Thoroughly cleaning Cheney's budget

For City Administrator Mark Schuller and Finance Director Cindy Niemeier, Cheney's $6.728 million 2015 General Fund budget may be one of the most reviewed and scrubbed general fund budgets ever done.

"The red pencil was out," Niemeier said of a budget that, while not reflecting a drastic financial situation for the city, doesn't leave much leeway for other things either.

Schuller said it's a very "realistic" balanced budget, reflecting the current condition of the city's revenue streams while also acknowledging challenges faced by several departments, such as police and fire where paying needed overtime is a concern. The budget also maintains the city's needed cash reserve amount of 15 percent of the general budget, figured in 2015 at $1,009,200.

The reserve is needed because, unlike personal finances with regular monthly income and expenses, cities face regular monthly expenses, but not defined, regular monthly income. The reserve helps Cheney meet payroll in months when revenue exceeds expenses. If something unforeseen occurred, Schuller said they would face a decision on whether to cut into that 15 percent, or find the money elsewhere.

"We're at the point now where we wouldn't be cutting services, we'd be cutting people," he said.

The city has implemented a number of cost cutting and maximization measures over the last several years as general fund revenues from the state and other areas have declined, eliminating some positions, consolidating others and finding ways to stretch limited dollars. One of the departments taking the largest financial hit is Administration, where Schuller has taken on both the duties of his new position as City Administrator and his former duties as human resources director, as well as serving as interim parks and recreation director, in an effort to save money.

Also this year a $100 limit was imposed on department heads' flexible spending where before it had been $700, above which they needed to get administration approval.

"We're in tight times here," Schuller said. "Just because you may have some extra money, don't assume you can go out and spend."

The limit doesn't mean the city won't make needed big-ticket purchases, however. Especially when it comes to public safety, as a recent $3,200 expense for new tires for the city's patrol cars will attest to.

But while the city has taken steps to control its expenses as best it can, it's also looking at taking steps to exert some control over the other side of the equation - revenues. Cheney's challenges began over 10 years ago with the loss of motor vehicle excise taxes due to citizens initiative, reduction in what municipalities can collect in annual levy increases - also due to passage of a statewide initiative - and the loss of large sales-tax producer Bonanza Ford. Like most other cities, it was impacted by reductions in state revenues for reasons ranging from the 2008 Great Recession to the loss of money from the voter-approved initiative privatizing liquor sales.

The city has come to rely more on sales tax revenue, something driven by construction. With large projects at Eastern Washington University and the Cheney School District having been completed, Cheney officials are hoping the new housing market picks up while other potential projects such as Eastern's new science building and a renovation and expansion of the high school come through.

Schuller said they also going to focus more actively on economic development in the city, with he and Mayor Tom Trulove taking a more active, hands-on approach. City staff have streamlined development regulations, hopefully making Cheney more business friendly while also creating incentives, such as the City Council's recent vote to waive upfront payment of utility hookup fees. Schuller said they've also begun working more closely with Greater Spokane Incorporated to market the city's advantages as a home to new businesses.

"At this point, we'll go any direction we can," Schuller said.

And in the short term, both he and Niemeier see signs of a revenue turnaround. For Niemeier, it's coming in the shape of real estate excise taxes, REET, which in 2005 brought in $181,736 to the general fund coffers, but dropped to just $54,312 in 2011.

REET has been slowly climbing, due to increased housing sales, and can be used to fund capital items and capital facilities. What gives Niemeier hope is that through the first nine months of 2014, the $120,364 amount received is 87 percent more than through October 2013.

"It isn't going to be a bare bones budget forever," Niemeier said.

John McCallum can be reached at jmac@cheneyfreepress.com.