As I travel through the community this summer, I'm continually reminded of Shaker's special qualities - the beauty and character of our homes, the walking trails including the new median strip on Shaker Boulevard, the parks and the much improved Horseshoe Lake Park, our Olympic swimming pool at Thornton, the neighborhoods, the schools  and most importantly - our residents including the great new young families I have met. Every time I go through the community, I feel enthused about Shaker's future. However, while these are the "best of times" in what I see in Shaker every day, they are also the "worst of times" for our national and regional economy.

The current economic crisis has created a serious revenue problem for governments throughout the country and in Shaker. Through May 31 of this year, our revenue was already down by approximately $1.7 million as compared to the same period last year. Further, we are falling behind revenue projections in our budget for what was already expected to be a difficult year.

In order to avoid putting the City in too deep a financial hole, I reported the following action at the June 22 Council meeting:

1. Furlough Days

There will be 13 furlough days for non-bargaining unit employees the second Friday in each pay period. City Hall, the Stephanie Tubbs Jones Community Building, Thornton Park administrative offices and the Service Center administrative offices will be closed on furlough days. Employees will not work that day and will receive a reduction of 10% of their pay for the balance of the year and I'll contribute an equivalent amount from my pay to share in the reduction. The Court, Fire, Police and Public Works operations will continue as normal.

2. Vacancies

Vacancies in several departments will not be filled.

3. Grass Bags on Tree Lawns

Effective August 1, the City is asking that residents place their grass clippings in brown bags and leave them on the tree lawns rather than in their back yards. This will save the cost of special runs to do pick-ups in the back yards. Residents will no longer be required to purchase Shaker brown bags and any brown bag can be used.

Contrary to information erroneously reported on Cleveland.com and other sources,  there will be no change in normal back-yard pick-up of trash.

4. Layoffs

There will be two lay-offs of clerical employees.

5. Pool Closing

The pool will continue in operation through Sunday, August 30 and will close Monday,August 31 for the rest of the season to save funds and also provide more time to install new drain covers now required under Federal law. I am attempting to make arrangements with a neighboring city for residents to use that city's pool during that time period.

All of the above will result in savings for 2009 which approximate $1 million. These changes should create only a minor inconvenience to residents and not impact the quality of life in the community. There may be some delay caused by the furloughs in some matters that are dealt with by city departments at City Hall or the Community Building and we appreciate your patience and understanding.

The adjustments noted above are part of a continuous process to reduce the cost of City operations. As noted in a recent report in the Plain Dealer, the Cleveland Metropolitan Area went into the recession much earlier than other parts of the country and is being impacted more deeply. Shaker Heights aggressively dealt with revenue limitations caused by the recession by significantly reducing the size of city government without impacting the quality of service to our residents. Through the elimination of 20 positions through lay-offs and job attrition, reductions in health care costs, frozen department budgets and wage freezes the City has achieved annualized savings of over $3 million. The further actions described above will provide an additional $600,000 in savings so that a total of approximately $3,600,000 will have been taken out of City operating costs. That is a reduction of just about 10% of all City operating expenses.

The City must, of course, absorb negotiated wage increases, increased health care costs, increased fuel costs, etc. which offset much of the above savings. Nevertheless, Shaker has managed to absorb these cost increases and still  reduce its total annual operating costs each year since 2007.

While Council and the Administration have been very aggressive about reducing expenditures, there has been a persistent revenue problem in this decade. In contrast to the 1990s when revenue growth was at a healthy 4-5% annual rate, growth commencing about 2002 has been an anemic 1.5% a year. This is insufficient to keep up with expenses and has resulted in an erosion of our operating reserve. The problem has become more acute in 2009 as revenue has gone from anemic growth to a real decline.

Shaker remains a first-class community with a high quality of life and an excellent financial rating from the municipal rating firms of AA+. City Council and the Administration are determined to maintain the quality of life in Shaker and our strong financial foundation because this is critical to our future and our ability to continue to attract and retain residents.

In the next 30 days, I shall be meeting with Council members and community leaders to discuss this revenue problem and what should be done about it and will report to the community thereafter.

[The message above was emailed on June 26 to subscribers to the Mayor's E-News Updates.]