The budget, round two!

By Dave Earling, Edmonds Mayor | Jul 25, 2013

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.

Comments (2)
Posted by: john dolan | Jul 26, 2013 09:18

These are the kinds of efficiency steps that need to be taken regardless of the economic situation. Just because you have new revenues coming in doesn't mean you have to spend it. It's always easier to spend someone else's money. In addition to across the board cuts, I'd like to see the City show some courage and prioritize cuts and expenditures. Elected officials always want to take the cowards way out. The kinds of efficiency efforts noted in the Mayor's letter are the kinds of responsibilities we expect from our government everyday, not just when times are tough.



Posted by: Jim Shelton | Jul 27, 2013 08:10

The mayor, staff, and council have done a good job in the last few years tightening the city budget and putting in place some fiscal policies to help ensure the city has reserves to help out in hard times.  However as Mr. Dolan points out it is tempting for them to go back to the "if you get it, spend it" routine that we saw prior to 2008 where city expenditures were going up an average of 7% per year while inflation was about 3% and the 1% cap on property tax increases was firmly in place.  In fact, as reports of improving revenues come in, we've already seen the council undo some of the cuts put in place last year (for example, changing a Parks/Rec Dept part-time employee to full-time, increasing the park irrigation budget, etc.).  Granted, these are small expenditures compared to the overall budget, but it's like a trickle leak from an earthen dam - if it isn't stopped it will only get worse.  Everyone ready for the Park Levy later this year?



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