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Council cautiously upbeat with new budget
Bainbridge Island’s proposed 2009 budget was unveiled Wednesday, leaving most council members optimistic about the city’s financial approach to next year.
The 260-page, 2009-2010 draft budget is the result of extensive work by city staff members who, over the past month, produced a document that worked towards both the council and the city’s goal of sustainable finances.
“The budget is balanced and achievable and based on the capital facilities plan adopted in the summer,” mayor Darlene Kordonowy said. “It works towards a truly sustainable organization.”
According to Kordonowy, it is the first step in setting realistic goals in the current financial situation and also mending some weathered relationships among the government and local residents.
“We need to regain the trust of the community,” Kordonowy said. “That was the dream of home rule and local government.”
Council members, who will have two weeks to scrutinize the document before reconvening to discuss it, were impressed with a more accessible layout and measures that edged toward further transparency and accountability.
“We need to understand the economic reality, and I think this draft budget allows us to do that,” council member Kjell Stoknes said. “It is clear enough that we can ask questions.”
In the past, proposed budgets have been criticized for their overly complex layout and reasoning. This year’s budget includes a basics of accounting principles and lays bare expenses by department and fund sources as well as dissecting reserve funds that have been lumped together in the past.
“It’s improving,” council Chair Bill Knobloch said. “But there is a switch from using cash on hand, to councilmanic debt to utility fund revenue. That planning has me concerned if that is the proper direction we should be going.”
At the special council meeting, Knobloch called for a thorough audit of the utilities, expressing skepticism at the use of utility funds for capital projects. It was a point he reiterated in conversation outside of the meeting.
“It is a necessity for that audit before we can authorize that amount of money,” Knobloch said regarding the use of utility-generated revenue on capital projects. “We need to make sure the expenses being charged by the city are fair and equitable, this is the time for the city to have transparency.”
According to City Administrator Mark Dombroski, growth of operating expenses are projected to remain below the level of inflation, but on the utility side it will exceed predicted inflation levels.
There is expected to be $1.5 million in debt service on the utility side by 2010, largely attributed to the wastewater treatment plant.
In a move to further clarify the city’s spending ambitions, the budget was laid out as a two-year plan. It is the first proposed biennial budget the city has developed.
Council will first agree on 2009’s plan and then move to approve the direction of the 2010 budget.
This is important, according to Finance Director Elray Konkel, because “the performance of one year has a direct impact on the other.”
Konkel also said that through the coming months and after the approval of the budget, it will be important to remain constantly vigilant on the state of the city’s finances.
“Certainly in tough economic times things will roll down hill,” Konkel said. “Access to money will be drastically affected by the economy; we need to pay attention on a weekly basis from now on.”
Reductions to staffing levels were also a point Dombroski highlighted. Although there were no layoffs, cuts through attrition meant the city had a target of 140.7 employees by the end of 2009.
That trend would continue as the city tries to reach 138.47 full-time employees in 2010.
Further hoping to make the city more efficient and accountable is the development of performance-based progress measures.
These are necessary, said Dombroski, since there will be continued reshuffling of staff and priorities within the city.
“We need to give staff an opportunity to create those processes,” he said. “I have a little experience. Through all my research it takes five to seven years to perfect it. It’s an evolution in process.”
“It gives me confidence,” Kordonowy said regarding the new measures and reductions.
“Our management team paid attention to the numbers and didn’t react but acted appropriately. The biggest challenge will be to decide how we will serve the community to improve our effectiveness in constrained conditions.”
Other cost-cutting measures include: eliminating support for some public events; deferring maintenance of gravel roads; reducing the frequency of downtown street sweeps; and deferring a water-meter replacement program.
Additionally, facility maintenance will only occur during operating hours and the amount of time staff dedicates to counter service will be limited.
But, while cuts were thorough and broad, most councilors expressed some continued concern about the financial assumptions the budget was based on.
“I am less concerned about the nuts and the bolts than I am about grasping hold of the financial reality we are in,” Stoknes said. “I want to make sure we build a solid foundation of understanding.
“I will come back to the financial capacity analysis as the foundation,” he continued. “I am hoping to have someone in administration show us how the 2009 and 2010 budget are consistent with financial-capacity analysis.
The city is predicting a leveling off of revenue declines and a slight uptick by 2010.
Kim Brackett brought up that Bremerton was making assumptions that the economy would start to rebound by 2012.
“It’s a humbling document and I look forward to getting my teeth into it,” Brackett said.
“But I am glad to hear it is a living document. (The economic situation) seems to be changing daily so it is important that we remain flexible.”