The City is knee deep in budget preparation for 2010 and like most of the cities around Kent the downturn in the economy has been hard on City revenues. While our revenues have not fallen off the edge of a cliff like some cities we are looking at less property taxes, less permit fees, less state shared taxes, less interest on our investments, and flat income taxes that are hovering around 0% growth. I tell people that when we look at our revenue numbers we are less worse than many – but we are still worse-off heading into 2010 than we were in 2009.
City Council has asked us to develop 2 budget proposals for 2010. The first would be a no-growth proposal (allow up to 1% increase to match inflation) and the second would be a budget that reflects a 2% decrease. Hitting that 2% decrease without impacting our employee numbers is going to be a challenge since roughly 73% of our costs are people/personnel costs. We’ve been watching other cities very closely searching for good ideas on how to navigate the financial troubles and as a result we’ve taken a closer look at things like 4-day work weeks, early retirements, wellness programs, and health insurance.
Over the course of this year we’ve had some modest success in finding savings. Early in the year we shopped our life insurance around and ended up saving $20,000 a year. At the end of 2009 we announced a consolidation of our health plans that should save the City about $30,000 in fixed costs and up to $150,000 in typical claim costs starting in 2010. We saved $6,400 from workmen’s compensation claims by being safer in the workplace. Following a six month internal audit, the City is in the process of centralizing our print and copier functions which we anticipate will save at least $10,000 a year. We refinanced some City debt to take advantage of record low interest rates and we saved $90,000 in annual interest payments. The City street crews have been able to find weather forecasting sources on the internet that will save about $2,000 a year from a weather satellite subscription service. For three years running the City crews have expanded their street duties – taking on more and more work that used to be contracted out. As a result, City crews saved $94,823 in street contractor work in 2009. Cumulatively these savings up add up to nearly $400,000.
These are all great examples of the kind of initiatives that City employees have been engaged in over the last 5 years to contain costs and save money. It looks like we’ll need to rely on that experience as we head into what appears to be another tough budget year in 2010.