West orders hiring freeze for city
As financial problems deepen for Spokane city government, the mayor is freezing new hiring while the City Council juggles accounts so the city can continue paying its bills.
The council Monday approved a $1.7 million budget transfer to cover extremely large medical costs for three retired police officers. The money was taken from sales tax receipts that normally are used to pay for general services, including police and fire officer salaries.
The medical costs were aggravated because at least one of the families involved had not signed up for Medicare benefits, which would have helped offset the city’s share of their care, officials said. The oversight was discovered after a new retirement director was hired.
Also Monday, the council made a short-term loan of $6 million from a solid-waste reserve account to the general tax fund to make sure there’s enough cash to cover city bills until property taxes are received this fall. The reserve must be repaid with interest under state law.
The solid-waste reserve came from an insurance settlement to the city stemming from the costly closure and Superfund cleanup at the North Side landfill in the early 1990s. The reserve has been held to help finance the garbage system’s portion of a proposed new city operations center in east Spokane.
Top city officials had hoped to begin work on the operations center next year, but there isn’t enough money in the general fund to pay for its share of the costs.
Mayor Jim West last week announced a hiring freeze in general fund departments. He also ordered his department heads not to pay extra – beyond normal salaries – to employees working outside their job classifications. Only the mayor or deputy mayor can approve any new hires or exceptions to the freeze, according to the order that became effective Monday.
The city’s $119 million general tax fund is facing a $6 million shortfall in 2006. It pays for police, fire, library, parks, street maintenance and other City Hall administrative services.
The problem in the general fund stems from a long trend of increasing salaries and health care costs against sluggish growth in tax receipts. Last year, the city slashed 75 police and fire jobs, cut library hours and trimmed the general fund work force by 125 jobs. But the city avoided closing a fire station.
Additional budget cuts next year likely would cause a fire station to be closed.
On Tuesday, a group of top officials and at least one union leader met to talk about the possibility of asking voters to increase a state limit on property tax collections, which would raise about $5 million a year for the next several years.
West is also trying to sell Joe Albi Stadium and unused city-owned property to cut operating costs and to raise money for a general fund reserve account.
Water, sewer and garbage service are not directly affected by the crisis because they operate on rate charges for those services. However, spending to comply with environmental requirements as well as escalating salary and benefit costs have forced utility rates upward after some years of relative stability.