Ted Simons: Phoenix manager, excuse me, Phoenix City Manager Frank Fairbanks will be retiring after 19 years of service as the city manager. The city faces another round of budget cuts. Here now is Phoenix City Manager Frank Fairbanks. Good to see you again. Thanks for joining us.
Frank Fairbanks: Good to be here.
Ted Simons: Let's talk about these budget cuts. I know earlier in the year you had biggest budget cuts and it's not over. Is it?
Frank Fairbanks: We cut about $270 million out of the general fund budget and that was about a 22% cut. And I think we were successful and, in fact, as of today, we still have a balanced budget. The problem is that as we look at the rest of this fiscal year, through July 1st, our revenues are still going down. And if they continue to go down the way they are now, we'll be about $80 million short by the end of this fiscal year.
Ted Simons: We are talking, what, 9, 10%?
Frank Fairbanks: That's about 7% of the general fund budget.
Ted Simons: But as far as projected sales tax money this year, that's a drop? Considerable drop?
Frank Fairbanks: We are seeing 13 and 14% declines over a year earlier. In some cases, a year earlier we're down 10% from the prior year. So in some cases over two years we're down as much as 23, 24%.
Ted Simons: OK. So how do you do it? How do you balance cutting budget, cutting all sorts of things without sacrificing the community?
Frank Fairbanks: And that's the challenge. I think last year we went out to the community and we asked the community's help and we tried to cut the things, the services we deliver that have the least impact on the community. Very tough. We are able to add some back to the community felt were wrong. And I think in the end, we're able to cut services that were important but not critical. This time around, we are doing just an enormous belt tightening. We are pinching every penny, turning off the lights, not driving the car. Copying on three sides of the same sheet of paper. And for now, we are hoping to save as much as we can. And, of course, if the economy will turn around, the problem could be solved. If we could see an economic turn around in the next three or four months, this deficit could dissolve.
Ted Simons: Early retirement, unpaid, the furlough situation as well. How much is that a factor in what you are trying to do?
Frank Fairbanks: Well, we have done, when we do layoffs, and we do cut backs, we have done early retirement. But early retirement is quite expensive. So we try to do that just in the context of layoffs. But we are working very closely with our unions and trying to find ways to cut our costs because the city is a service organization and almost everything we do is a service. And 70, 80% of our costs are to labor and benefits and costs related to the employees. If you think about the police department, the fire department, the parks department, these are people-intensive services. And you really need the people to deliver the service. We are looking every way we can to cut those costs. We are working hard with the unions and looking for ways like furlough that are voluntary furlough program that's been quite successful. We are looking for other ways to cut cost.
Ted Simons: You mention you really need the people. You really need morale for those people to be up as well. How do you address the morale of employees both before cuts and after?
Frank Fairbanks: I think that's been a very important part of what we do. And part of it is we try to involve employees at every stage of designing the cuts. We try to keep them informed so they know what's happened. The city is lucky because part of the City, the airport and the water department, are separate. They are enterprise departments. They are paid fully by their own revenues. No tax dollars go to them and they don't provide us any revenue. But the airport and the water utility have done OK. So they have been able to absorb some employees. We have actually had a situation in which we cut several hundred employees in the general fund. But we are able to put them to work in the water department, and the aviation department. Employees appreciate that. And we really do a good job of communicating so people know where they are, what to expect. I think morale is really quite high for as tough as the situation is but that's something we work at. We really value our employees because when you are in a business that's service Oriented, your employees right whole story. And they are good at it, too. It's crucial.
Ted Simons: Why are you retiring?
Frank Fairbanks: You know, I have done this for about 37 years. And it is exciting. The time comes for a change. And for a lot of reasons I think now is the time. We just have a great city manager's office now that's ready for the change. Actually, I thought about retiring five years ago. We had a great city manager's office then. I didn't retire and almost everybody in the office left and I had to train the new group. I think timing is right for me. And I want to leave while the organization is successful. And I think it's time for some new ideas and a fresh outlook.
Ted Simons: You have been obviously city manager in that position for 19, going on close to 20 years here. What has changed? The best things you have seen change about Phoenix and some of the things you worry about.
Frank Fairbanks: You know, I think a lot of good changes have happened. And the change that I point to that is most important for all of us is when I started with the city and as I became city manager, our focus was on growing as fast as we could. So how do you extend streets and roads and water lines? How do you get services out so they would grow and grow and grow. Over the period of time I've been the city manager and I don't deserve the credit. It really belongs to mayor and the council and the community. I think we have moved to a focus of making the city a better place to live. So that the focus has gone from quantity -- how can we grow as fast as possible -- to how can we make this a better place. We focus tremendously on some of the lower income and blight areas of the city. There's been huge improvements in south Phoenix, sunny slope. We are starting to make employee improvements on the west side. We still have a lot to do and there's a lot of improvements that are needed. But I think the direction is great. If you look at light rail, ASU downtown there's a lot going on in Phoenix. And I think there's some real excitement and energy and we are starting to have a big city downtown.
Ted Simons: What's the most important thing you could tell your successor?
Frank Fairbanks: One thing? Well, that's tough. I would really settle on two. First, the key to Phoenix's success is partnerships. Partnerships between the city and the community, the city and business, the city and labor. But also in the end, it's you have to have this relationship and you have to have motivated, caring, quality employees if you are going to make a difference in the community. So I would say partnerships with everyone you can find, and then taking care of employees, giving the quality work force and letting them know that they are important to the services the city delivers.
Ted Simons: Are you going to miss it?
Frank Fairbanks: I am. I love this place. I was born in Phoenix. I'll spend the rest of my life here. I love it.
Ted Simons: I was going to say you might be around in case people need some guidance, you might be there for them or are you going to be on a golf course?
Frank Fairbanks: Consulting it will be free consulting.
Ted Simons: Yeah. Real quickly got about a minute left, I know you were in the Peace Corps. Have you taken much of that experience into your professional life?
Frank Fairbanks: You know, I really ended up, my education has been in finance and management and business. When I was in the peace corps I ended up in a project in which the president of the country was focused on improving the quality of city government as a way to benefit his country. And I went to work in that and I saw firsthand how this local government gets better people have better lives, they're healthier, they're happier. So it shape might whole life, my whole career. If I hadn't been there I don't think I would have been in this business so to speak, I don't think I would have gone into government at all. And it's also taught me one of the things they stress in the peace corps is value other people whether you agree with them, whether they're the same with you or not, because they're people. They're valuable and respect their point of view.
Ted Simons: Very good. It's a pleasure having you on the program. Thank you so much.
Frank Fairbanks: Thank you.