A San Francisco accountant hired by Tacoma’s police union to review the city’s finances has concluded Tacoma may have surpluses in other funds that could help ease a general fund budget shortfall that has led to calls for more than 100 public safety layoffs and other cuts.
“The General Fund and its major tax revenues are in decline, but several internal service funds may have excess moneys that can be transferred back to the General Fund,” the analysis found.
The union’s review, conducted by certified public accountant Timothy Reilly of Bachecki, Crom & Co., LLP, also took issue with the method the city uses to help its make budget projections, and it noted the city employs a conservative budgeting approach that tends to overstate deficits.
“My take-away is that there is a (budget) problem, but it’s not as big as the city says it is,” said Terry Krause, president of Tacoma Police Union Local 6. “We’re willing to do our part to mitigate the (budget) impacts, but it’s still the goal of the union not to lay anyone off.”
City Finance Director Bob Biles said Friday he had so far read only part of the report. But he noted its findings are largely based on information gleaned from high-level public reports, known as CAFRs.
“It doesn’t get down into the specific details that some of our (internal) reports would provide,” said Biles, adding the union didn’t ask for, nor did the city supply, more detailed data for the review.
Biles added the city already has tapped some of the internal service funds cited in the union’s report to help deal with budget problems. Nonetheless, Biles said his staff will review the funds again and prepare a report on their status for the City Council.
“We’ll pull that together and let them see the actions we’ve already taken and whether any other moneys in those funds may be available,” he said.
The union’s review is now being used by police union officials during ongoing negotiations with the city. The News Tribune obtained a copy of the 93-page report last week through a public records request.
Facing proposed layoffs of 60 police employees and deep cuts to the police department, police union officials called for the outside review after questioning city forecasts of a $31 million shortfall in the 2011-12 general fund budget.
Based on those projections, interim City Manager Rey Arellano last month proposed 167 layoffs, including 100 to police and fire jobs.
At request of public safety unions, the council later agreed to postpone all public safety layoffs up to Feb. 6, while the city negotiates possible union concessions to reduce job cuts. Meantime, layoffs proposed for other non-public safety positions took place as scheduled on Friday. Fourteen employees lost jobs entirely, while an undisclosed number of others were demoted or transferred into other positions.
The stated purpose for the union’s review was to “identify funds … that might be available for General Fund purposes.” The accounting firm, which specializes in analyses used in public union contract negotiations, evaluated financial data for the past three city budgets, but did not attempt to gauge whether the current projections are accurate.
The report agreed that, based an actual $16.1 million operating deficit through the third quarter of last year, the city’s general fund “will have a deficit in 2011, but we are unable to determine the amount.”
The review also found the city uses a “mostly conservative” process that tends to budget for deficits that later come in less than planned. And, it took issue with the method the city uses to report its end-of-year actual-to-budget financial statements.
After the first year of its two-year budget, the city compares its actual results from year one to its entire two-year plan, rather than only to the adopted budget’s first year. The city uses the comparison to help make budget projections. The union’s accountant called the method an “apples to oranges” comparison.
“We believe this presentation is unusual,” the report stated. “In preparing over 400 analyses for 148 governments, this is the first time we have seen the budget to actual statements prepared this way.”
Biles said the method used by the city is the same used by other governments that operate under biennial budgets, including the state of Washington. A state budget office spokesman was unable to reach analysts to confirm that at press time Friday.
A separate review of the city’s budget, called for last month by the council, is expected to be presented Tuesday. That review, to be conducted by Hubert Research of Bellevue at a cost of up to $10,000, will focus on city budget projections for 2012 through 2014.
Lewis Kamb: 253-597-8542
lewis.kamb@thenewstribune.com
blog.thenewstribune.com/politics
Twitter: @lewiskamb
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