Mayor announces further city budget reductions on the horizon

Posted: January 15, 2009 15:34:28 PST

Bellingham Mayor Dan Pike announced today he is taking further steps this week to address declining city revenues in light of local and nationwide economic difficulties. Pike said revenues in most areas are continuing a downward trend, as anticipated late in 2008.

Updated revenue figures recently were presented to the Bellingham City Council, including the message that most revenues, such as those generated by development permit fees, real estate sales and other sales taxes, are coming in even below the conservative projections upon which the 2009 adopted budget was based.

A vivid example is the City's development services fund, which receives revenues from commercial development and homebuilding permits. Originally projected to raise $2.6 million in revenue for 2009, this fund is now projected to generate $1.8 million.

"These shortfalls leaves us with no choice but to make some very difficult decisions," Pike said. "We are doing everything we can to maintain quality public services and protect people's jobs while ensuring financial stability. The proactive steps we took in 2008 are softening the effects of these declining revenues. Unfortunately, as we forewarned the Council may be the case, this is not proving to be enough. We are watching carefully and looking at various ways to manage the situation."

Pike said City department directors have been asked to prepare scenarios describing the impacts of additional 3% and 5% reductions. In the coming days and weeks, he will review and consider making some of those cuts, only taking what is needed to keep the budget balanced.

"My executive team members understand their business needs and will work within the resources available," he said. "I expect to see recommendations of further project delays, purchasing cuts and reductions to hours of operation and services."

Pike said he is still gathering and reviewing recommendations from individual departments, and will work closely with the Bellingham City Council on further budget reductions. Examples of proposed reductions submitted by departments so far include:

Further delays in street maintenance, including delaying replacement of aging traffic signals and delaying sidewalk and street repairs.
Postponing playground equipment replacements, such as the planned replacement and updating of the Maritime Heritage Park playground.
Reducing contracts with service-providing agencies and vendors, such as those providing economic development, planning and animal control services.
Reducing funding for honor guard, technical rescue, neighborhood crime teams and other special public safety programs.
Reducing the waterfront redevelopment budget.
The Bellingham Public Library Board of Trustees, at a special meeting Jan. 8, voted to recommend reducing the budget for new books and other materials by $108,000 as a first step to avoid impacting staff, said Library Director Pam Kiesner. She said the Board determined that if the library is asked to make even further reductions, hours of operation will be reduced.

"Bellingham library cardholders checked out 18.5 items per capita in 2008," Kiesner said. "A significant cut to the materials budget like this will have a negative impact on people's ability to find what they want, when they want it at the library. However, this is still preferable to staff reductions, which would come at a time when the library is experiencing a 9% increase in use over last year."

Pike said efforts taken in 2008, such as not filling most vacant positions when people resign or retire, have helped prevent staff reductions. "But with each increment of declining revenue and further cuts, it becomes more difficult to avoid layoffs."

He added that he has received a number of unsolicited offers from employees to help improve the bottom line by taking voluntary leaves without pay or forgoing salary increases. He said those options will be considered on case-by-case basis.

"City employees care about the services they provide to the public, and they care about each other," he said. "Many of our employees are ready and willing to shoulder part of the burden to help each other and their community. While I welcome their commitment, I also want them to know they serve their community simply by coming to work each day. This dedication is among the many qualities that makes the City of Bellingham known for its good people and top-quality services."

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Media Contact:
Mayor Dan Pike or David Webster, Chief Administrative Officer
(360) 778-8100