City plans to keep employees, cut operating expenses for 2021 budget

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The grass could be longer at city parks next year and emerging issues could take longer to fix.

The city of Blaine is struggling through the process of drafting a 2021 general fund budget with a roughly 7.6 percent reduction in spending from the city’s amended 2020 budget and about 10 percent from the original 2020 budget before the city cut costs due to Covid-19 and the border closure. The general fund pays for staff salaries, supplies and some other city expenses.

City council directed staff to plan a reduced budget at a September 14 meeting, after city staff presented three options for budget planning: A worst-case scenario, a same-case scenario and a scenario that envisioned the city going back to pre-Covid-19 revenue. Council directed staff to plan for a 1 percent reduction from the same-case scenario. 

City manager Michael Jones brought a draft general fund budget to city council at an October 12 study session that accomplished the bulk of spending cuts to the $6.7 million budget but still fell about $81,000 short of the goal.

“Under this budget we will have less capacity to respond to emerging issues. There will be more reductions in service levels,” Jones told council. “This budget is not a budget I’d choose, it’s not a budget that I think you’d choose. It is a circumstance of the times. We can’t do this year over year and run the kind of government, the kind of city, you’d be proud of. We can do it for a year, maybe two, beyond that you’ll see a wearing down of people, resources, facilities.”

Much of the cost saving in the draft budget comes from a reduction in travel and training expenses and a reduction in operating supplies. All city departments cut their budgets for travel and training would be done only to keep necessary certifications, Jones said.

“In some areas we will be consuming our inventory and coming to the end of the year with less,” Jones said. “In some areas that’s not a big deal. In others, we will have to be more careful.”

The budget doesn’t call for layoffs, but the city wouldn’t fill some vacant positions left open by people retiring or resigning, and people working half time would fill some positions. It also cuts some long-standing contracts, such as a contract with a landscaping company, in favor of doing a reduced amount of that contracted work with city employees. The proposed budget does include replacing or rehiring key positions.

“Reduced travel and training and reduced operating supplies is a theme through out the entire budget,” Jones said. At times, he added, maintenance requests won’t be fulfilled unless necessary. “There will be times when we have to do that and we will probably have to do that more than we want to.”

The draft budget also cuts $60,000 in funding for the Blaine Senior Center and $30,000 for the Boys and Girls Club, though city council allocated $30,000 from its federal CARES Act funds to each of those organizations.

At the October 12 study session, Jones asked council for direction on where to make further cuts, saying that he’d be speaking with the unions that represent city employees to negotiate some reduction in wages unless council had other ideas.

Most of council wanted to take a closer look at its budget for lobbyists. The city has contracted with Gordon Thomas Honeywell – Government Affairs since 2017. The city spent an average of $46,000 per year for the company’s lobbying services from 2017 to 2019, and has so far spent $17,901 this year. For 2021, the city’s draft budget included $35,000 for the company.

The company has focused on lobbying the legislature to secure funding to extend utility infrastructure to east Blaine for housing projects, the exit 274 transportation project, grade separation for the VACIS system/BNSF tracks, and coordinating with WSDOT, the governor’s office and legislature to continue to advance the Bell Road Grade Separation project.

In that time, state legislature has appropriated $1.7 million in funding for the east Blaine infrastructure project and $1.55 million for the Bell Road project, for a total of $3.25 million, the city noted in a memo to council.

Though the city received $3.25 million in state funds for its transportation project over the past three years, some council members argued that getting funding would be more difficult in the next session.

While the state is expected to cut its operating budget, the capital budget is anticipated to allocate $2.5 to $3.5 billion in funding throughout the state, according to a memo from city staff for an October 19 special meeting on the general fund budget.

In that memo, city staff recommended that council keep the proposed full-year contract without changes. Under the contract, the lobbying firm would provide a constant presence in Olympia while working with legislators, the governor’s office and state agencies to further the city’s goals, according to the memo. 

The other options laid out in the memo are having no professional lobbying services or hiring the company for just the five-month legislative session, from January 1 through May 2021.

After the October 19 meeting, most councilmembers were in favor of pursuing a five-month contract with the lobbying firm. Councilmember Alicia Rule argued for cutting the lobbyists’ contract.

“My thought about this is, we’re talking about cutting jobs. That’s what this is coming down to – do we cut the lobbyists or we do cut someone on staff? And I’m feeling more protective of our staff members,” Rule said.

After the discussion, Jones said he would try to negotiate some cuts with employee unions and depending on how that goes, he would keep the full-year contract with the lobbyists or cut it to a five-month contract.

“What I need to do is have some meetings with the employee unions to see what we might be able to do to find the relief from the $80,000 or so that we have in deficit,” Jones said.

He said later in a phone interview that options for reducing expenses include reducing raises for cost-of-living adjustments, or asking for more voluntary unpaid furloughs.

If revenues to the city next year turn out to be higher than expected, the city can amend the budget. The city’s general fund is funded mostly through property taxes, sales taxes, a business and occupation tax, utility taxes paid by public and private utility companies, and charges for services. For 2020, the city is on track to collect $324,430 fewer in sales taxes than it originally budgeted.

City council will discuss 2021 budgets at several upcoming meetings: a Monday, October 26 study session on the public works budgets and a public hearing on revenue and property taxes, November 9 discussions on lodging taxes and capital improvements, and a public hearing on the budget that opens on November 9 and continues on November 23. City council plans to adopt a 2021 budget at a meeting on Monday, December 14.

 

 

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