Valley budget cuts likely

The city of Spokane Valley’s budget has been a hot topic among city council members for months, but they had surprisingly little to say during a daylong budget retreat on Tuesday.

Each city department has already been asked to cut its 2010 expenditures by 3 percent. The city’s finance committee, which includes Mayor Tom Towey and Councilmen Gary Schimmels and Dean Grafos, then asked all department heads to prepare three budget options for 2011 that would cut an additional 3 percent, 6 percent and 9 percent. The council will then decide which option they would prefer.

Towey said that it may be necessary to add in some areas. “This budget meeting is not about cutting,” he said. “It’s about evaluating what we’re doing and how we’re doing it. This meeting is not a debate. It’s a discussion, an exchange of information.”

A budget forecast prepared in February showed a $13 million deficit in 2014 if no changes were made. A new forecast that takes the 2010 cuts and a 3 percent 2011 cut into consideration shows an $8.5 million surplus in 2014. That doesn’t include $3 million set aside to be used at the beginning of each calendar year before the property tax revenue comes in, said finance director Ken Thompson. “It’s just a cash flow thing to make sure we have enough money to pay the bills,” he said. If the $3 million is added back in, it puts the city well over the 15 percent minimum carryover it wants to maintain. The goal is also to leave the city’s $5.4 million contingency fund untouched.

Councilman Bill Gothmann said every extended budget forecast shows a downward trend in later years, but that allows the city to make changes far in advance. No forecasted budget number is firm. “I don’t think any of our crystal balls are that good,” he said.

The line-by-line budgets prepared by each department showed that some can meet the suggested budget cuts much more easily than others. One department already in trouble is the Finance Department. Thompson had planned to hire an accountant and accountant technician in January, but held off when the new council took control. “We’re just limping along with the people we have,” said Thompson.

Already the department is slow to pay contractors at times. “We’ll do the best we can to get the job done, but we may be running a bit behind,” he said.

Jackson said the council should consider allowing the hires, which are currently funded in the budget. “I think these are positions we should keep in mind,” he said. “They were well justified in adding those.”

If the Finance Department’s budget is cut as little as 3 percent, there will be “very little” review of sales tax returns from retailers. Thompson related a recent example where a major retailer was coding its sales tax incorrectly and sending it to the city of Spokane. If the problem is caught the city can get back what it should have been getting for the last six months. If the problem is caught late or never caught at all, the city will never see those sales tax dollars. “We just haven’t got anybody to track that down,” Thompson said.

Jackson suggested that if an accountant is hired, he or she could likely cover their salary with the sales tax money recovered.

The Community Development Department has also been having difficulties. The department has lost some employees but has been able to just get by, said community development director Kathy McClung. But if construction and business permits increase, there won’t be enough staff to handle it. As part of the 2010 budget cuts an administrative assistant was cut to half time. That has resulted in the website not being kept current and planning commission meeting minutes have been delayed. McClung asked the council to consider reinstating that position to full time. “We have fallen behind,” she said.

There is also little room for trimming in the Parks and Recreation Department, said director Mike Stone. Most of the money is spent on salaries, park maintenance and programs. “We’re going to get to a point where we’re eliminating programs and services,” he said.

Under the 3 percent cut plan Stone said he would have to cut the KinderCamp program and not plow park parking lots in the winter except for Valley Mission, CenterPoint and Sullivan Park. “If we have a lot of heavy snow, our parking lots would be inaccessible,” he said.

Public Works director Neil Kersten said he would have to cut the snow plowing budget. “We can probably get by as long as we don’t have a really heavy year,” he said.

The street maintenance program is already under funded. Spokane Valley spends $49 per capita on street maintenance while the city of Spokane spends $108 per capita “and you can see how good their streets are. I could easily spend additional three or four million on streets if I had it.”

Several departments included on their list of possible cuts positions that have been funded but not filled. Grafos suggested eliminating all those positions to save money. Staff can always ask for the positions later if they are needed, he said.

Gothmann said that the positions should be analyzed on a case-by-case basis. Some could easily be cut but eliminating others “would be shooting ourselves in the foot if we got rid of it,” he said. “I think it’s important though that we accomplish the mission.”

Spokane Valley Police Chief Rick Van Leuven discussed the work being done by his department, which has not increased in manpower other than a precinct commander added earlier this year. The calls for service increased from 54,000 in 2007 to 61,000 in 2009, making the officers on the street work harder. Already some 35 percent of solvable property crimes are not investigated because of a lack of personnel. Some cities set a standard of 750 to 800 calls per year per officer. “Last year we were at 1,435 (per officer),” he said.

He presented 3, 6 and 9 percent budget reduction plans, which the council chose not to discuss. The news started off bad at 3 percent and got worse. At a three percent cut response times would go up, calls per officer would go up to 1,550, traffic enforcement would go down and the school resource officers would be in jeopardy. At the 9 percent level his estimate said “a reduction of nearly 15 percent of the personnel would create a catastrophic impairment in the ability of SVPD to provide basic law enforcement services.”

Councilwoman Brenda Grasse said she noticed that all departments are showing an increase over 2009 budget numbers. “I see this pattern throughout,” she said. “We’re still significantly higher than 2009.”

Acting city manager Mike Jackson said the city’s budget traditionally goes up 7 percent a year and the 2011 cuts are being taken from that number, not from 2009 levels, because inflation has to be factored in. A 3 percent cut would make the city budget grow only 4 percent next year. “The reductions are based on future increases,” he said. “Not necessarily every line item is adjusted. Some individual items can go up.”

Higher percentage cuts would be more problematic, he said. “When you get up to 7 or 8 percent, you’re actually reducing what the 2010 budget was.”

Grafos suggested taking the 2009 budget numbers and adding 1.5 percent to get the 2011 budget numbers. “I think that would be more realistic,” he said.

Jackson advised against putting too much weight on the 2009 budget numbers. “We’re really not trying to look back at what was spent in 2009,” he said. “We’re trying to look ahead and balance our general fund.”

He also said that revenues could be higher than anticipated or other numbers may need to be adjusted. “It’s a snapshot in time,” he said of the budget forecast. “We’ll redo the whole thing next year.”

As the day drew to a close, Towey thanked the staff for their hard work. “I think we have a better appreciation of where we stand and where we’re going,” he said.