Tight city budget for 2011

November 5, 2010

By Tim Pfarr

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City Manager Rob Wyman released the 2011 preliminary budget at the Oct. 19 City Council meeting. The budget called for widespread cuts, including ending maintenance in all city parks except Lake Boren and Donegal next year.

The budget also calls for the city to begin distributing passports, increase funds for community events and restore funds for affordable housing to about half of what the city historically contributed each year.

The council will hold final public hearings regarding the 2011 budget at its Nov. 16 meeting, and will approve the budget at its Dec. 7 meeting. The council has yet to make amendments to the budget; it will likely do so Nov. 16.

Cutting parks maintenance?

In accordance with budgeting policies passed in April, the operating budget — which covers daily costs — does not contain a deficit, nor does it assume an increase in taxes or call for use of the city’s leftover funds from the previous year. It also assumed the least favorable outcome for the city from ballot measures in the recent election, from a revenue standpoint.

Revenue is forecasted to decrease by more than $500,000 next year.

“We’re taking a worst case scenario approach, and that’s the most likely outcome,” Wyman said.

Cutting parks maintenance would save about $60,000 a year. Neighborhoods would be required to water and mow the grass in their parks, and remove trash. The city would still inspect playground equipment and assume liability in the parks, unless liability is otherwise negotiated.

If the cuts are adopted by the council, the city would arrange meetings with neighborhood groups and homeowners associations at the beginning of next year to figure out a plan for maintaining the parks.

“Our plan is not to walk away from all the parks and say, ‘Good luck,’” Wyman said.

However, members of the council spoke against cutting the parks, and Councilman Bill Erxleben said he would be surprised if the cuts to parks maintenance were to be included in the adopted budget.

Councilwoman Carol Simpson said the cuts to parks maintenance could diminish the city’s image.

“From what I’ve read, when people come to the city, they judge the quality of the city by the parks,” she said.

Other notable changes

If the city begins issuing passports, city officials estimated the city would distribute about 800 passports per year, which would bring in about $32,000.

Many other cities offer the same service, such as Lake Forest Park, which issues about 3,800 passports each year.

“A lot of people just whiz in there and get their application,” Director of Finance Christine Olson said about Lake Forest Park. “We think that we are centrally located, easy to get to and it could be a nice revenue generator for us.”

The preliminary budget also calls for funding for A Regional Coalition for Affordable Housing to be partially restored. Historically, the city contributed upwards of $50,000 per year to an ARCH trust fund, until it cut its contribution to $3,000 this year. The budget calls for a $26,000 contribution next year.

Public safety costs are also on the rise, as police costs will rise 3.1 percent. For now, Wyman said he doesn’t expect the city’s fire contract with Bellevue to increase next year, as Bellevue plans to negotiate with its contract cities before charging an increase. However, he said Bellevue could charge a large increase in 2012 to account for a lack of increase in 2011.

Furthermore, city employees will not receive cost of living increases, and they will suffer cuts to health care coverage. The maximum amount an employee can receive for good performance will also drop.

An open position in the finance department will not be filled, but the open public works position will, ideally by the beginning of next year, Wyman said. Director of Community Development Steve Roberge has served as interim public works director since Maiya Andrews resigned in February.

Nevertheless, furloughs — unpaid days off — will be eliminated next year, by recommendation of the Salary and Benefits Committee. The city scheduled five furlough days near federal holidays this year.

Wyman’s ideas

Although the budget called for the aforementioned changes, the council directed Wyman to return with other ideas, which he did at the Nov. 2 meeting.

His alternatives included cutting surface water fees for property owners and replacing those fees with an increase in property tax next year, which would essentially move money from the capital budget to the operating budget. This would allow the city for next year only to use the money for day-to-day expenses instead of for construction projects or studies.

The change would actually result in a slight decrease in taxation to most households for next year.

The city is allowed to increase property taxes by 1 percent each year, although it has foregone increases for several years. However, the city is entitled to take such an increase at a later date, taking several years worth of increases at once.

The taxation change would temporarily slash surface water fees by $50 per household and simultaneously take previous years’ property tax hikes this year, which would take $150,000 from the surface water fund and add $141,000 to the operating budget.

This change would allow the city to continue funding parks maintenance, conduct an analysis of other options the city has for police and fire services, allow for more cushion in attorney expenses, budget for employee sick leave and vacation payouts for when employees leave the city, and add in some cushion in other areas.

Taking the funds from the surface water fund would not have a drastic effect, Wyman said, and it may merely result in a small surface water improvement project — such as a drainage project — being pushed back to another year.

After 2011, the city could return the fees and property tax increases to normal, or it could continue to cut surface water fees and add a different tax, such as a utility tax.

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