Budget boasts don’t reflect spending

Claim: Several candidates for Spokane Valley City Council have stated repeatedly that the council that’s been dominated by the Positive Change slate of candidates has reduced budget growth of 7 percent per year to 1 percent or less.

Councilman Dean Grafos has made that claim in nearly every one of his re-election campaign ads.

Here’s our analysis of the claims.

Truthfulness: True, but doesn’t reflect actual spending. The city’s annual budget did go up every year, sometimes by more than 7 percent, but the amount the city spent every year has remained stable since 2006.

In 2006 the city spent $32.2 million in general fund money. In 2010 the city spent $33.1 million. The increase is 2.6 percent for the five-year span, said city Finance Director Mark Calhoun. “That’s a very good number,” he said.

Analysis: The average consumer price index increase has been 2.5 percent a year, Calhoun said.

Grafos said he is basing his statement on a five-year budget projection that was prepared in May 2009. “They were projecting a 7 percent increase per year,” he said. The 2009 projection showed projected increases of 7.7 percent from 2011 to 2012 and 8.3 percent from 2012 to 2013. Grafos acknowledges that there have been several projections prepared since then that show different numbers. “They’re all over the board,” he said.

There were some significant fluctuations during those years. The city’s expenditures dropped more than 10 percent in 2008 from 2007 levels. The sharp drop happened when the city stopped transferring millions of dollars per year out of its general fund to its reserve fund and capital projects fund, Calhoun said.

The city’s expenses jumped 11.89 percent in 2009 from 2008, largely because the city’s public safety budget rose to $20.5 million from $17.8 million. The public safety budget includes the city’s contracts for police, jail and court services.

But the large dip and large increase nearly canceled each other out, leading to the city’s small rise in money spent in 2010 when compared with 2006 spending levels.

Calhoun said every year the city spent several million dollars less than it received in revenue. The money was left in the general fund budget so it could be spent on emergencies and unexpected expenses.

That money accumulated steadily, growing from $8.7 million in 2006 to $27.4 million at the end of 2010. “If the fund balance is growing, it’s reasonable to see that 7 percent a year,” Calhoun said of the city’s increasing annual budgets.

As an example, the city spent $33.1 million in 2010 even though the general fund budget was $54.5 million, up nearly 10.7 percent from the year before. In 2009 the city spent $32.2 million and budgeted $49.3 million.