As mayor of Everett, my goal is very simple: to manage the city’s resources wisely while protecting our community values. I’m taking that mission to heart.
That’s why on March 31, I announced my plan to reduce the city’s spending this year by $3.4 million. By doing so, the city will not spend any more money this year than it brings in. In addition, the reductions now will make the balancing of revenues and expenses in coming years more manageable. I’m pleased that the City Council offered ideas throughout the process that were included in the plan.
On the surface, the task of reducing our expenses by 3.9 percent sounds somewhat simple. After all, the city’s operating budget is about $96.2 million. Further, there is a fund balance. However, the decisions on where to reduce within city government came from in-depth analysis and through much consideration.
Since taking office in November, my staff and I have thoroughly scrubbed the budget. We have found the city would only be able to sustain current spending levels by depleting the fund balance by 2006 and implementing future tax increases. I am sure you’ll agree this would not be acceptable.
Through this plan, we consolidated services that were being duplicated such as our city telephone switchboard. We also tightened our internal operating belt by reducing maintenance and operation expenses in nearly every city department — those are savings that will have the least direct impact to our residents. And, we were able to identify savings through eliminating some city services that are offered elsewhere in our community. Unfortunately, by doing so, we also had to reduce the number of our permanent staff of about 720 by 17 people — a decision that comes with much sadness.
Living within our financial means may take some adjusting. But this will better position us to tend to the needs of our citizens: safety, well-maintained streets and quality water and sewer services as well as the amenities that create Everett’s exceptional quality of life. To continue to protect these priorities, we needed to make reductions in other services, which meant reducing some library operating hours and reducing some of our parks programs.
While many of you have offered praise for my efforts, others have delivered some criticism. While it is true the city has accumulated nearly $25 million in fund balance, it has done so reducing investments in the very underpinnings of our financial framework such as our city’s street overlay fund, our capital improvement project funds and our public safety pension fund, to name a few.
In fact, if each of those had been funded in recent years at the recommended levels, the city’s fund balance would be less than half the current amount. Even so, as we move forward, my administration and the City Council will work together to develop a fund-balance philosophy. And, we must be prepared for the unexpected financial emergencies that occur such as increased jail fees, skyrocketing city employee medical costs, unanticipated legal costs and liability insurance increases.
And the truth of the matter is that my plan to match revenues and expenses without using fund balance is just as much about tomorrow as it is today.
Our analysis shows that even when the economy turns around, the city could no longer afford to operate at current levels and match expenses and revenues. In fact, much of the situation we are facing today exists because voters approved an initiative that lowered the amount of property tax cities and counties can collect. As a result, the city must now do its best to continue to offer quality services while still living within its financial means. That said, the citizens of Everett can rest assured that the city will continue its most vital services at the high quality levels our residents have come to expect.
Prior to making these adjustments, the city would have been faced with a 2005 budget gap of about $9.8 million. As a result of the adjustments, the gap for 2005 has dropped significantly, to about $3.7 million.
Our budget challenges are not unique to Everett. Cities and states across the country are facing some of the worst budgetary challenges in decades. Even right here at home, Snohomish County is facing a $16.5 million budget gap in 2005.
We must be prudent during these difficult financial times. And, we must focus on the most important priorities for our residents. We will do so by continuing to look for new ways to use our city’s resources more wisely. And we must continue make decisions that are investments in our city’s future.
We will begin work immediately to determine the best way to trim our operating expenses for 2005. At the same time, I ask for input from our community to help prioritize our services and make recommendations on how we can reduce our expenses in 2005.
Ray Stephanson is a native of Everett. Before serving as mayor, he worked as a director for Verizon Communications, where he led a start-up venture to provide buried service wire placement and utility locating services in numerous states across the country.
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