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Council imposes cap on spending, will slash staffing
Operations costs will be tied to the Seattle consumer price index; two-year cycle OKd.
The City Council clamped its jaws on city expenses that some fear may soon break free and run into the wilds of spiraling debt.
Were putting our money where our mouth is, said Councilman Bob Scales before the council on Monday voted to cap city operating expenses, including staff salaries and benefits.
The increase in overall operating costs in the citys preliminary budget will be limited to a formula that includes the Seattle-area consumer price index and the change in Bainbridges population over 12 months.
The consumer price index is a common measure of consumer price inflation. The CPI measures the average change over time in the prices paid by consumers for goods and services. The U.S. Bureau of Labor Statistics collects price information and calculates the CPI data.
Councilman Nezam Tooloee, who spearheaded the spending cap, drafted charts that show projected city revenues dropping below expenses next year. By 2012, operations will have outpaced revenues by almost $10 million, according to Tooloees calculations.
The cap is aimed at reversing current trends, Tooloee said.
This forces us to make change happen, he said. Its not going to be easy, but it is incumbent upon us to do it.
City Finance Director Elray Konkel agreed that the proverbial lines will cross if the city doesnt change course. He noted that city revenues are growing by 7 or 8 percent, while operating costs are growing by about 9 percent.
Current operating costs are about $26 million. About half is spent on staff pay and benefits, while about $10 million goes towards various professional and other services, Konkel said.
However, the new cap puts into policy changes that typically happen through logical adjustments made by the council and city administration, he added.
The lines would never actually cross, Konkel said. We wouldnt produce a budget that puts us in a $10 million deficit. The fact of the matter is, wed work out our shortages and challenges.
Councilman Kjell Stoknes also expressed concerns that the mandated cap sends the wrong message to staff.
I struggle with this because it says we dont trust the administration to do the right thing, he said.
Bob Fortner, of the watchdog Bainbridge Resource Group, said the cap only addresses the symptoms of the underlying problems of city financial management.
The root cause of the citys money woes is a breakdown in the collaborative and deliberative process between the council and the administration, he said.
Fortner advised the city to look at how other local jurisdictions, including the fire department, school district and park district, have tightened their belts when revenues waned.
Its time for the city to follow in those footsteps, he said.
City Administrator Mary Jo Briggs welcomed the councils efforts for greater fiscal responsibility, but said the cap should be spread over more than just one part of the budget.
Operating costs and capital costs are intertwined, she said, referring to the portion of the city budget that pays for new construction initiatives like bike lanes, open space acquisitions and road upgrades.
As an example, Briggs pointed to the $11 million update of the sewage treatment plant, which is funded through both operations and capital improvement funds.
You just cant separate the two, she said.
In other budget developments, the council approved a new two-year budget cycle aimed at boosting efficiency and streamlining what has become a lengthy annual process.
This is an effective way of limiting deliberation and preparation, said Briggs, who said biannual systems have worked well for other municipalities where she was previously employed.
The city will undergo its last annual budget process this year, in preparation for 2008. The biannual process begins in 2009.
Biannual budgets are a better match for city planning and construction project cycles, Briggs said.
It makes you look (beyond) the segment of one year and more at things in a broader sense, she said, citing the Winslow Tomorrow planning initiative. Large projects almost always take longer than a year.
The City Council on Monday began sharpening its budget ax for a sizable cut in city staff.
The proposed cost-cutting measure, which was approved as a motion and could be formally enacted as an ordinance in the coming months, would reduce next years expected staffing level of 152 down to 135 by 2012.
Drafted by Councilman Nezam Tooloee and approved by the council Finance and Personnel Committee, the reduction is based on recommendations from a recent benchmarking study that showed the citys staffing levels are about 23 percent higher than comparable cities.
The study also warned that recent growth in staff positions could swell employee ranks to 176 over the next four years.
The cuts will help reduce the citys operating costs, according to Tooloee. Staff salaries and benefits add up to about 50 percent of the annual operations budget.
Councilman Jim Llewellyn, who chairs the finance committee, said less staff are needed now that many large city projects are finished, scaled back or well under way, such as the Winslow Tomorrow initiative and improvements to North Madison and Grow avenues.
It should be easy do work we need with fewer employees, he said.
The desire for staff cuts was also based on another study recommendation to cut down on various committees, commissions and task forces, which require staff support.
Im not running for reelection, so I can afford to be blunt and candid, Llewellyn said. I think the publics been process pampered. Weve pampered citizens who are now used to getting a whole lot of public process, public hearings, public meetings...public everything. Its process at the expense of progress. And all that process love has a price tag.
The 4-3 vote on exploring the staffing reduction hinted that contentious deliberations are on the horizon.
Llewellyn and Tooloee were joined by councilors Debbie Vancil and Bob Scales in support of the reductions. Councilors Chris Snow, Kjell Stoknes and Bill Knobloch voted against it. Knobloch said staff reductions are inevitable, but stressed that more information from the public is needed before the city makes sizable cuts.
I didnt vote against staff reductions, he said. Were going through the pains of deciding what we can afford, and thats directly related to levels of service. We need answers from the community on what they expect so we can tell them what we can afford.