City Panel Cites $7 Million In Possible Budget Cutbacks

A commission investigating waste and mismanagement within Cambridge city government yesterday released a report detailing cuts of $7 million from the city budget that could be made "without impairing essential services or increasing the proportion of costs of city government borne by low-and moderate-income persons."

The report also suggests ways of increasing city revenues $5 million through improved collection of taxes and fines, but cautions that even if all its recommendations are adopted, the city will still be some $8 million short of the budget cuts mandated by Proposition 2 1/2.

"Our inquiry suggests that the City has a responsibility to operate with greater efficiency and to live more frugally, and this it can and must do," the 114-page report, prepared over the last six weeks, states. However, it calls upon the state legislature to "give this City and other cities and towns the proper resources and authority to serve their citizens well."

Many of the budget cuts outlined in the report are small--increases in fees for users of the city's public golf course, for example. But many are more significant. They include:

* A ten per cent reduction in school teachers, a figure chosen to match declines in the number of pupils;

* Asking tenants to pay the cost of the city's rent control administration;

* Combining many city departments in an effort to cut down clerical and administrative expenses;

* "Modest reductions" in police personnel; and

* Not filling ten positions currently vacant in the city's fire department.

"The committee used as its guiding principle that the shoe must pinch every service, but not cripple the delivery of those essential to the community," a spokesman for the commission, which was chaired by EASTCO president Alan Steinert Jr. said yesterday.

"The proposed figures are not precise to the dollar, but they represent goals that are reasonable and achievable by the department heads who have the managerial responsibility to reach them," the nine-member panel stated.

"Our specific recommendations to narrow the gap can, we believe, be carried out without undue hardship except to the unfortunate few city employees who are laid off," Steinert added.

The city council will consider the committee's recommendations in the coming months, along with the specific budgetary recommendations of the city manager. TABLE A SUMMARY: THE MAGNITUDE OF THE PROBLEM FOR FY 82 INCREASES IN COSTS AND LOSSES IN REVENUE 1.  Uncontrol table items   a.  Losses in Tax Revenue Du to Proposition 2 1/2  $14.70 million*   b.  Increased Assessments Charped to the City  $ 0.84 million   c.  Increased Pension Costs  $ 0.40 million   d.  Increased Unemployment Benefits  $ 0.23 million   e.  Changes in State Aid  $ --- million!   f.  Changes in Federal Aid  $ --- million! 2.  Nominally Controllable Items   a.  Wage and Salary Increases  $ 4.75 million**   b.  Increased Health Benefits  $ 1.30 million***   c.  Increased Energy Costs  $ 0.96 million!   d.  Increased Interest Costs (Net of Income and Outgo)  $ 0.20 million 3.  New Bonded Capital Outlay Items  $ --- million!!     TOTAL INCREASES    $23.88 million

DECREASES IN COSTS 4.  Non-Recurring Items   (Costs incurred in FY 81 not to be incurred in FY 82)  $ 3.90 million     TOTAL DECREASES    $ 3.90 million     TOTAL SHORTFALL    $19.98 million

* Assumes that the Fy 81 budget, which originally projected a balance of revenues and expenditures and assumed tno reduction in motor vehicle tax revenues, will show a $900,000 deficit because of the unexpected loss of such an amount due to Proposition 2 1/2.

** At current staff level's. Includes $2.75 million in wage and salary increases that have ben contracted for.

*** At current staff levels.

Assumes no change in amount of energy consumption with an average annual increase of 15% in prices.

DECREASES IN COSTS 4.  Non-Recurring Items   (Costs incurred in FY 81 not to be incurred in FY 82)  $ 3.90 million     TOTAL DECREASES    $ 3.90 million     TOTAL SHORTFALL    $19.98 million

* Assumes that the Fy 81 budget, which originally projected a balance of revenues and expenditures and assumed tno reduction in motor vehicle tax revenues, will show a $900,000 deficit because of the unexpected loss of such an amount due to Proposition 2 1/2.

** At current staff level's. Includes $2.75 million in wage and salary increases that have ben contracted for.

*** At current staff levels.

Assumes no change in amount of energy consumption with an average annual increase of 15% in prices.