Budgetary post mortem
Keeping Cheney’s 2013 budget close to 2012’s, despite revenue losses, took variety, some pain
By JOHN McCALLUM
Solving Cheney’s budget dilemma required a variety of approaches and maneuvers, most of which seem to have had one common denominator – a little bit of pain. It’s pain city officials hope is kept internal through increased staff duties here, putting off purchases there, and not extended outside the confines of government buildings to a reduction in services for its citizens in order to balance its $23.3 million 2013 budget.
Call it what you want – hole, gap, separation – the city entered the budgeting season facing an estimated $700,000 decrease in state revenue from taxes and fees and other sources crucial to the city’s general expense fund. About 90 percent of the general fund is used to cover labor costs, or what Mayor Tom Trulove termed “face to face services.”
For City Administrator Arlene Fisher, the process didn’t start at minus $700,000, but at zero.
“My budget philosophy is zero-based,” she said. “You start with zero, you anticipate your revenues and you line up those revenues with your expenses.”
When those numbers didn’t line up because of a mixture of state losses, overall city property value decreases, etc., Trulove, Fisher and the other departmental heads began looking at ways to make ends meet. One way was reviewing various departments reserve funds.
Trulove said they felt the reserves level were higher than needed over the past several years, a result of what Fisher said was channeling unanticipated revenues into departmental reserve accounts rather than finding ways to spend the money. The review indicated some reserve funds could be used without impacting departmental readiness for unanticipated expenses.
“We need a certain point for operating reserves, and we felt we were there,” Trulove said.
Trulove said department leaders and staff members were also asked to look at their functions and find ways of doing things differently while maintaining, and hopefully bettering, services. That started in one of several departments funded mostly through the general fund – Community Development.
The department had been seeing a citywide construction load requiring three building inspectors. With a decline in building due to completion of major projects and other economic infill that level amounted to being overstaffed, Trulove said, so one inspector was let go, eventually gaining employment with the city of Liberty Lake in a similar position. The other two were transferred to the authority of Public Works since much of what they do is coordinated with that department.
“It was just a better fit,” Trulove said.
Community Development’s code enforcement function was also reviewed. Trulove said it was decided those duties could be performed by existing personnel, and thus the code enforcement officer position was eliminated.
Community Development Director Brian Jennings said he and other staff would pick up some of the position’s internal duties, with calls about code infractions being handled by departments associated with that type of call. Trulove feels the changes, while resulting in a “much, much smaller Planning Department” will also result in a better, more efficient permitting and building approval process.
“We’re trying to streamline the process, do it the first time and get away from being so regulatory that they (developers and contractors) feel frustrated,” he said. “If things go well, citizens shouldn’t see a drop (in services). If so, we’ll need to adjust.”
Cheney also eliminated an in-house information technology position after review indicated they were doubling up on the position’s functions with what was being provided via contract with the city’s IT provider. Finally two-thirds of the salary and benefits for a collections person were transferred from the Finance Department to Public Works where that person will handle enterprise funds such as water, sewer and garbage. Trulove said changes to the city’s residential utility deposit and the hiring of a collection agency reduced the position’s amount of work.
“The business there just kind of disappeared,” he added.
Trulove said it’s hard to tell how much the city will save through the layoffs, especially when taking into account unemployment compensation and medical programs such as Cobra.
“We think it will be around $350,000 a year,” he said. “We hope we can do it without any negative impact to customer service.”
Fisher said they have also put off some capital projects spending until 2014, or found other ways to accommodate the requests. One of those came from the Police Department in the form of a request for a new mainframe computer.
After consulting with its contracted IT provider, Fisher said they realized they could devote a portion of the city’s mainframe, used by finance and other departments, to the Police Department’s needs while preventing accidental information sharing between the two.
The city also put a stop to any departmental purchases outside of normal operating needs – payroll, materials, etc. – in August. Finance director and city clerk Cindy Niemeier said the move is not unusual, but came earlier than the city’s normal termination of such purchases in fall.
It did come with risk, however, as both Fisher and Niemeier said some employees are in need of new PCs to replace current models that were purchased six, seven or more years ago and are difficult to use.
“People’s computers are crashing right and left,” Niemeier said. “Many departments are experiencing the blue screen of death.”
“When you see the blue screen of death, you hope your life doesn’t melt,” Fisher added.
The city has also realized savings by engaging in lease contracts, such as with police vehicles and IT services, rather than through new purchases. Fisher said one benefit to leasing is the product comes ready to go and includes upgrades and service support.
Finally the city was able to close the $700,000 difference through additional revenues elsewhere. Construction projects, particularly large ones such as the recently completed Cheney Middle School and current ones like Eastern’s Patterson Hall remodel and a new residence hall bring sales tax revenue into the city.
That revenue was made more potent in 2008 through implementation of destination based sales tax. Prior to 2007 Washington retailers collected sales tax based upon the jurisdiction where the product was shipped but in that year the state Legislature passed a bill changing that to collection based upon the destination of where the product is shipped or delivered.
Fisher said they dedicated a city employee to track the state sales tax data, contact vendors delivering product into Cheney and educate them on making sure they applied the proper taxing code to reflect Cheney rather than Spokane County. According to Niemeier the effort has led to an increase of 25 percent in the city’s collection of sales tax revenue.
“It takes one person’s time, but that return is tremendous,” Fisher said.
All three believe the city’s budgeting steps, as well as continued construction revenues, should get Cheney through 2013. But with Eastern’s new dorm and Patterson Hall construction wrapping up towards the end of next year, the outlook in 2014 is veiled by clouds of uncertainty.
“I don’t know what’s going to be in the hopper by then,” Niemeier said.
City officials are hopeful that a couple of large Eastern projects, the privately funded Gateway and state funded science building expansion, receive funding to get off the ground in 2014. There’s also the hope that new marketing efforts will land tenants in the city’s Commerce and Industrial Park and that the economy will continue to rebound, bringing new residential construction with it.
As for the state providing more money, Trulove said they have problems of their own, problems for which the solution may be to create more financial burdens on cities, towns and counties. The state is facing an estimated $900 million budget deficit already, and is under a court order to adhere to its constitutional mandate to provide adequate funding to K-12 education, requirements that could lead to the Legislature sweeping other funds, like the Public Works Trust Fund that helps jurisdictions with infrastructure projects, into the general fund.
Much of that begins when the Legislature convenes Jan. 14. But as far as Fisher is concerned, she’s back to zero.
“We never stop budgeting,” she said. “We really don’t.”
John McCallum can be reached at firstname.lastname@example.org.