Proposed budget causes council consternation
November 12, 2013
By Peter Clark
A decreasing ending fund balance dominated the third and longest of the City Council study sessions on the budget Oct. 29.
The sustainability of the revenues balancing expenditures was just one of a few larger changes the council discussed during the public meeting, as the deliberations continued over the suggested $98 million in budget expenditures.
Previously raised as the council began considering Mayor Ava Frisinger’s proposed budget, multiple council members expressed concern over an established administrative pattern of siphoning funds from the ending fund balance into departments to cover expenditure. Cities maintain an ending fund balance to protect against unexpected expenses.
“At the end of end of 2011, we had $8.9 million in the ending fund balance, at the end of 2012 we had $8.6 million,” Councilman Tola Marts said. “So I am not willing to pass a budget that only ends up with $7.5 million in the ending fund. That’s not sustainable.”
‘Sustainable’ has turned into the watchword of the council’s discussion over how the budget is balanced. The downward trend seen in the ending fund balance has alarmed members who say they want a more cautious approach to the city’s long-term finances.
“We have a budget here where I don’t see expenditures covered by ongoing revenue, and I’m very interested in how do we make that sustainable,” Councilman Josh Schaer said. “Using ending fund balance for operational or ongoing expenditures, I’m not as comfortable with that. How do we get sustainable?”
The council called other proposed expenditures into question.
The first was the touted $55,000 allocated towards a feasibility study for a city campus, which was one of the council’s goals set in the spring retreat.
“That’s one that I call into question,” Council President Fred Butler said. “That seems like a pretty significant investment for a study given where we are with respect for our budget itself. That was my goal for the goal setting retreat, but now that I see what that’s going to cost and what’s allocated against it, I’m having a difficult time supporting it.”
A business marketing plan costing $50,000 seemed premature to Councilwoman Stacy Goodman. It would be spearheaded by the Economic Development Department in cooperation with the Issaquah Chamber of Commerce.
“I’m not at this point convinced that we would be ready for a marketing plan,” Goodman said. “I’ve been pretty clear over the past many months that I think we’re putting the cart before the horse, and we don’t have an updated vision for our city. And so, I’m unconvinced that I would support the expenditure for the marketing plan right now.”
$87,000 for a Tibbett’s Creek Manor kitchen remodel and $100,000 for a Northwest Sammamish Road pedestrian/bike plan study both received questions on whether the investments were valuable.
The ending fund balance issue remained the most discussed in the meeting.
“I don’t think it’s any way to run a city where we jerk ourselves around from year to year,” Councilman Paul Winterstein said. “We have to have a longer term look. We can’t step down because this is the cash based accounting we can do this year and try to react to it next year. I think we need to take a longer look.”
Marts requested solutions from the city on how the shrinking ending fund could be addressed.
“I would like to suggest the administration prepare some options before us for how to close that,” he said of the gap between ending fund balances. “Because I won’t be able to support a budget that continues to erode the general fund.”
City Administrator Bob Harrison pledged to compile a list of options that could correct the imbalances in revenues and expenditures without having to take funds from the ending fund balance and have it to the council by Nov. 6.