The budget, round two!
Last year, the city staff and I spent considerable time presenting information to you regarding the difficult situation we were dealing with to dramatically reduce the budget. We knew we needed to make tough decisions to avoid future and more devastating reductions.
If you will recall, I asked staff to cut 4.5 percent across-the-board from their departmental budgets, which they did. We also negotiated a new health care benefit package, which reduced our costs by $300,000, and did not fill nine staff positions left empty by retirements.
They were all very tough, but needed, decisions that led to a total reduction of about $1.5 million from our General Fund budget. Those reductions, along with an economy that appears to be making a slow but steady recovery, gets us to better, but not great news for next year.
Our new Finance Director, Roger Neumaier (a veteran of 5 1/2 weeks on the job), moved quickly, analyzing the first six months of this year, mixing in current trends, and making use of the vast experience he gained as Finance Director for Snohomish County Government, to forecast some improvement for our short-term financial situation.
The good news is we will not have to make the dramatic cuts of a year ago! In fact, next year we will not have to make any reductions, unless we over-expand our expenditures, which is always the temptation.
Staff, council and I had to make difficult choices to reduce important city programs. If we suddenly re-stock all of the cuts or add a few needed new items, we will be back to where we were when I came into office. Not where we want to be!
CAUTION should be and will be the watchword next year. Should we begin to correct the shabby condition of our streets? Should we address some serious technology issues in our IT Department? Are there a few key positions that need to be brought back? Using these examples, the answer should be yes to all three.
Unfortunately, if we do all three, we will be back to the status of a year ago. And no, as Mr. Neumaier has confirmed, we should not spend down our reserves.
Are there needs we can begin to address? Yes. Will there be many or will everyone's wishes be fulfilled? No.
So once again, CAUTION is the word for 2014.
We need to remember three items contributed to our improved situation: 1) cutting $1.5 million from the current year's budget, 2) a gradual, but slowly improving economic climate and 3) the staff's fiscal tightness with their current year's budget.
As Roger Neumaier reminds us, we are only one major event away from creating the same shortfall we corrected last year.
He is correct when he asserts the principle reason we are in better shape financially is because we made tough decisions and did not go to our reserves for relief.
In the next couple of weeks I will have Mr. Neumaier write a column with more background information and details to give you his view of the Edmonds financial picture.