Council approves tapping reserve

Spokane Mayor Jim West on Monday proposed dipping into the city’s $3.1 million reserve account to finance an early-retirement program intended to reduce budget-cutting layoffs next month.

The City Council voted 6-1 in favor of the plan that could save two entry-level firefighter jobs for each retirement of a senior firefighter because of differences in pay. Council member Bob Apple voted no because he considered provisions of the plan to be an illegal gift of city money.

The plan would provide a lump sum of $10,000 to $15,000 to each early retiree to pay for ongoing health care costs. It would also finance payments for unclaimed vacation and sick leave. About $1 million would be set aside from the city’s reserve to make the payments. Retirees would have to agree to forego unemployment compensation claims, which will be paid by the city to any laid-off employees. In return, the early retirees would receive full pension benefits, officials said.

Assistant City Attorney Mike Piccolo said the payments for health care are legal under state law.

The law requires the city to lay off personnel with the least seniority. They are staff members with the lowest salaries in their job classes. Retirees frequently are at the top of their salary ranges.

Chief Financial Officer Gavin Cooley described the early-retirement program as a humane way to reduce city staff in the face of a $10 million to $12 million budget shortfall for 2005. He said the mayor would decide which retirees would be accepted for the program, which could involve 25 to 35 retirements.

As many as 100 city employees could be laid off at the end of the year in services funded with general taxes, including police, fire, libraries, parks and streets, plus internal departments at City Hall. Increasing costs for salaries and health care, combined with slow growth in tax revenue, are at the heart of the problem in the $118 million general fund.

On Monday, nearly 70 people turned out at the East Central Community Center to testify about cuts in library services.

Meanwhile, firefighters are making plans to campaign for additional tax revenue so police and fire services can be maintained, said Lt. Greg Borg, president of firefighters Local 29.

In an interview, he said the city is going to have to ask voters for additional tax revenue either through lifting a state limit on the city’s regular property tax levy or through a maintenance and operations special property tax levy for public safety.

The City Council on Monday will hold a public hearing during its regular weekly meeting on a proposal to increase the regular property tax levy to the maximum allowed under state law without a public vote. The increase would raise about $1.5 million and cost the owner of a $100,000 home an additional $12 in property taxes next year. The money would be used to ease cuts in police, fire and library services.

West also has proposed a small increase in city admissions taxes and an increase in the overtime parking tickets from $10 to $15. In all, the higher taxes and tickets would raise less than $2 million.

Though some budget proposals have been discussed for several weeks, West has not released a detailed budget. He is expected to submit his spending plan to the council today.

The City Council is scheduling a series of public hearings on the budget, including next week’s hearing on the proposed property tax levy.

Hearings on the 2005 spending plan will begin Nov. 15 when the council turns its attention to funding for economic development, transportation and City Hall leadership.

On Nov. 22, a separate hearing will focus on public safety. On Nov. 29, the council will consider spending for health, environment, library services and human services.

All of the hearings will be held during the council’s 6 p.m. legislative sessions in Council Chambers at City Hall. The meetings are broadcast live on Cable Channel 5.

Borg said he expects a packed council chamber when the subject of potential cuts in fire and police services come up for discussion Nov. 22.

Final budget adoption is expected in mid-December.

Meanwhile, former council member Steve Eugster has filed an initiative that would roll back city utility taxes by as much as $10 million. Council members are expected to require Eugster to gather signatures to place the measure on the ballot, possibly next year. Eugster has argued that the city should collect a local business and occupation tax rather than levying a high tax rate on city-owned utilities. The tax is currently 17 percent of monthly bills.

City officials said Monday they plan to change all 30-minute parking meters downtown to 60- and 90-minute time periods. The change will involve 500 meters.