With the end of budget season in sight, Tacoma’s City Council early Tuesday asked City Manager Eric Anderson for options to trim his proposed $401 million spending plan by $3 million to $6 million before seeking to approve it.
That means a vote on the city’s 2011-12 general fund budget that had been set for Tuesday’s regular council meeting was postponed to an undetermined date.
During a budget workshop early Tuesday, the council also signaled it likely will approve the Tacoma Power Utilities’ budget as proposed, but might only approve proposed rate hikes a year at a time.
By approving power rate increases for next year only, Mayor Marilyn Strickland said the council can come back next fall “to see what the economy is doing” before deciding whether a second year of rate hikes is necessary.
To balance the city-owned entity’s budget, TPU officials had proposed rate increases for water and power customers that range from an average of 5 percent to 5.7 percent for each of the next two years.
Council members, who are charged with approving the utility agency’s budget and any utility rate increases, likely will propose smaller percentage rate increases for both water and power, Councilman Jake Fey said. The council will have time to decide the issue, as any rate increases for water won’t be set to take effect until February and until April for power.
Meanwhile, the council is required to approve a spending plan both for the city and TPU by year’s end.
Council members said Tuesday that they want to trim Anderson’s general fund proposal as much as possible, to close a gap on disparate projections over “gross earnings tax revenues” garnered from power utilities.
Anderson’s budget staff has projected those revenues to be some $6.6 million higher than what TPU officials estimate. The discrepancy is based largely on different assumptions over how a La Niña weather pattern this winter will impact power use and snowpack.
“We’re not comfortable in having that much of a gap,” Strickland said.
The council directed Anderson to come back with two options, showing how he would trim $3 million and $6 million, respectively, from his proposal. Among other ideas, council members suggested Anderson look closely at employee health care costs and determine what still-undecided vacant positions should be eliminated. They also suggested he stay away from the council’s contingency fund, generally needed for emergency funding situations throughout the budget cycle.
Rather than an individual department or program taking the brunt of the requested cuts, Councilman Ryan Mello said he hopes “we can get to the $3 million or $6 million with what I’d call a nip-and-tuck philosophy.”
Still, whatever Anderson comes up with, the requested trims are sure to cut into services, he said.
“Several of them (budget-cutting scenarios) would impact capacity,” Anderson said. “... I think we do need to be a little careful about disrupting” funding to some departments and programs.
Fey also asked that Anderson provide the council with a detailed breakdown of the $10 million Anderson’s proposal estimates will be saved by freezing employee wages.
Because of the dour economy and hard-hit revenue streams, Anderson’s budget proposal for the coming two years is $40 million less than the $441 million plan approved by the council for 2009-2010. The plan largely depends on eliminating some 79 vacant positions and freezing city wages.
Lewis Kamb: 253-597-8542 firstname.lastname@example.org blog.thenewstribune.com/politics