City to borrow from utility
Spokane city budget problems are forcing the city to borrow money from one of its utilities so that it can continue to pay salaries and other bills for tax-funded services such as police, parks and fire protection.
The City Council on Monday unanimously approved a short-term loan of up to $6 million from a solid waste reserve account to the general fund.
Chief Financial Officer Gavin Cooley said the money will be repaid by November after the city receives its second yearly installment of property tax revenue of about $14 million.
He said he needed authority to borrow up to $6 million to cover a shortage of tax revenue compared with expenses.
Cooley said he expected to actually use only about half that amount, but wanted a margin of safety for cash flow purposes. The general fund will pay interest at a 1 percent annual rate to the solid waste reserve.
Solid waste acquired the reserve as the result of an insurance settlement in 1992 that stemmed from pollution at the former North Side Landfill. The money has been held for development of a new operations center for the garbage utility.
The vote by the council came minutes after Mayor Jim West said Monday he still hasn’t settled on budget and staffing cuts that will be needed to trim 5 percent from the city’s $121 million general fund by Sept. 1.
West said he expects to submit budget revisions to the council in time for its Aug. 9 meeting and follow that with requests for emergency budget action by Aug. 16. The mayor said department heads are working this week to finalize cuts.
During Monday’s council meeting, the mayor’s staff handed out a priority ranking of more than 400 city services. The rankings were based on eight priorities, including safety, mobility, environment, human services, strong economy, health, government leadership, and growth and learning.
The public was asked in recent weeks to participate in ranking of priorities. Nearly 2,300 responses were received from residents who, as a group, scored safety and mobility as their top two priorities.
City departments submitted “bids” to provide services under those priorities, and now those bids have been ranked in order of importance. Utility departments also have participated in the effort, even though they are funded by rate charges and are not subject to cuts this year.
West said some city services will be lost while others may be combined. “Some people are going to have to give some things up,” he told the council.
“We are looking for real savings that will last into 2005,” he said.
The effort to prioritize city services came through the help of a St. Paul, Minn., consultant that has experience working with governments to trim budgets.