Editorial
City and council need public help in making tough decisions
Published on Tue, Nov 29, 2011 by BY FRED CRUGER | CONTRIBUTING WRITERRead More Editorial
Last Saturday I sat through a City Council workshop covering the 2012 Budget . . . more importantly, it took a look over a five-year horizon to forecast the future as best as possible, given a reasonable set of assumptions about the national economy, over which we have little control. It was by far the most enlightening public meeting I have ever attended, and it made me feel proud to be associated with a community whose elected Council and staff could rationally deal with the financial challenges that are being faced by individuals and communities alike.
The Granite Falls City Council and Mayor, working from well-organized detailed materials provided through the work of city staffers, in large part Public Works Director Brent Kirk and Police Chief Dennis Taylor, maturely “spoke the unspeakable” in trying to deal with what could become a financial crisis for the city, and could in fact threaten the very existence of an incorporated Granite Falls.
The national and state economies have wreaked havoc with the plans of families, companies, and cities. Huge drops in property valuations have decimated city incomes, yet they still must maintain essential services like water, sewer, police protection, and maintenance of the local community.
The Granite Falls Council is determined to preserve the benefits we have by having a “city” (rather than becoming simply a piece of unincorporated Snohomish County), and they’ve thus far dealt with the financial challenges as promptly and creatively as possible. But belt-tightening and money pocket-switching can go only so far, and there is not yet relief in sight from a larger economic recovery.
The council has pulled most of the levers it can pull, and city departments have all shared in remarkable cost savings and wage slow-downs.
Kirk and Taylor had the foresight to create a five-year budget projection, assuming little help from the economy at large, but considering various alternatives of movement of money from the “utilities” funds to the city “general” fund and alternative organizational changes in our police department.
The news wasn’t good. Let me attempt to explain the “T”s and “C”s (and I don’t mean “terms and conditions”).
First, the “Ci-TY” - an incorporated city makes sense only if your intent is to muster and focus resources on a specific community and its life-style. If you do not, or cannot, arrange for that, you might as well take advantage of County resources and be averaged in with other unincorporated areas.
Next, the “Responsibili-TY” – the mayor and City Council are responsible to oversee the planning and conduct of City business in a manner that ensures the first “T” (“Ci-TY”), can continue in perpetuity . . . not just 2011 and 2012, but far into the reasonably foreseeable future.
Next, the “Urgen-CY” – the City “general” fund started 2011 with a balance of about $100,000, but is projected to end 2011 with a balance under $6,000. That trend cannot be allowed to continue or we’ll be out-of-business as a City. This fact alone sounds like the problem is insurmountable, but don’t worry, it is solvable with community support for the tough choices the Council and staff face.
Next, the “Humani-TY” – our City is among the best when it comes to rates for sewer and water, and the Council will do everything to maintain that ranking, because they realize that raising rates when times are tough hit the lowest-income folks the hardest.
Next, the “Flexibili-TY” - several years ago, as the crisis built, the City recognized that most citizens don’t accept that a city cannot show much the same flexibility that we as individuals show in our personal financial management.
If your family is hungry, and you’ve spent your monthly food budget, but you budgeted money for car or home expenses that has gone unspent . . . you buy food with your “gas” money . . . of course!
Well, the City has done the same thing, to help weather the storm. They used a “utility tax” to move cash from money being set aside for water and sewer improvements, to the “general” fund.
You can think of it as “changing pockets” —a very reasonable short-term decision on both a personal and a community basis. This tax was invisible to citizens in reality, because it didn’t show up as an extra tax on their utility bills (that’s a good thing), but it did prevent the utility fund from building as much reserve as it needs to take care of planned and unplanned equipment and system maintenance.
So, the “Longevi-TY” of this benefit is limited. Think of it as financial “drugs” that provide only temporary relief, because it leaves us exposed to a risk of sewer or water system failures that we simply couldn’t afford to repair. In some way, we have to set a plan that reduces and eliminates this “pocket switching”, even if we can’t go “cold turkey” in 2012. That’s part of the Council responsibili-TY.
So cut to the chase already!
There are many things that cannot be significantly changed, because normal services must continue, albeit with lots of expense-cutting being applied. But there are two large levers that can be pulled, and various combinations of those were tested, to see how they affected our City financial well-being over the next five years.
Please remember, this is the first time (I believe) that the City Council and staff have assembled such a long-term view, rather than simply planning to survive the next year. I cannot emphasize how much credit they deserve for that insight (and for the courage it is taking to address the results).
The utility fund is large, so scenarios were tested that included a continued utility tax at the current rate, a significant raise in the utility tax, and a “cold turkey” halt to the tax. Remember, this is not an “end-user” tax that citizens actually see – it’s simply moving money from the utility fund to the general fund.
