"Hi, I'm No. 7," Terry Gray introduces himself. Like his dozen or so cohorts gathered this sweltering May 30 morning on Edgewater Drive in College Park, Gray's wearing a bright yellow T-shirt emblazoned with the website for the Orlando firefighters union, www.rescueofd.com. Gray and about 150 of his colleagues spent the last two hours or so walking in Mayor Buddy Dyer's neighborhood, passing out thick-stock flyers protesting Dyer's plan to cut 12 percent of the Orlando Fire Department's budget, including 46 firefighters, the hazardous materials unit and eight rescue trucks (the vehicles that take you to the hospital when the ambulances can't get there in time).

Gray joined the department April 28 after a 21-year stint in Tampa. He's No. 7 in terms of seniority and consequently, he's on the city's chopping block alongside guys two decades his junior. "I feel for these young guys," he says. "Some of them, this is their first department. I saw their faces in that meeting …." His voice trails off.

That meeting happened May 13. At 6:30 a.m., the department abruptly summoned the 46 firefighters to a training facility on Primrose Avenue, where they were told that unless the city's perilous budget situation changed, they would be let go come October. (Another 24 positions would remain vacant.) They were given a form letter that spelled out the city's intent: "These projected deletions are based on the assumption that the city and the unions are not able to successfully negotiate modifications to current salary and benefit increases in the collective bargaining agreements."

There was nothing subtle about Dyer's move. "That's not even a warning shot," says Steve Clelland, president of the Orlando Professional Firefighters, IAFF Local 1365. "They put one right in the side of the boat."

The city didn't bother disguising its effort to bully the city's three unions — police, fire and SEIU, which represents more than 1,000 city workers — into scrapping contracts that had gone into effect a few months earlier. As city CFO Rebecca Sutton wrote to Clelland and police union chairman Sam Hoffman May 12, "We remain hopeful that our employees and their representatives will participate in reducing costs, allowing some of these positions to remain."

"It's kind of like in the movies when two cops are split up in a house and all of a sudden the bad guy comes in and has a gun to your head and says, ‘Give me your gun or I'll kill him,'" Clelland says. "I mean, that's what they're doing."

The city is demanding $4.3 million in concessions from the firefighters. Spread out across the union's 446 firefighters, that's about a 14 percent pay cut, Clelland says. The city is also slashing police overtime and laying off 52 civilian employees and 15 street cops, another attempt to force the cops back to the negotiating table, Hoffman says.

Of course, as the mayor has repeatedly noted, these are tough times. Patching a $43 million hole in a $345 million budget isn't easy. Some of the city's planned cuts seem long overdue: OPD's $41,000 horse groomer, the city's $83,000 puppetry program and the $300,000-per-year Downtown Ambassador program come to mind.

But the situation isn't necessarily as dire as the city contends. Records show that the city has nearly $105 million in its operating funds reserve, money set aside to save the city from economic calamity.

"A rainy day fund is supposed to be set up for a rainy day," says commissioner Phil Diamond, who adds that neither he nor other city commissioners have been very involved in the budget process so far. "These look like rainy days."

But the city's not using it. The unions allege the city needs that money to prop up its bond rating so that it can borrow enough money to finish Dyer's $1.8 billion venues package. Sutton flatly denies that charge: "This has nothing to do with the venues," she says.

Instead, Sutton says that budget policies and formulae prevent the city from tapping its $105 million reserve — or any of its $390 million in assets — to keep cops and firefighters on the street.

"Every time we've presented the reserves" as an option in budget meetings, "they don't make any bones about it," Clelland says. "They just think it's prudent business."

Broken promise

On July 19, 2004, Dyer made a pledge: "I can promise this council that at no time during the course of our administration here at City Hall will we waver in our commitment to our public safety budgets, our police force and our firefighters, nor will I ask you to cut these budgets in an effort to balance our city's budget."

That statement, it seems, no longer applies. In his February state of the city speech, Dyer announced that he would balance this year's budget without raising property taxes, as the city did last year to plug its deficit. Instead, he asked department heads to cut 12 percent from their respective budgets. The cuts apply across the board, whether your department irrigates medians or rushes people to the hospital.

The proposal, announced in May, would eliminate 342 positions citywide and lay off as many as 222 employees. Of those, more than half — 131 — would come from either the police or fire departments. And even with those cuts, the city found only $30 million of the $43 million it needed. More layoffs were possible.

The city spun the public safety cuts as "tak`ing` care of redundancies that we have," as chief administrative officer Bryon Brooks put it. Dyer blamed Amendment 1, the tax-cutting constitutional amendment Florida voters passed that gutted city and county budgets statewide. He also promised that "Orlando will not be less safe."

If it's true that these departments can weather such cuts unscathed, that would to suggest they've carried wasteful budgets for years. Otherwise, it's incongruous to say that eliminating 70 firefighter positions won't slow response times, or that taking 43 officers off the street — including both laid-off cops and vacant positions that won't be filled — won't have an impact on crime.

