The Spokane City Council adopted a nearly $1 billion 2021 budget on Monday night that avoids steep cuts despite the economic turmoil brought on by the coronavirus.
Although the city expects weaker revenues as the economy recovers next year, the spending plan does not call for any layoffs of city employees and still includes several notable investments, including a commitment to fund a new regional homeless shelter.
The budget decreased to about $984 million, an approximately 11% decline from 2020 due mostly to the completion of the massive combined sewer overflow project that wrapped up this year. Spending of the general fund, which encompasses basic city services like the firefighters and permitting, was nearly flat at $207 million.
City staff anticipated general fund revenues falling by about $3.2 million from 2020 to 2021, largely because of a decrease in sales tax revenues due to the pandemic. The budget relies on a 1% increase in property taxes and a 2.9% increase in utility rates.
The 2021 budget was Mayor Nadine Woodward’s first opportunity to translate campaign promises into city spending, but her flexibility – and that of the City Council – was limited by the coronavirus pandemic and subsequent economic fallout after a run of growth in recent years.
The budget is the byproduct of months of negotiations between the City Council’s three-member budget committee and Woodward’s administration. More than 50 amendments were finalized on Sunday and made by council members before the final vote on Monday.
“We’ve never had, in the last eight years, this kind of collaborative process before. It’s really a testament to everyone involved,” said Council President Breean Beggs. “We found a lot of savings and innovative programming that we accomplished because we worked together.”
Woodward’s budget proposal, introduced in November, was an effort to maintain core city services, like the city’s libraries, without having to implement severe cost-cutting measures or drain city reserves.
“Throughout the process, I have prioritized public safety, housing, homelessness and economic development, while effectively managing the financial impacts resulting from the COVID-19 pandemic,” Woodward said in a statement on Monday. “This budget will achieve those goals and more.”
Councilwoman Candace Mumm, who chairs the council’s Finance Committee, said the council and administration “looked hard at savings” to avoid going deeper into reserves or taking on more debt. She noted the council could make changes to the budget next year as revenues become more clear.
Beggs expressed cautious optimism for next year.
“I think we’re in really good shape comparatively to other organizations. But if you look ahead, if we have flat revenues or reductions (in 2021) we’re going to have a really big hole in 2022,” Beggs said.
Although spending had to be kept in check, Woodward and the council agreed on funding for several key priorities.
The budget includes $500,000 for funding for a new, regionally-funded “bridge” housing shelter, which will help people experiencing homelessness transition to permanent housing on a referral basis. It also carves out $1.1 million for the construction of the regional Mental Health Crisis Stabilization Facility, with $300,000 for the facility’s annual operating costs when it opens in 2021.
The spending plan also includes $350,000 for continued funding of the police department’s behavioral health unit, which pairs police officers with mental health professionals, and $190,000 to hire three code enforcement officers to address illegal camping.
The city will also fund three new fire dispatchers, who will allow the city to fully staff its own fire dispatch services and rely less frequently on an outside agency, Spokane Regional Emergency Communications, for assistance when it’s short on personnel.
The sharpest difference reconciled between Woodward and the council was the administration’s proposal to refinance loans taken out for public safety capital purchases. Woodward’s budget called for a refinancing that would have saved $4.5 million in 2021 but lengthened debt repayments.
The council was hesitant to abandon a plan crafted under former Mayor David Condon to be debt free by 2025 and be able to self-finance future public safety capital expenses, Beggs said.
“That would blow up all those years of good work,” Beggs said, although he added it could be necessary if the economy remains bleak in 2021.
The council’s final budget also used about $500,000 less from the city’s reserves than the $1.7 million the mayor’s proposal called for.
The mayor’s budget proposal did not specify funding for night-by-night homeless shelter. But the administration has outlined a plan, cobbling together state and federal aid, to fund enough shelter for the current need, Beggs said.
”If for some reason we did a point-in-time count and we have another 80 people that need shelter, that would be a problem,” Beggs said.
Council Members Betsy Wilkerson and Michael Cathcart, the two newest members of the council, critiqued the negotiation process for not adequately including input from members who weren’t on the council’s budget committee. The committee members – Mumm, Beggs, and Councilwoman Lori Kinnear – struck a conciliatory tone and pledged to adjust the negotiation process next year if necessary.
”I don’t feel like that collaboration extended to all council members, and I think it’s more than just asking questions, there’s a very different level of input I felt like there was never an opportunity to provide,” Cathcart said.
Cathcart was the only member who voted against the budget.
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