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Budget change could be pushed back
For now, the plan remains in place to avoid the pitfalls associated with crafting a yearly budget, the city is going biennial. But with the economy and the city struggling, even those plans are subject to change.
Im all in favor of a biennial budget, City Administrator Mark Dombroski said. But what I noticed during the capital facilities planning process is what kind of education we still have to do for better long-term financial forecasting, to be prepared for a two-year budget. We have the skill sets. I know we can get it done. But I didnt see that education happening at the city when I got here.
So instead of rolling out the new plan, the city may decide to rollback to the old days at least temporarily with a single-year budget.
Under the new plan, the city would develop a single-year budget for 2009 and 2010 and switch to a biennial budget for 2011-2012. The change would be put off two years because it cant occur in an off-year.
The council voted last year to make the switch to a two-year budget, after repeatedly running into problems under the old yearly system. The idea was that crafting a budget every two years would streamline efforts and allow the council and staff time to spend off years focusing on business that now is crowded out by time-consuming budget work.
But as the time for implementation nears, Dombroski said a number of factors make the move impractical.
The recent downturn in real estate sales and land development on Bainbridge Island has created an appropriate sense of caution about future revenues, Dombroski said in a May 19 memo to the City Council. The current downward trend is not the ideal time to institute a new longer-term budgeting methodology.
Most have acknowledged the shortcomings of the current system; all realize the citys current financial quandary.
If they continue on their current trajectory, revenues could be off by as much as $2.5 million from what was projected, according to finance staff. To address the problem, several cuts have been made recently to both the operating and capital sides of the ledger.
But Dombroski cited reasons for the possible tactical shift that go beyond recent economic uncertainty.
He said the city does not have adequate policy in place to assist in guiding departments in constructing a biennial budget, and that the citys financial forecasting tools simply arent ready for the switch.
He worked with biennial budgets in his former role as Finance Director at Seattle City Light, and said that in the long-term, a biennial budget is still a better option.
But the city, he said, needs more time to prepare.
Dombroski said it will take a few years to realize the impact of ongoing efficiency improvement efforts, like those recommended in last years benchmarking study.
Completed by consulting firm CH2M Hill, the study found the the city uses more resources to accomplish less than other comparable cities.
Many have suggested the city focus on implementing the studys recommendations including specific ideas about how to operate more efficiency since a shortage of money will limit the amount of capital work it can do anyway.
Dombroskis plan will be discussed tonight by councilors, who are in the midst of working on the capital plan.
A special workshop for that purpose will be held from 10 a.m. to 2 p.m. June 4. The plan is slated for passage at the end of June.
If councilors disagree with Dombroskis recommendation to stall the budget process shift, he said staff will work diligently to provide the best possible two-year budget we can produce within our capabilities.