The Police Department is a significant portion of total City expenses. Scenarios were tested that showed a continue-as-is, decrease department size by two people (a significant decrease in a small department), and outsource our police services to the County (something done with reasonable success in other Snohomish County cities).
“Budget : a mathematical confirmation of your suspicions.” – AA Latimer
Sure enough, the numbers confirmed that if we continue on our current path, we’ll be insolvent in a couple years and unable to continue, forced to de-incorporate and become just another part of the “Coun-TY”.
Local needs for sidewalks, roads, parks, Boys and Girls Club, etc. would be prioritized with similar requests across the rest of unincorporated Snohomish County. Council and Staff (particularly Brent and Dennis) suspected that all along, and the five year budget projection verified it.
From a purely financial perspective, we could potentially free up about $1.4 million in the next five years if we were to both outsource our Police department to the County and raise the utility tax from 12 percent to 20 percent. It would be $800,000 if we left the utility tax at 12 percent, and about $.3M if we quit “cold-turkey” (but still out-sourced the police department).
Were we to reduce police staffing by two people, the five-year impact would be about $400,000 with a 20 percent utility tax, $300,000 with the current 12 percent utility tax, and less than breakeven were we to quit cold turkey.
Please understand that the budgets that produced these figures had ZERO dollars in them for park improvements, Boys and Girls Club, etc. So the figures you see above are the amounts of money we would have to focus on improving the life-style of Granite Falls citizens. That’s the only reason to have a City! Anything less than zero means nothing gets improved. Anything close to zero says we taking a fair risk; the actual answer might be zero when the time comes (no one can predict perfectly).
So our Mayor and Council face some tough choices, and they need to hear from you about which way to go . . . not about do we want a Boys and Girls Club, or better street lighting, or improved park facilities . . . but about the incredibly difficult decision of what to do with our Police services and how much risk to take with our utility funds (i.e. how quickly to wean ourselves from that “drug” money?). Questions of city improvements are moot if we do not deal firmly with the issue at hand.
Both Kirk and Taylor are to be commended on the effort and care they put into the analysis, and for their courage in describing alternatives that have major impacts on their organizations and their personal situations.
I said when I started that I was proud to be associated with a community that could have such discussions openly, without rancor. Please help your Council to make a firm decision, to avoid wavering in the face of emotional pressures that anyone would feel, and to emerge with a plan that again allows us to discuss the priorities of spending money we have, rather than failing as a City because of spending money we don’t have.
“My problem lies in reconciling my gross habits with my net income” – Errol Flynn
The Granite Falls City Council and Mayor, working from well-organized detailed materials provided through the work of city staffers, in large part Public Works Director Brent Kirk and Police Chief Dennis Taylor, maturely “spoke the unspeakable” in trying to deal with what could become a financial crisis for the city, and could in fact threaten the very existence of an incorporated Granite Falls.
The national and state economies have wreaked havoc with the plans of families, companies, and cities. Huge drops in property valuations have decimated city incomes, yet they still must maintain essential services like water, sewer, police protection, and maintenance of the local community.
The Granite Falls Council is determined to preserve the benefits we have by having a “city” (rather than becoming simply a piece of unincorporated Snohomish County), and they’ve thus far dealt with the financial challenges as promptly and creatively as possible. But belt-tightening and money pocket-switching can go only so far, and there is not yet relief in sight from a larger economic recovery.
The council has pulled most of the levers it can pull, and city departments have all shared in remarkable cost savings and wage slow-downs.
Kirk and Taylor had the foresight to create a five-year budget projection, assuming little help from the economy at large, but considering various alternatives of movement of money from the “utilities” funds to the city “general” fund and alternative organizational changes in our police department.
The news wasn’t good. Let me attempt to explain the “T”s and “C”s (and I don’t mean “terms and conditions”).
First, the “Ci-TY” - an incorporated city makes sense only if your intent is to muster and focus resources on a specific community and its life-style. If you do not, or cannot, arrange for that, you might as well take advantage of County resources and be averaged in with other unincorporated areas.
Next, the “Responsibili-TY” – the mayor and City Council are responsible to oversee the planning and conduct of City business in a manner that ensures the first “T” (“Ci-TY”), can continue in perpetuity . . . not just 2011 and 2012, but far into the reasonably foreseeable future.
Next, the “Urgen-CY” – the City “general” fund started 2011 with a balance of about $100,000, but is projected to end 2011 with a balance under $6,000. That trend cannot be allowed to continue or we’ll be out-of-business as a City. This fact alone sounds like the problem is insurmountable, but don’t worry, it is solvable with community support for the tough choices the Council and staff face.
