City to cut costs by $1.6 million

May 5, 2009

By Warren Kagarise

City of Issaquah officials will slash spending by $1.6 million as they work to patch a $1.5 million budget gap. Officials will defer buying some equipment and supplies, delay filling vacant positions and enact other measures to save money. City Finance Director Jim Blake said the city can avoid tapping into rainy day reserves to cover costs.

Blake presented the forecast at the April 28 Committee-of-the-Whole Council meeting. In February, City Council members asked for quarterly updates on city finances.

A construction slowdown and sluggish spending has contributed to the shortfall, said Blake. Key sources of dollars for the city — building permits and sales tax revenue — have dropped.

“Most of the revenues are doing very fine, coming up with meeting the budget or exceeding it,” Blake said. “The side we have to watch, again, is the permits side. The sales tax primarily is based on the sales tax on the construction side. It’s more or less all attributable to the permits coming in.”

According to budget documents, the city had $4.59 million in reserves March 31. The city should have about $7 million in reserves by the end of the year, according to budget projections.

City Administrator Leon Kos said officials hoped to limit the impact of cuts on city services.

“Thanks to long-term planning and the high quality of Issaquah’s infrastructure, we’ve positioned ourselves to withstand this downturn,” he said.

Blake cautioned against staff cuts in the city Building Department because construction will likely rebound as the economy recovers and workers would have to be re-hired.

Councilman David Kappler suggested the city Planning Department use the construction slowdown as an opportunity to update codes and planning documents to prepare for the next round of development.

“The economy will turn around. I’m not going to say when, but it will,” Kappler said. “And I want to be ready for that. To me, being ready for that is worth even digging down a little bit into some of our reserve funds.”

Officials said formulating the 2010 city budget could be difficult if the economy fails to improve.

“Where there’s going to be a risk factor is 2010 if things continue like this or get worse,” Blake said.

Despite challenges posed by the ailing economy, officials said they took steps to limit the impact of the recession on city departments.

“During these unsettled economic times, I wanted to assure the council that the administration is working hard to manage the 2009 budget,” Kos said. “Each month, we carefully review the revenues and expenditures to ensure that the budget is balanced.”

Councilman John Rittenhouse asked if spending cuts at the Issaquah Police Department would impact public safety. Blake and Kos said the cuts did not affect police patrols.

City Council members have directed staff to avoid using reserves to pay for expenses. The council adopted a $109.5 million budget for 2009 after they cut spending and delayed several projects to save money.

“We’re well prepared to keep the budget balanced,” Kos said.

Reach Reporter Warren Kagarise at 392-6434, ext. 234, or Comment on this story at

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One Response to “City to cut costs by $1.6 million”

  1. Sarah Tuohy on May 6th, 2009 6:24 am

    Congratulations to our Mayor, Council members and City Hall. It’s gratifying to live and work in a small city that puts emphasis on the long view regarding our economy and infrastructures. I applaud not slashing jobs but using the ‘down time’ to update codes and documents related to our long term health as a community. Its also comforting to know we have our police personnel intact and a bit “o money in the bank.” Good news in a generally bad news week! Thanks.

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