LYNNWOOD — City Council members had better assume a worst-case scenario when they consider ways to rein-in the city’s latest budget shortfall.
That’s one message a finance expert delivered April 5 before a council brainstorming session on the budget.
Steven G. Miller, hired late last month for $10,000, spent less than a week reviewing the city’s 2009-10 budget. He said the council should prepare for the possibility that the city faces a $4.8 million shortfall for the two-year budget that ends this December.
“My conclusion is that you were wise to focus on the worst-case scenario,” Miller told the council. “I would be worried about the best-case scenario; I think it carries risk.”
At its worst, the city could be behind by $4.8 million. At best, the city could actually be in the black by $3.1 millon. City staff said a more likely possibility is that the city be nearly $850,000 in the hole if something isn’t done.
In a March 12 memo to the council, Mayor Don Gough recommended plugging the $4.8 million worst-case hole by transferring $3.2 million of various funds into the general operating fund, cutting department budgets and holding off on other planned spending.
Miller said that plan could work as long as money borrowed from specific funds is repaid and that long-term changes to the budget are carried out.
Last year, Lynnwood made across-the-board cuts after watching sales tax income drop drastically.
Tensions on the council increased earlier this year after the council learned last year’s cuts weren’t enough to stem continued end-of-year drops in income.
Finance director John Moir resigned March 22 following one such heated discussion.
Last week, Council President Ted Hikel sent a letter addressed “To the City Family” where he urged employees to stop speculating on the city’s finances.
“I view the employees of the city, including the council and mayor, as family,” Hikel wrote. “Healthy families talk to each other. Healthy families don’t rely on gossip or rumors.”
He wrote the council will find ways through its financial woes.
After Miller’s presentation on Monday, council members gave their ideas for saving $4.8 million. Their recommendations ranged from increases in utility taxes, to hiring freezes, department cuts and layoffs.
Councilman Jim Smith said the council should review spending mistakes from 2008 and 2009. He recommended holding off on tax increases and proposed cutting several staff positions, including a Parks and Recreation Department manager, four or five aquatics jobs and Gough’s assistant city administrator, who was hired early this year.
“It’s outrageous that the council should be put in this position,” he said.
Oscar Halpert writes for the Herald of Everett.
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