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Maybe it's time to catch our breath
Last week, the citys chief money guy, Ralph Eells, gave the council a rosy rundown on the first six months of the year. Income is over budget. Expenses are under budget. Cash reserves are strong.
With the new mid-year financial reports, and the attempt to get more folks thinking about the city budget, we relay his comments here. And while the news is good certainly better than the alternative of excess spending or low revenue its not quite as unusual as it might appear.
As Eells explained to us, the apparent surplus is a fairly common feature of government, and especially of Bainbridge Island government. Its a matter of budgeting revenue conservatively.
We always have some money that comes in from a source we dont expect, he said, but I dont count that.
On the spending side, the city can only spend money authorized by the council and for the specific authorized purpose shifting from one use to another isnt allowed.
As a result, Eells said, theres a tendency to overbudget in the same way that airlines overbook. Departments tend to budget for more than they can actually do, knowing that for whatever reason, they wont get to everything during the year. Since experience shows that some projects will fall through for a variety of reasons, a government agency that fails to overbudget will end up with idle time.
There are storm clouds on the horizon. Bainbridge may finally be feeling the effects of the national recession, which it has so far avoided, Eells said. One indication the citys share of the real estate excise tax imposed on property sales is almost 9 percent under budget.
The year 2003 will be particularly tight financially, he added. Employee salaries will rise some $250,000 under terms of the current labor agreement. Substantial increases in health-care and liability insurance are in the works. And some revenue received in 2002 back payments of the cable TV franchise tax and almost $300,000 in state funds wont be repeated.
Overall, Eells says, were in pretty decent shape. The growth of city programs will slow, but the city wont be laying anybody off. And theres an ace in the hole the demonstrated willingness of Bainbridge voters to approve spending measures, which offers at least the potential of freedom from initiative-imposed fiscal straightjackets.
We think a pause in city growth perhaps even the need to go before the voters may be healthy. We always hear a fair share of grumbling on the street about the size of city government. And while, like its predecessors, this council seems genuinely interested in saving money (mostly on capital projects), it wants to implement policies on all manner of things, which also takes personnel, time and money.
We could all do worse than pausing to catch our breath.