Expect tighter budget for 2010, mayor says

September 22, 2009

By Warren Kagarise

Mayor Ava Frisinger plans to present a leaner city budget early next month, as the City Council seeks to tamp down expenses for 2010. Her budget presentation, scheduled for the Oct. 5 council meeting, follows a round of layoffs last week and several months of money-saving measures.

“It’s pretty obvious that we have made significant reductions in the budget,” she said.

Drops in sales tax revenue and building permit fees have forced officials to lower projections for the general fund — the destination for most tax money collected by the city. City Council members approved a $32.3 million general fund budget for 2009. Frisinger said the general fund budget for next year would be about $28 million to $29 million.

Cash from the general fund is used to pay for everything from police protection to upkeep at city parks.

City Council members adopted a $109.5 million municipal budget last December. Frisinger said further details about the 2010 budget would be available after she presented the spending plan to the council.

“We will be looking at a smaller budget for 2010,” she said.

The mayor will present the 2010 budget less than a month after the city shed 10 employees. Overall, city officials have trimmed the municipal workforce by 10 percent, or 27 positions, through layoffs, severances and vacancies. Frisinger said vacant positions would remain vacant next year, too, except in extraordinary circumstances.

Officials hope for stronger sales tax numbers as the year concludes, and a windfall of building permit dollars as Swedish Medical Center constructs a hospital campus in the Issaquah Highlands.

During a presentation to the Council Services & Operations Committee, city Finance Director Jim Blake said the city took in more sales tax revenue in June than he had expected. Sales tax data usually takes about two months to be processed, he said.

Frisinger said the spending increase could have come as consumers regain confidence in the economy, though she noted how the recession lingered.

But city spending spiked when officials paid severance packages to seven former city employees who opted for the voluntary program.

“On the expenditures side, unfortunately, it looks like it wasn’t good news because it was over $100,000 above the actual forecast,” Blake said.

Employees who accepted the package will receive four months’ pay. Longtime employees will receive an additional month of pay for every 10 years they worked for the city, for a maximum of six months’ pay.

“If we didn’t have that severance package in that given month, we would have went under the forecast by approximately that $138,000,” Blake added.

The finance director said to expect less spending through fall. City officials have also cut costs by delaying the purchase of equipment.

Frisinger said she was optimistic the worst of the recession was over. The recovery, however, could be slow to materialize, she said.

“The description is, we’re at the bottom of the trough and we’re kind of crawling at the bottom of the trough toward the other side,” Frisinger said.

Warren Kagarise: 392-6434, ext. 234, or wkagarise@isspress.com. Comment at www.issaquahpress.com.

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