hein proposed a mix of financial maneuvers to get through the end of the fiscal year on June 30, 2009, including $1 million in spending cutbacks on Parks and Recreation classes, golf courses and the Tucson Convention Center; collecting an additional $2.5 million in court fees; reducing the amount of money the city provides for the bus system by $3 million; and saving $4 million by delaying the training of new police officers.
Hein also planned to dip into the city's reserves for $5 million and defer a contested $2.1 million payment to the state.
The city's problems stem from the country's ongoing economic crunch. With the local homebuilding industry collapsing and consumers trimming spending, sales-tax revenues, which typically grow year to year, are about $6.5 million behind last year's figures through the first five months of the fiscal year. On top of that, revenues that the city receives from the state have dropped another $1.5 million.
If the slump continues, Hein warns that next year, the city could end up collecting as much money as it did in 2004 while paying the expenses of government in 2010.
"Either you have to peel back all of your expenses while at the same time compensation and liabilities have grown," Hein says, "or you've got to change the amount of services you provide."
Unless those changes are made, Hein estimates that the city could be facing a shortfall of more than $70 million in the 2009-2010 fiscal year.
He provided the council with a lengthy list of cuts to consider for the next fiscal year, including scrapping the city's Urban Planning and Design Department; cutting back funding for outside agencies; eliminating funding for the city's Channel 12 and public-access stations; more reductions in spending on the Tucson Convention Center and Sun Tran; and reducing benefits for employees.
Council members, who were scheduled to discuss this year's $31 million shortfall on Tuesday, Dec. 9, had mixed reactions to Hein's memo.
Ward 6 Councilwoman Nina Trasoff praised Hein's "carefully reasoned" plan, although she called this year's cuts "painful."
"There is no cut in there that I like, but there are cuts that have to be made, because the money isn't there," Trasoff said. "But we have to be careful with this to make adjustments as needed."
In particular, Trasoff cautioned that if the police force were to experience attrition, the staff would have to be able to get another training academy underway.
Ward 3 Councilwoman Karin Uhlich also expressed concern about delaying police training.
"What I hear across all the neighborhoods in Ward 3 is that fully staffing and sustaining public safety is a real priority. People want to make sure that we're not cutting basic, core public-safety services."
Uhlich said that in general, "the City Manager's Office has done a pretty good job of trying to help us identify options for balancing this fiscal year, even though many of them are one-time savings."
Ward 2 Councilman Rodney Glassman didn't address specific cuts, but said he would emphasize spending on police, fire, transportation and parks ahead of other departments.
Ward 5 Councilman Steve Leal said Hein's "vision of core services is different from mine. There are some programs that save us money by engaging in prevention."
Leal said he wanted to offer more creative solutions.
"The community expects us to try to figure things out," says Leal, who wants to see the city review many expenses, such as how much it pays city staffers to be on-call.
Leal suggested the city could bring in money by increasing the value of a parcel of land that it owns on the southeast side by rezoning it for development before the land is sold to a homebuilder.
He also proposed that the city start a towing business in conjunction with Pima County. Leal estimates that Tucson police officers order 14,000 cars a year towed to an impound lot by private trucks.
"How come we're not doing this?" Leal asks.
