Revenue shortage or spending problem?

Roegner questions city’s claims about budget shortfall.

The Federal Way City Council meeting last week was filled with statistics and charts showing why the city does not have enough money to pay its bills, as well as attempts to justify Mayor Jim Ferrell’s recommendation for the council to raise taxes on utilities and admissions.

But is the challenge really a revenue problem or a spending problem?

What do you do when your income is less than your bills? Do you take money from your neighbor? No, you cut, but City Hall has continued to spend while blaming other causes.

The meeting was great theater, with creative presentations and the mayor’s staff demonstrating their skill at using statistics to try and box the City Council into a political corner. They blamed I-747 for capping the property tax, even though the voter initiative passed in 2007, 11 years ago. They also blamed the recession of 2008, which did have a significant impact on government revenue along with everyone else, but that was 10 years ago. They raised the sensitive issue of pay raises for non-union employees and the need to stay competitive with surrounding jurisdictions. They admitted, however, that the last salary survey was done in 2010, eight years ago, thus reducing their pleas to anecdotes, not facts.

Ferrell had his staff tell the public that the budget was cut to the bone.

That is not a true statement. There have been no cuts, only new requests that were not approved yet.

City Hall identified its chosen solution of raising taxes two years ago, but only in the past two weeks have officials actually tried to make the case to the public. Ferrell says the city is $854,000 short. But whose fault is that?

Ferrell has been mayor for over four years, with very capable finance staff to advise him and the council. If these years-old issues were the problem, why did he and the council keep spending money the last four years? Why did they build the Performing Arts and Event Center? Why did they build a new and expensive Town Square Park without considering the long-term implications of taking care of the park? Why did they continue to add city staff?

Ferrell said “some may point to the investments in our downtown when it comes to our current budget shortfall, but the two are not directly connected.” At best, that is a misleading statement. The operative word is “directly.” Ferrell knows full well that any shortfall at the PAEC is made up by the general fund. The two are one step apart but definitely connected. Also, the city was short $7 million and had to do an interfund loan on construction. It is due in three years.

Last year, the PAEC was subsidized by about $650,000. This year the subsidy will be $454,000, and it will continue for several more years. And recall that city officials bought the Target property and may have overpaid to get it. Recently, the city had to refinance that purchase because it had not been able to sell it. Now officials appear to want to hold onto it until after they build a planned downtown grand stair case.

Ferrell complained that the franchise agreement between the city and Lakehaven Utility District actually costs the city money. But it was negotiated by Ferrell’s administration.

If he was that concerned about taxpayers, he would have initiated a hiring freeze many months or even years ago. It was implemented three weeks ago and only after prodding by the two new council members, Hoang Tran and Jesse Johnson. Incumbent council members share responsibility for the current situation, and other than Deputy Mayor Susan Honda, they lobbed softball questions to the staff as they need the tax increase to bail themselves out.

If the situation was really so dire, why has Ferrell continued to add positions, and friends, to the payroll? Ferrell just hired a new communications officer at $65,000 per year. He used $116,150 to hire an old friend from his county prosecutor days with no city management experience as a senior adviser. A clerk in the mayor’s office was hired at $40,500 to handle reception duties after Ferrell moved council member offices to another part of the building and the council’s administrative support was no longer available to serve in a dual role. And, remember, two years ago he put a campaign supporter in a $60,000 building official job, for which he did not meet the qualifications. Other questionable expenses include the branding study that only produced a new city tag line at $68,000. Or spending $300,000 trying to run homeless people out of town by closing their encampments. Those expenditures are over $1.1 million — more money than the city says it is short.

The mayor and council’s view seems to be only as long as the next election. Remember, last fall Ferrell, Honda, Councilman Martin Moore and candidates Tran and Johnson said they opposed the utility tax increase. Only Honda and Johnson stayed true to their promise to the voters. Tran acknowledged the flip flop but may not have been aware of the city’s fiscal history at the time. But Ferrell and Moore knew.

The mayor and council identified their solution, a tax increase, two years ago and took no steps to control or limit the spending and were not transparent with the public. Now they want Lakehaven Utility District and Federal Way residents to solve the problem they created.

Despite pledges to the contrary, Ferrell continues to act like an eighth council member by attempting to influence council debate. The mayor’s participation should be minimal and only after he gives up the gavel.

At its last meeting, the Lakehaven Board of Commissioners said they will pursue legal action if the city moves ahead with the utility tax, which the council seems bent on doing. A situation that was entirely preventable will continue. And if the city wins, guess where the money will be spent?

Federal Way resident Bob Roegner is a former Auburn mayor and retired public official. He can be reached at bjroegner@comcast.net.

Editor’s note: This column was changed to reflect correct salary numbers for the senior adviser and a clerk, previously listed as an administrative assistant. As well, the shortfall the city is trying to address is $854,000, not $980,000, which is the amount the city anticipates raising if the City Council approves levying a proposed tax on Lakehaven Utility District.

Editor’s note: This column was changed to reflect correct salary numbers for the senior adviser and a clerk, previously listed as an administrative assistant. As well, the shortfall the city is trying to address is $854,000, not $980,000, which is the amount the city anticipates raising if the City Council approves levying a proposed tax on Lakehaven Utility District.