Council uses cuts and hikes to balance budget

By Meg Olson

Despite pleas from the audience to hold the line on new taxes Blaine city council passed a spartan budget that still needed a three percent utility tax hike to remain in the black and stay that way down the road.

“I don’t want you to go away saying ‘they didn’t hear a word I said,’ because we did,” said council member John Liebert. At their November 25 meeting council voted unanimously to stick to their guns on their initial recommendation, presented at the November 11 council meeting. Overall the budget is almost nine percent less than last year’s, which was achieved by eliminating 2.5 positions on city staff and deferring the purchase of two new police cars. It also holds all department spending to 2002 levels. On the revenue side the budget raises the property tax rate by the one percent allowed under state law and adds a three percent hike in wastewater, water and stormwater utility taxes.

“That puts us in a positive position through 2004 and we’ll review this on an annual basis,” said city finance director Meredith Riley. She explained that council looked at major budget surgery after staff used a new program that looked at the effect of this year’s budgeting strategy five years into the future, and saw it diving into the red.

“Nobody wants to cut staff and raise taxes but we’re taking that hit now,” said mayor Dieter Schugt. “Other cities who aren’t doing this now will face a bigger hit in later years.” John Liebert said the use of the new forecasting models meant the city was building long-term economic stability. “We’re biting a bullet this year,” he said. “I don’t see us looking at increases again and again.”

While audience members who spoke at the public hearing commended the city for grabbing the reins on the city budget tumble, they wanted to see more cuts and fewer increases.

“I’m here to encourage you to exercise focus and resolve,” said Martin Conyac. “ Focus on Blaine’s main problem – wastewater – and don’t get involved in more long term spending.” Conyac said he was on a fixed income and his wife, previously employed at Geographics, was jobless. He said because of their decision to stay in Blaine they would be burdened with the brunt of the new tax burden. “It’s getting like the Social Security thing,” he said. “As other people and more businesses leave town there is more burden on those who stay.”

“If you wish to attract new residents you must make building homes and businesses attractive,” agreed Sandro Westermayer. “Taxes achieve the opposite.”

“I’d like to see us work with the pie we have,” joined in Calvin Armerding. “Taxes are aggressive for economic growth. The government is less effective at spending than private enterprise. It’s a lot easier to spend someone else’s money.” His comments met with muted applause and sounds of approbation from the audience.

Schugt said that without the tax increase the city would need to cut seven of the city’s 35 positions, 13 of which are police officers. “I’m loathe to cut out anyone providing a service and I’m loathe to raise taxes,” said council member Ken Ely. “To not raise taxes would mean we’d have to lay off so many people we would all feel it. I really don’t see how we can avoid making the dreadful compromise of raising some taxes and laying some people off!”

Westermayer said he saw room for more cuts and public safety was not the place to make them. “Examples of planning staff in neighboring cities shows where you need to reduce,” he said. “Lynden which is twice our size has the same number in the planning department as Blaine – four. This city got along very well for a long time with just two.” Westermayer suggested the planning department stop meddling in tourism and economic development and let things happen. “I came here for what Blaine is, not to live in a tourist town,” he said. “Leave development to private people.”
On the other hand, cutting one support staff out of the public safety roster would take an officer off the street, Westermayer said, because someone would need to take over clerical duties. He said his analysis predicted that that would cut the police presence on the street by one third. “That’s unacceptable for the minimal gains of the cost of one office employee,” he said.

Schugt said adequate planning staff was needed for development. “We’re just now catching up,” he said. “I know businesses who chose not to come here because there was no one to work with them.”

Schugt said unknowns like the fate of the city’s insurance policy, cancelled after the wastewater treatment plant debacle and under negotiation, could mean further staff reductions in the future, or they could mean a reversal of the utility tax increase. “We had a meeting with our insurance company last week and it did not look favorable,” he said. “We may be looking at an additional $100,000 and that’s a three percent utility tax increase.”

Council voted unanimously for the 2003 budget, but they were also unanimously apologetic. “Increasing taxes is the last thing we should be doing,” said Bruce Wolf. “Before we looked at raising taxes we looked at cuts to the bare bones,” added Bonnie Onyon. “Nobody up here who votes for taxes and layoffs is doing it as a fat cat,” contributed Ely. “Nobody is personally immune.”..

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