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City wonders what layoffs, cuts to make
By ERICA HALL
Federal Way is facing a budget crisis, and city officials are asking for public input on where to begin making cuts.
Earlier this month, city finance officials crunched the numbers and came to the disconcerting conclusion that the citys baseline expenditures exceed revenue, and will continue to do so into the future.
City manager David Moseley told the City Council Tuesday night the city might have to cut programs, services and jobs to plug a $2 million 2005-06 budget gap thats expected to continue if the city maintains the levels of services its providing today.
City officials are encouraging Federal Way residents to attend public meetings on the budget to help officials decide where the cuts should be made.
It doesnt happen in a vacuum, Mayor Dean McColgan said. Its really important for the public to be involved.
Officials blame anti-tax advocate Tim Eymans string of statewide tax-cutting initiatives for the hits to the citys budget, as well as continually poorly performing tax revenue.
Gambling tax is down $600,000 and Christmas sales tax revenue from 2003 was 4.5 percent lower than it was in 2002. Thats really a big surprise to me, because when I talked to retailers, they said they were having a good season, city finance director Iwen Wang said.
In addition, personnel costs grew faster than city officials anticipated, as medical insurance premiums increased, Wang said.
Medical benefits costs rose 22 percent in 2003 and theyre going up 28 percent this year, Wang said. City officials are expecting another 15 percent rise in 2005.
Theres a cumulative effect of revenue reduction to Federal Way weve had to manage and had to be able to manage over the past several years, Moseley said.
But, he said, conservative management is no longer enough.
We will not have the revenue to continue the levels of services we have now, he said. This is a long-term problem, not just a short-term problem. We need to address it to get back to a sustainable budget.
And the budget shortfall will be worse if voters pass Initiative 864, Eymans 25 percent property tax rollback initiative. That would take another $2 million out of the citys general fund annually.
This is a very difficult year, particularly if were facing a $4 million gap, Moseley said. Its probably the most significant budget gap since we incorporated as a city.
He said the city is going to the public for help and input in where to make the cuts.
We need all the good ideas we can get, he said.
City staff will be looking at all the citys revenue sources and expenditures in the coming months to find ways to consolidate some services and cut expenses. In addition, city economic development staff will continue exploring ways to build the citys economic base downtown.
The heads of the citys departments will submit department budgets this summer.
The city will have to make cuts somewhere, and while officials expect to find some efficiencies in city departments, most already are operating on thin budgets, officials said.
Most council members dont seem willing to lay off police officers, the court has a tight budget already, community and economic development needs staff to provide the permitting customer service and groundwork for economic development, and public works small portion of the general fund pays to keep streets maintained.
That leaves the parks department and human services funding, though Councilman Eric Faison said many in the community view human services as necessary to the health of the city.
Where do you cut? Faison said. Thats the kind of discussion well be having.
Making budget cuts to any department will mean layoffs because the departments are already so lean, he said.
Faison said the situation the city is facing is dire.
Even if we put fences around all the parks and play fields and stop programming, we might not be able to fill the hole, he said. If the Eyman initiative passes, we could lay off police officers and stop services, and we still might not be able to close the hole.
If (citizens are) ever going to be involved, nows the time to do it.
Wang said parks and human services are examples of where the city might make cuts, but she added they wont be the only ones under scrutiny.
As far as boosting revenue sources, officials will continue looking to boost development downtown and might look at using the utility tax to keep government going.
The council has historically used the utility tax for capital projects, but theres no state law that says it has to. Faison said city officials might consider cutting some capital projects to divert some of the utility tax revenue to the operating budget.
Still, none of the major projects would likely be put off this year. The first phase of the new $16 million city hall is almost finished, and cops and courts personnel expect to move in this summer. And the $20 million community center/senior center/swimming pool project is moving steadily through the design phases.
The bonds have already been issued, Wang said, and the community center project will cost the city less than operating the existing Klahanee Community/Senior Center and the Kenneth Jones Pool.
City officials agree itll be a tough budget planning year, and council members reiterated the need for public input.
Staff writer Erica Hall: 925-5565, firstname.lastname@example.org