In looking at the proposed cuts, both notions — that there is bloat and that this city will become less safe — appear to have some foundation.

It's also clear the mayor's office is using the threat of layoffs to force the unions back to the bargaining table, though the economy was just as dire late last year when the city inked the agreements.

In March, Orlando police chief Val Demings issued her first budget reduction proposal: The department would eliminate overtime, fire 54 civilian employees (some of whom were losing their jobs anyway as the department streamlines the way officers create incident reports), ditch the School Resource Officer program, not hire 25 new cops, shut down two substations and eliminate the mounted patrols and city commissioner liaisons.

That proposal would have shaved nearly $13 million off OPD's $92.5 million budget, and didn't require the city to lay off any cops. The police union's March 30 counterproposal cut $11.2 million along similar lines, but added the ideas of charging cops a fee for taking home their vehicles, scaling back the number of deputy chiefs and eliminating the civilian internal affairs manager position. Here again, no cops would be taken off the street.

But in the final proposal, released May 13, that wasn't so. The mounted patrol was made part-time rather than eliminated, but the department still plans to terminate 52 civilians, delay the hiring of 25 new cops, lay off the three cops and one sergeant who comprise OPD's mounted patrol and, unless new grant funding comes in, lay off 15 street cops. In total, 96 positions would go, and OPD would save $10.1 million — an 11 percent cut, which is less than Dyer demanded, so more cuts are likely forthcoming.

Hoffman believes the city tacked on those 15 potential layoffs to draw them into renegotiating the union contract that its members had approved in October 2008. "Up until this point we didn't have a problem" with the cuts, he says. "It's a gun to your head. This is a contract that's not even cool yet."

OPD spokeswoman Sgt. Barb Jones says that none of the proposed cuts are final, and the department won't know its ultimate configuration until October. Asked whether or not the proposed cuts would have a tangible, deleterious effect on public safety, she demurs: "We work every day and use the resources we have to fight crime," she replies in an e-mail. "Our core mission, fighting crime, will never change, regardless of budget cuts and how they affect us."

With the firefighters, there isn't much civilian fat to cut. The city ordered fire chief Jim Reynolds to trim $7.5 million. By cutting overtime, eliminating 24 vacant positions and cobbling together other savings, Reynolds came up with $3.2 million (later, he upped that to $3.5 million). The firefighters were on the hook for the rest, just over $4 million — exactly the cost of the 46 proposed layoffs.

If those cuts go through, the firefighters' union says the impact will be immediate. Eight rescue units, which back up the private ambulance service with which the city contracts, would go offline. Those units transport some 500 critical patients a year to area emergency rooms, Clelland says. The department's hazardous materials truck will go out of service, and the department's heavy rescue unit — a specialized crew that deals with major things like building collapses — would be understaffed. Tower Six, one of the city's ladder trucks, will disappear, as will Station 16, a relatively inactive station built ahead of the burgeoning Lake Nona area.

"What they're asking firefighters to do, understand, if we don't give $4.3 million of our pay they will close these services," Clelland says. "So they're asking the firemen to solely fund, 100 percent fund, these rescue trucks so that people can live."

Rain forever

There is posturing at work here. The cops and firefighters want you to believe that these cuts would turn Orlando into, in the words of one crudely Photoshopped flyer lying around the firefighters' union hall, "The City Brutal-Ful." The cuts aren't negligible — even city CFO Sutton admits the cuts will hinder the department's level of service — but they might not leave the city in quite the state of despair that the unions will claim when they gather for a rally June 15 in front of City Hall. The truth likely falls in the middle.

But it seems odd that Dyer would pick a fight with the cops and firefighters were it not completely necessary. With the city sitting on a $105 million reserve kitty — money that has been used before to shore up budgets — that necessity is questionable. For about $10 million of its reserve fund, the city could keep all of its cops and firefighters, fill the vacant positions and still have $95 million in the bank.

According to the unions, that $105 million in operations reserves is more than city policy calls for. The city's fiscal year 2008 Comprehensive Annual Financial Report sets a guideline that its reserves should stay within 15 percent to 25 percent of the overall budget. That means the city's reserve for a $367 million general fund budget — which the city had last year — should be somewhere between $55 million and $92 million. This fiscal year, the city anticipates taking in about $345 million, which means the general fund reserve should fall between $51 million and $86 million. In other words, by the unions' accounting the city has nearly $20 million more in its reserve account than its own policy requires.

Police and fire unions say that's money the city could spend instead of laying off public safety employees. So why isn't it? In April, Sutton told WDBO 580-AM that such a thing is "fiscally irresponsible. There is an industry best practice not to do that, as you would then have to ‘solve the problem' every year."

The thing about rainy day funds, however, is that it's not supposed to rain forever. Once the economy rights itself, you no longer have to dip into that well. And, Clelland says, if you're not going to use reserve funds during the Great Recession, what's the point of having them at all?

