By Harry Gatjens
The Edmonds City Council spent three hours working on the proposed 2013 city budget Tuesday night, listening as Finance Director Shawn Hunstock covered about half of the document in his presentation, with the second half to come next Tuesday, Oct. 3o.
Councilmembers were asked to hold back on suggested amendments until after the entire budget had been presented.
Some assumptions included in the overall budget are 2 percent increases in salaries and wages, declining property tax revenues due to lower property values, (this affects the City’s emergency medical services tax receipts) and overall flat revenue growth based on the economy. Mayor Dave Earling had already directed his department heads to slash expenses prior to finalizing the budget draft.
The departments covered Tuesday night were the City Council, Mayor’s Office, City Clerk, City Attorney, Municipal Court, Community Services and Economic Development, Finance and Information Services and Development Services.
Among the specific questions posed by councilmembers: Adrienne Fraley-Monillas asked how to reduce overtime in the City Council budget and Lora Petso questioned the need for a $25,000 council contingency fund.
Petso also asked how much additional property tax revenue could come from new construction. Hunstock estimated that to be $50,000.
The budget as written does not fully fund the Contingency Reserve Fund set up last month. Hunstock said there was not enough surplus to do this without budget adjustments.
It was also noted that almost the entire Risk Management Reserve fund ($661,000) is expected to be depleted next year due to pending litigation that is expected to be resolved. This prompted discussion of how to properly target a balance for this fund.
There were other questions as the councilmembers tried to gain further understanding of the challenges they face.
After next week’s presentation of the remaining departments, councilmembers will have a week to come up with ideas and adjustments to the budget, then present ideas during the following week’s council meeting.
In addition to the budget workshop, the council approved an amendment to the 2012 budget and heard a presentation from Public Works Director Phil Williams on the Lake Ballinger/McAleer Creek watershed forum.
I’d like more details on the pending litigation that was mentioned in this article.
Melissa, It could be the former Assistant to the former Mayor, it could be the former HR director, or it could be the Haines Wharf overrun issues. Just a guess.
They did not mention the specific cases or amounts, and I do not believe they should reveal these estimates as it might hurt their negotiating position. They did mention that there were two employment related cases, but nothing beyond that.
They did say they were going to fully fund the reserve but then they would use all but a little over $1000 to pay claims. I am not quite sure the value of setting up a reserve fund if you are going to use it all up every year. Probably better, just to pay the claims out of the general fund.
The discussion about how to compute the proper level for the fund in the future included getting estimates of potential losses from the city attorney, or making a calculation based upon prior years.
At this point a calculation is not really relevant as there doesn’t seem to be any desire the pull of funds out of the general fund balance.
The risk reserve policy states that this reserve fund should be fully funded by 2014. This two percent is in addition to the already 16 percent reserve we have set aside. We have researched many Cities and their reserve policies and these practices are pretty conservative and consistent. By the way, this is the first time the City has created and approved a reserve policy.
If and when the City moves past a few major lawsuits, we may want to include this percentage in with our general fund reserve bucket. It is all a matter of time and seeing how the events play out.