The city is hitting most targets for its new slimmed down budget, but officials are casting a cautious eye forward amid a still sluggish economy, Tacoma’s finance director and city manager told the city council this week.
In his first quarterly report to the council on the 2011-12 general fund budget, Biles noted actual revenues taken in so far are about $466,000 below projections for the city’s $399 million budget. But, the city so far has spent $750,000 less than expected, Biles added.
Meantime, the city has more than $13 million in unreserved fund balances on hand – 6.8 percent of the two-year budget’s overall anticipated spending, Biles said. That’s well within a city policy objective to keep such reserves from five to 15 percent of total projected expenditures.
The current budget situation is far different than two years ago, when the recession hit and Tacoma faced up to $31 million in shortfalls under a then much beefier $441 million budget.
But “we’re a long way from being out of the woods,” City Manager Eric Anderson said.
During city budgeting late last year, Anderson and the council carved $42 million from the general fund budget, largely by cutting 79 vacant positions and leaving another 54 open jobs unfilled. Anderson also pitched a controversial plan, later supported by council, to freeze wages citywide. But at least part of that plan was scrapped earlier this year.
Of the 1,296 employees covered by the general fund, 636 are now part of the general wage freeze, city spokesman Rob McNair-Huff said. The city is still trying to negotiate wage freezes with bargaining units representing about 660 workers, he added.
But, the city has since reinstated regular step increases and paid time off cash-outs – both of which the adopted budget had assumed would be frozen, Biles said. In all, the city projects those costs will be about $1.5 million over two years, Biles said.
The city will now seek to fill that hole by leaving even more vacant city positions unfilled, Biles said. The target is to keep about 76 openings per month on top of spots already eliminated or frozen, he said.
Councilman Jake Fey raised two areas of concern: Spending by the city’s fire and police departments so far has outpaced projections – police by about $392,000; fire by about $632,000. The police department was also nearly $2.2 million in the red when the city closed its books on the 2009-2010 budget.
“What’s the plan there to get them in balance?” Fey asked.
Biles and Anderson responded that the city has negotiated a new jail contract with Pierce County that should stabilize fluctuating jail costs, which amounted to about half of the police department’s overspending in the last budget.
Fire’s spending troubles appear personnel related, they added. That department has saved about $873,000 from leaving vacant jobs open, “but the overtime costs were almost $600,000 over what was budgeted,” Biles said.
“With fire, we’re going to look at vacancies and some of the other charges they have more closely,” Anderson said.