The City of Tacoma’s budget plan for the coming two years just got slimmer, whittled down another $3.5 million Tuesday as City Council members agreed to a hybrid of potential cost-cutting scenarios presented by City Manager Eric Anderson.
That means Anderson’s overall general fund budget proposal for 2011-12 has now fallen below $400 million – nearly $45 million less than the city’s last spending plan approved by the council two years ago.
“We’ve tried to be conservative as we put this together, while still keeping services in tact,” Anderson told council members at a budget workshop early Tuesday.
Last week, the council had asked Anderson to come back with several options to trim his $401 million budget proposal by $3 million to $6 million. The idea was to reduce a discrepancy in dueling budget projections for gross earnings tax revenues expected in the coming two years.
Tacoma Public Utilities officials estimate those revenues, based on power usage and sales, will come in more than $6 million lower than what Anderson’s budget team projects. The discrepancy left council members uneasy with Anderson’s budget, prompting them to ask him for more cuts.
Anderson presented a menu of options Tuesday, with the council settling on a hybrid approach that includes all aspects of an option to reduce the budget by $3 million and part of an option to cut it by $4.5 million.
The approach includes new trims of $200,000 to be taken from city staff’s training and travel budget for the coming two years; a downward adjustment of the city’s burden of health care cost increases to 11.8 percent, from 12.3 percent, for a net savings of $700,000; and reducing by $1 million the amount of contributions into the city’s police and fire pension fund.
In all, those trims total $1.9 million.
Anderson also assumes his budget will include nearly $1.2 million more in revenues than initially anticipated, based on the council’s intention to increase general government utilities rates for some customers, as well as by upwardly adjusting other revenue projections on par with estimates from outside utilities.
Together, those cuts and additions total almost $3.1 million. Still, the council wasn’t satisfied.
Councilman David Boe also questioned Anderson’s
additional revenue adjustments to get him to the $3 million impact mark requested by the council.
“I thought we’d be trimming the tree more, not trimming a little bit and adding Miracle Grow on the other side,” Boe said. “I was actually looking for $3 million in cuts.”
Added Mayor Marilyn Strickland: “I think we need to be a little bit more aggressive with our cuts, to bring them up to $3.5 million,” she said.
Strickland recommended the council also include an additional $500,000 in trims suggested under a different scenario offered by Anderson that would leave five more city positions vacant throughout the next budget cycle.
Already part of his proposed budget, Anderson had proposed eliminating 79 city positions and keeping 49 others vacant for the next two years. The five added positions to be kept vacant would be determined as they come open, Anderson said.
“We would keep 5 … more (positions) vacant as they come open,” he explained. “We don’t create (the vacancies), we would just keep them open.”
Collectively, trims and adjustments agreed to by the council Tuesday will have a total budget impact of $3.6 million.
To the council’s agreement, Anderson also recommended setting aside $500,000 as cash reserves to be used as needed. The money, initially budgeted for the City Council’s contingency fund, could still go into the council’s fund if it isn’t needed elsewhere, Anderson said.
“It’s a way to hedge bets,” he said.
Tuesday’s budget wrangling ends a series of workshops that have taken place over the past several weeks. The council is likely to take final action on Anderson’s budget plan at its regular council meeting on Dec. 7.