Mostly Lint Lining City Purse Skimpy General Fund Reflects Revenue Shortfalls In All Areas

The city of Spokane’s general fund bank account hit a record low in mid-September when the checkbook balance dipped to just $2,900.

“That’s pretty tight,” said Pete Fortin, the city’s finance director.

Spokane’s budget blues are caused by sliding revenues to the general fund, which pays for things such as police, fire, planning and legal services.

Sales tax revenues deposited a few days later bumped the account to about $2.5 million. But with the city living paycheck to paycheck, that money won’t last long.

“Every other week we go through $2 million,” Fortin said. “We’re just kind of scraping along.”

Early projections said the city would take in $5 million less than needed to provide the same services next year as this year. That figure has since swelled to $6.5 million.

Revenues are down - way down. And that’s a trend not expected to turn around soon.

“This is one of the worst years in the 20 years I’ve been here,” Fortin said.

Nearly every area that fuels the general fund is seeing a decline.

Sales tax receipts are down. Construction is flat. Real estate sales are slacking.

Couple that with higher jail bills - more crime compounded by new laws mandating much longer sentences.

Pile on top problems with property tax assessments and costly state and federal clean-air mandates.

All told, it’s like trying to shoehorn a size 10 budget into a size 6 bank account. The situation makes for a tight fit.

The city began 1995 with a $5.4 million reserve - more than 5 percent of its $99 million general fund budget.

Slower than expected retail sales meant the city had to eat into its reserve, leaving just $1.8 million going into 1996.

If it hadn’t been for mid-year budget cuts, that number would have plummeted to $700,000, said Ken Stone, the city’s budget director.

“Mid-year cuts have saved us money,” Stone said. “But that’s still $3.6 million we won’t have in 1996.”

So far, the city has permanently erased nine jobs left vacant since the first of the year. The council could decide to wipe away 2.5 more jobs Monday.

Twenty-five people have opted for the city’s new voluntary severance program, where employees with more than a year’s service can quit in return for paid vacation time.

To qualify for the program, employees must show that their job could be shared by other employees or eliminated. So far, only two employees’ applications have been accepted, Stone said.

Just to meet payroll this month, the city may need to borrow as much as $2.5 million from the Solid Waste Department’s reserves - a move approved by the council last month.

The city always struggles through September and October because it doesn’t get its share of property taxes until November, Fortin said.

This year, the cash-flow crunch is the worst ever, Fortin said, adding that he doesn’t expect to use the entire $2.5 million credit line. The city hasn’t borrowed money to pay its employees in at least 10 years.

Travel also has been trimmed, said City Manager Roger Crum. Normally, the city sends two people to the national city managers’ conference, he said. “This year, we sent just one.”

Crum added that travel budgets were slashed a couple years ago.

“Travel is such a small percentage of the budget,” he said. “We’re looking for actual dollars - anything we can find.

“Just cut money.”

Department heads have been asked to make a list of cuts totaling 10 percent of their budgets, prioritizing them from most probable to the least possible cuts, Fortin said.

Most departments would have trouble swallowing a 10 percent cut, Fortin said. But he added, “We have to look at it.”

Beginning this month, the council will have a series of workshops to discuss cuts proposed by the city’s budget gurus.

Those proposals include trimming certain areas even further - in some cases by as much as 33 percent. Those areas include cellular phones, temporary seasonal workers, new computer software, education and consultants.

No matter what happens, the budget must be balanced by year’s end.

“It’s required by state law,” said Mayor Jack Geraghty. “That’s what we’ll do.”

, DataTimes ILLUSTRATION: Graphic: The city’s budget shortfall