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Cuts and layoffs coming to city
By ERICA HALL
City officials can plug a $3 million annual budget gap this biennium, but they'll be faced with a similar situation in 2007 if they don't find longer-term solutions to the revenue problems plaguing Federal Way.
"This is not just a problem in 2005 and '06," city manager David Moseley told the City Council last week. "Revenue will not keep pace with inflation. This is a problem we'll be revisiting unless certain things happen."
Moseley gave a preliminary budget presentation to the council earlier this week with an overview of what the city is facing and some possible ways to address the deficit. City department heads will go into more detail at special meetings scheduled later this month. Capital budget plans will be discussed in each department's presentation.
Moseley attributed the budget gap to tax-cutting, statewide voter initiatives, a sluggish economy and the rising cost of employee benefits. "We can't sustain a $1 million benefits increase every five years," he said.
To stop the downward spiral, he emphasized the council's mission of expanding the economic base downtown.
This biennium, the city could balance the operating budget by eliminating 25.5 positions some through layoffs, others by attrition and slashing several programs, such as the Red, White and Blues Festival on Independence Day, the lifeguards at Steel Lake, the Community Emergency Response Team (CERT) program, and the flower baskets and banners downtown.
The council could lay off or eliminate positions for an assistant city manager, a code enforcement officer, a domestic violence victims' advocate, a senior traffic engineer, a financial analyst and all 14 police support officers to save money.
They could slash funding for travel and training, membership in municipal organizations, parks maintenance, professional city services and court security.
Everyone acknowledged it's going to be tough.
Councilman Jack Dovey recalled the budget process in 1996, when the city faced similar pressure, and encouraged his colleagues to make the tough decisions.
"Some of our decisions won't be fun. People will be affected," he said. "But we have to make decisions not only for the next two years, but for four years out and six years out to set the stage. Don't be afraid to cut something."
About a third of the city's operating budget is comprised of sales tax revenue, which has been down the past two years. Property taxes, licenses and permits, charges for services, fines, fees and other sources of funding make up the remainder of the budget.
While the full list of possible cuts would balance the budget, Moseley said they would be too deep. He suggested other revenue options that could help bring the budget into balance:
The city could use real estate excise tax money to pay the mortgage on the new City Hall, which would free up about $380,000 in the operating budget. That could restore the Municipal Court security contract and bring back five police support officers.
The council could raise business license fees by $25, which could bring in about $100,000. Raising the cost of business licenses would preserve the domestic violence advocate program and would provide for a transportation planner.
The council also could shift 1 percent of the utility tax, or $1.25 million, from the capital budget to the operating budget. City officials have a policy of directing utility tax revenue toward capital projects, but it's not a state requirement and several other cities use utility tax collections for their operating budgets.
Shifting the utility tax to operations could restore a host of services: All the police support officers assigned to patrol squads and one police support officer assigned to property and evidence, all street and park maintenance, human services funding, the code enforcement program, the CERT program, neighborhood traffic safety program and street lights on local roads.
The utility tax also would restore funding for revenue-generating recreational programs, volunteer coordination, Arts Commission programs, holiday lighting, flower baskets and banners, a financial analyst and employee recognition, wellness and education assistance.
For another source of revenue, the city could begin collecting the admissions tax next January, as planned when the council approved the tax in 2003. It could be used for the city's contribution to the Martin Luther King Jr. community celebration, the council planning retreat, the Korean community liaison and to restore two more police support officers, among others.
But Councilman Jim Ferrell indicated he isn't sure about collecting the admissions tax he doesn't want to burden local businesses with it or discourage customers and Councilman Mike Park noted the tax was approved to pay for two more police officers and two more school resource officers.
Patching together a budget from several revenue sources still leaves a $1.1 million budget gap that would have to be filled by laying off three full-time positions and a part-time position, Moseley said.
As the council began considering where to make the inevitable cuts, several people testified in support of the arts, parks, recreational opportunities for the developmentally disabled and human services. All agree it's going to be a tough process for the council, which must decide by Dec. 7 where to make the final cuts.
"I'm not happy as a citizen of Federal Way with cuts to the Police Department. I'm also not happy about balancing the budget on the backs of the poor," said Dini Duclos, executive director of Multi-Service Center, a social services agency. "But the budget has to be balanced. I'm not in favor of raising taxes, so look at the city manager's recommendations."
Mayor Dean McColgan reminded council members not to get so lost in the cuts that they lose site of revenue-generating expenditures and the city's overall goals for economic growth.
"With all the talk about cuts and reductions, we cannot lose track of the fact we need to build a vision for our future ... to protect our economic base," he said. "I don't want that to get lost."
Staff writer Erica Hall: 925-5565, firstname.lastname@example.org