Next, the “Humani-TY” – our City is among the best when it comes to rates for sewer and water, and the Council will do everything to maintain that ranking, because they realize that raising rates when times are tough hit the lowest-income folks the hardest.
Next, the “Flexibili-TY” - several years ago, as the crisis built, the City recognized that most citizens don’t accept that a city cannot show much the same flexibility that we as individuals show in our personal financial management.
If your family is hungry, and you’ve spent your monthly food budget, but you budgeted money for car or home expenses that has gone unspent . . . you buy food with your “gas” money . . . of course!
Well, the City has done the same thing, to help weather the storm. They used a “utility tax” to move cash from money being set aside for water and sewer improvements, to the “general” fund.
You can think of it as “changing pockets” —a very reasonable short-term decision on both a personal and a community basis. This tax was invisible to citizens in reality, because it didn’t show up as an extra tax on their utility bills (that’s a good thing), but it did prevent the utility fund from building as much reserve as it needs to take care of planned and unplanned equipment and system maintenance.
So, the “Longevi-TY” of this benefit is limited. Think of it as financial “drugs” that provide only temporary relief, because it leaves us exposed to a risk of sewer or water system failures that we simply couldn’t afford to repair. In some way, we have to set a plan that reduces and eliminates this “pocket switching”, even if we can’t go “cold turkey” in 2012. That’s part of the Council responsibili-TY.
So cut to the chase already!
There are many things that cannot be significantly changed, because normal services must continue, albeit with lots of expense-cutting being applied. But there are two large levers that can be pulled, and various combinations of those were tested, to see how they affected our City financial well-being over the next five years.
Please remember, this is the first time (I believe) that the City Council and staff have assembled such a long-term view, rather than simply planning to survive the next year. I cannot emphasize how much credit they deserve for that insight (and for the courage it is taking to address the results).
The utility fund is large, so scenarios were tested that included a continued utility tax at the current rate, a significant raise in the utility tax, and a “cold turkey” halt to the tax. Remember, this is not an “end-user” tax that citizens actually see – it’s simply moving money from the utility fund to the general fund.
The Police Department is a significant portion of total City expenses. Scenarios were tested that showed a continue-as-is, decrease department size by two people (a significant decrease in a small department), and outsource our police services to the County (something done with reasonable success in other Snohomish County cities).
“Budget : a mathematical confirmation of your suspicions.” – AA Latimer
Sure enough, the numbers confirmed that if we continue on our current path, we’ll be insolvent in a couple years and unable to continue, forced to de-incorporate and become just another part of the “Coun-TY”.
Local needs for sidewalks, roads, parks, Boys and Girls Club, etc. would be prioritized with similar requests across the rest of unincorporated Snohomish County. Council and Staff (particularly Brent and Dennis) suspected that all along, and the five year budget projection verified it.
From a purely financial perspective, we could potentially free up about $1.4 million in the next five years if we were to both outsource our Police department to the County and raise the utility tax from 12 percent to 20 percent. It would be $800,000 if we left the utility tax at 12 percent, and about $.3M if we quit “cold-turkey” (but still out-sourced the police department).
Were we to reduce police staffing by two people, the five-year impact would be about $400,000 with a 20 percent utility tax, $300,000 with the current 12 percent utility tax, and less than breakeven were we to quit cold turkey.
Please understand that the budgets that produced these figures had ZERO dollars in them for park improvements, Boys and Girls Club, etc. So the figures you see above are the amounts of money we would have to focus on improving the life-style of Granite Falls citizens. That’s the only reason to have a City! Anything less than zero means nothing gets improved. Anything close to zero says we taking a fair risk; the actual answer might be zero when the time comes (no one can predict perfectly).
So our Mayor and Council face some tough choices, and they need to hear from you about which way to go . . . not about do we want a Boys and Girls Club, or better street lighting, or improved park facilities . . . but about the incredibly difficult decision of what to do with our Police services and how much risk to take with our utility funds (i.e. how quickly to wean ourselves from that “drug” money?). Questions of city improvements are moot if we do not deal firmly with the issue at hand.
Both Kirk and Taylor are to be commended on the effort and care they put into the analysis, and for their courage in describing alternatives that have major impacts on their organizations and their personal situations.
I said when I started that I was proud to be associated with a community that could have such discussions openly, without rancor. Please help your Council to make a firm decision, to avoid wavering in the face of emotional pressures that anyone would feel, and to emerge with a plan that again allows us to discuss the priorities of spending money we have, rather than failing as a City because of spending money we don’t have.
“My problem lies in reconciling my gross habits with my net income” – Errol Flynn