"If you're not going to use them to save your ass," he says, "give them back to the taxpayer."

Numbers game

Sutton says it's not that simple: The city may in fact have $105 million in the bank, but that doesn't mean she can spend it. In fact, she says that only about $5.5 million of that can go toward fixing the deficit — and it will. And since the city's planned budget cuts still leave $13 million in red ink, that $5.5 million is already spoken for.

Understanding her arithmetic requires an understanding of the byzantine way governments take in, account for and ultimately spend your money. Tax dollars that come from specific sources go to specific funds, and in many cases are barred by ordinance or policy from being moved about, so even though the city has $105 million in its operations reserve, most of it is already committed elsewhere by city policy. For instance, city policy mandates that about $34 million of that go toward paying off general fund debt the city acquired building fire stations, police training facilities and other such things. The city has already spent $9.7 million from this pot to patch up this year's budget deficit, and almost all of the rest — all but $5.5 million — has to stay in the reserve, per city guidelines.

Another budget formula bars the city from spending more than 3 percent of its general fund budget — about $11 million — from its reserve for "budgetary events." In Sutton's view, the city simply can't get any more blood from the stone.

"We will use every available painless option to close the rest of the gap," she says. But she doesn't want to rely on reserve money when the economy is in for a long slog.

The city has other pots of money. For instance, it has $38.5 million in liquid assets in its fleet management fund, which pays for new city vehicles. It has $8.5 million in its risk management fund. It has $11 million in its parking fund and $4 million in its venues fund (which covers the existing arena and Bob Carr Performing Arts Centre). Sutton says that policies prevent the city from using any of that money to fix this year's credit crisis. But as Clelland points out, policies can be changed.

"It's a numbers game," he says. "It's a game they're playing."


Among union officials, there's some doubt Dyer will make good on his layoffs threat. The police union, in particular, has accused Dyer of manipulating budget projections before. "We think that's his game," Hoffman says. "Declare it's an emergency situation … and then save the day."

"What happens when we get to September?" he continues. "Are they going to lay off cops? I don't know. We don't believe crime is going backwards."

But if these cuts happen, he says, the city's police force will be only a little bigger than it was when Dyer took office in 2003.

Though the city vociferously denies that it's a factor, there's one elephant in the room: the city's billion-dollar-plus triumvirate of public works projects — the new arena, a new performing arts center and a refurbished Citrus Bowl — that city and county officials pushed through in 2007, without a referendum, when the economic forecast looked substantially stronger.

The downturn has hit the venues hard. Plans for the Citrus Bowl are on hold, perhaps indefinitely. The performing arts center has been delayed as the city scrambles to find new funding. The arena is under construction and on schedule, but the tourist taxes the city is relying on to pay off that debt have fallen off a cliff.

Because of that, the city's national bond rating was downgraded in May. Though the city has already received its cash from the arena bonds, and although its interest rates are locked, investors are worried about the city's ability to meet its obligations. But the city still values a good bond rating; indeed, it needs one to eventually sell the bonds that would pay for the Dr. P. Phillips Orlando Performing Arts Center. According to University of Central Florida economist Sean Snaith, one of the many factors that go into municipal bond ratings is cash on hand.

Though the city has shuffled money from the reserves toward the venues before — as it did when it transferred $10 million from its risk management fund to a venues insurance fund last year — Sutton says the reserves cannot have anything to do with the venues.

"It doesn't help us with the venues, because we've created a Chinese wall with the venues and all these funds," Sutton says. The cash in the operations reserve helps with the general fund debt the city has acquired, but "it's not correct to assume I'm saving that for the venues," Sutton continues. "It's not related."

Union leaders don't buy it. All of the major cash flows upon which the venues deal is based — tourist taxes, downtown property taxes and the eventual sale of the Centroplex — are hurting. The city's financing plan calls for selling the Centroplex for $90 million; today, it's doubtful that parcel could fetch anything approaching that price.

In short, a little extra cash might come in handy. Fairly or not, the juxtaposition of the venues and the layoffs gives the unions a strong public relations hand to play — that public safety is being sacrificed at the altar of Dyer's venues dreams.

There's nonetheless a policy debate to be had — and certainly, as the budget process plays out over the summer, we'll have it: Orlando is, as Forbes recently noted, a dangerous city. There's no way around the fact that eliminating 70 firefighting positions will hurt the fire department.

So is this the best time to slash public safety budgets? Are the city's reserve funds that sacrosanct?

Policy is about priorities. If the venues taught us anything, it's that when the Dyer wants something, he moves heaven and earth to get it. Consequently, despite the economic free-fall, the Orlando Magic's new $450 million arena is going up just fine.

But when it comes to the budget, the city enacts restrictive policies and then says its hands are tied. That's a choice: The money's there, but the city chooses not to spend it.

Maybe that choice is prudent. But the unions have a legitimate case to make. In Clelland's words, it's this: "How do you have $105 million in the bank that can't be used for emergencies?"

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