The City of New York Office of Management and Budget 75 Park Place « Now York, New York 10007-2146 ‘Telephone: (212) 788-6900 »Fax: (212) 766-6300 Mark Page Director MEMO TO: Agency Heads FROM: Mark Page SUBJECT: Fiscal Year 2011 Executive Budget DATE, March 23, 2010 Shortly before publication of the City's Preliminary Budget, the State of New York published its Executive Budget, which proposed major cuts in aid to localities in the state, including New York City, as part of its proposed plan to balance the State’s financial operations through March 31, 2011 With the City's Preliminary Budget we published a contingency plan for the City in an effort, at very short notice, to give a sense of the impact on the City of the proposed cut in State aid allocated to us. The total cut was approximately $1.3 billion; if taken as personnel savings the impact on the City workforce was approximately 19,000 fewer positions. Since January, the State has lowered its own revenue forecast by another $850 million, although there is a prospect for additional funding from the Federal Government. There is no way to accurately predict what portion of the $1.3 billion in January's proposed cuts in State aid to the City, or what other subsequent cuts, we will be obliged to accommodate when presenting the Executive Budget this spring, or for that matter in June when the City will be obliged to adopt a balanced budget for the fiscal year beginning July 1, 2010. In order to be able to formulate City budget proposals which will best preserve necessary City services and the quality of life vital to us in whatever circumstances apply later this spring and again in June, | am asking City agencies to again focus on their operations in Fiscal Year 2011 to determine how best, to the extent necessary, we can achieve balanced City operations. | believe that the worst case is the $1.3 billion reduction reflected in the January contingency plan, and therefore the full target asked of agencies would fund this amount. However, | am hopeful that in the end we will do better than that. Therefore, | am asking that each agency address the full target, but also to be as clear as possible in their priorities. If our need to reduce expenditures is less than the full target, we must have a clear idea of the relative value placed on different proposed cuts by each agencyThe target savings Citywide for FY2011 is approximately $1.3 billion and breaks down as follows: 3.6% for uniformed forces, 7.2% for all other agencies, 2.7% for the Department of Education which will preserve the City's State mandated maintenance of local funding effort. The detailed reductions required by this letter will give us the necessary agency information for determining final resource allocations with the Mayor for the Executive Budget for FY2011 and possible further City budget iterations. As a general guideline, you must submit proposals that meet the total amount of your target. The target can be met by reductions in personal service costs or other than personal service costs and/or assured, recurring revenue actions. In cases where you are submitting reductions to personal service costs, you should include the value of any fringe benefit savings that will be achieved as a result of these reductions. Instructions as to how to calculate the fringe benefit savings are attached. The programs and areas to be cut and the resulting level of services that will be provided should be indicated in the descriptions of your proposals. Your proposals should be prioritized in order of preferred implementation (One should reflect the top ranked proposal.). Any requests for additional funding must be self-funded within your agency's existing budget. ‘The proposed reductions you submit do not necessarily represent the final outcome of resource allocation for your agency. Your own priorities should be clear in the reductions you propose. If you believe lay-offs, or other extraordinary actions would be necessary to meet your target, these should be reflected in your submission. As always, OMB intends to work collaboratively with each of you to find recurring savings in your agencies. Please return your proposals to meet your agency's target to OMB no later than Wednesday, April 7, 2010. The City's financial management system (FMS) provides the capability to submit your proposals electronically rather than via paper forms. Instructions on the submission of your proposals are attached Thank you very much. Attachments cc: Mayor Michael R. Bloomberg First Deputy Mayor Patricia E. Harris Deputy Mayor Linda Gibbs Deputy Mayor Robert Lieber Deputy Mayor Carol A. Robles-Roman Deputy Mayor Kevin Sheekey Deputy Mayor Edward Skyler Deputy Mayor Dennis M. Walcott