Meet the Mayor: One-on-one with Jim O'Neal

Jim O'Neal takes over as mayor of the city of Springfield at what is perhaps one of the most crucial times in the city's recent history. O'Neal, owner of $65 million national truckload carrier O&S Trucking, sat down with Springfield Business Journal last week to discuss the role of local government in private business, the city's $200 million pension fund shortfall and major turnover on City Council.

How does your business background help you as mayor?

Every job I have had basically is in customer service, including starting a trucking company. The only product we have is service. I know about running a business and seeing it grow to the point where the budget is growing and becoming more complicated, and you've got more people involved and the decisions get bigger. (O&S' budget) is near $80 million. The city of Springfield, the number of employees, the total budget and financial responsibility, the geography, the vast array of interests and entities that exist in the community, are overwhelming. But all those experiences together prepared me to approach this job without getting overwhelmed.

Are you surprised by the work involved as mayor of a city with a population of 155,000?

I thought I knew what I was getting into. I know there will be tough days, and I know there will be times when I make a mistake or someone is unhappy with what I've done. But to be the mayor of a city this size - to stay on top of the multiple complex issues that come with that - is a pretty daunting task.

The city has a very good staff. Everyone I meet here really genuinely cares about the city of Springfield and knows what they're doing, particularly the people in middle and upper management.

What was your reaction to Ralph Manley's sudden resignation?

Disappointment. I wish it hadn't happened. He lost his wife about a year ago; that would be a very difficult thing for anybody, let alone someone who's been married for 58 years.

The way he left, obviously, was less than desirable, and the common thing I hear from citizens on both sides is that they wish it hadn't ended this way. But I think Mr. Manley's legacy will live on, and when you think of Ralph Manley now or 10 years from now, if you know him, you'll know what a good, kind, considerate person he is and the work he's done on behalf of the city and the community.

Ralph Manley is Mr. Springfield, and he always will be. What happened the other night is just incidental to that.

What role does city government play in private business?

Government doesn't always need to take the lead, but it needs to be engaged and lock arms with other entities in the community. ... It's economic development, with the city offering a helping hand and working to create a business-friendly environment. We work to create a quality of life that industries or potential workers are attracted to. That's why things like the new airport are important; that's why stability in government is important; that's why fiscal responsibility is important.

Economic development and the business-friendly environment is a core service that the city has to offer, just like public health and public safety.

If fostering business is a core service, is government regulation a bad thing?

Depends on who you ask. There's room for improvement, but you can't lose sight of the fact that we have rules and ordinances for a reason. Oftentimes, it's about adjusting the ordinance so that it makes more sense. Sometimes we're trying to deal with 21st century problems with 20th century rules. In business or in government, you need to make sure your business plan or organizational structure remains relevant to the job at hand.

The Police and Fire Pension Fund Task Force has been charged with both finding a solution to the current underfunding issue and preventing the liability from growing out of control. How important is that job?

The solution to this is complex and expensive, and if we ignore it, it will wreak financial havoc on the city. There's a philosophy in city management - a correct one, I feel - that if the actuaries say we must contribute $12.3 million to the pension out of the city budget this year, then we have to contribute $12.3 million.

The enormity of that is just being realized in the last two years - I think there were several years there where it was largely ignored and underfunded.

We have a little window of time here that we can use the wisdom of this task force to develop a solution based on all the options we have. But doing nothing is not an option - that's where the threat is.

What happens if the issue isn't addressed this year?

(In fiscal 2010), we face the second year in a row of cutting more than $5 million from the budget because of the increased requirements to fund the pension plan. This year's cuts are going to take us right to the level where we really notice a reduction in services; if we go another year, it will be brutal.

At some point you just can't cut people anymore. Public safety will be at risk - we have to close a fire station, we eliminate the community oriented policing program. We have to have something in place by this time next year - and it may take a few years to implement - where we change the pension fund for new hires significantly to get us back between the lines.

The city gets roughly a third of its general fund revenue from sales tax. Do you think the city depends too much on sales tax as a source of income?

I think the city has done a good job compared to places like, for example, Florida, where they've raised property tax to a point that they created such a burden on homeowners that now they're closing libraries. They're talking about 40 percent budget cuts in Orlando this year. Property taxes have gone down there because valuations are down, foreclosures are up, bankruptcies are up - the mortgage meltdown in Florida is real.

In our city, we have a disproportionate amount of sales tax revenue that comes from people who don't live in the city - anywhere from 30 percent to 50 percent comes from people outside the city limits. To me, that's a pretty good deal. Our current budget issue has a lot less to do with sales tax decline than it does with having to put $12 million a year in a pension fund.

With the state considering a "fair tax," which would eliminate individual and corporate income taxes in favor of increased sales tax, what impact would that have on the city?

It's hard to separate the information and disseminate it so the state and local sales taxes don't get inexorably confused. There's a lot of nuance of what's being proposed, but just the simple issue of it being a sales tax is a problem. If the city comes back and says it needs a quarter cent for a pension solution, and if people feel like they're being sales-taxed to death, no matter how good the cause, it will be hard to get something passed.

People have chosen over the years to use sales tax as the best way to control how money is spent. There are still people who say it's not spent as well as it could be, and that can be a valid criticism - and they have every right to levy that criticism. But I see sales tax as local revenue where local people decide on what will be funded. Sales taxes belong to cities and counties, if we use them wisely, and everyone else should get their hands off of them.