Facing $27M deficit, Tacoma plans departments merger, position eliminations
As the city of Tacoma faces a $27 million deficit, city leaders are gearing up to merge certain departments and eliminate unfilled positions.
In a presentation to the City Council on May 12, newly-appointed City Manager Hyun Kim outlined his “roadmap to recovery” for the city’s ongoing budget problems. The city budgets on a biennial basis – once every two years – and Kim said the city has faced budget deficits for the “better half” of the last six biennia.
The deficit that the city’s $635 million general fund faces is a structural one — one that can’t be addressed by a one-time infusion of cash. The city’s expenses continue to grow twice as fast as its revenues, Kim told the council. It’s the result of inflation, aging infrastructure and rising healthcare costs, he said.
The city already implemented a hiring freeze to combat the problem but now plans to merge the city’s Environmental Services and Public Works departments. Kurtis Kingsolver, who returned from retirement to temporarily run the Public Works department, will leave the position and the city will eliminate it – not a layoff but a position elimination, spokesperson Maria Lee said. The city will also eliminate a deputy city manager position, Kim said.
Kim said it’s possible that the city could implement more cuts in the future that would result in layoffs.
But “my keen focus is not to do a reduction in force,” Kim said.
Kim said he instructed police, fire and courts to reduce their expenses by 5% and instructed all other city departments to make 10% worth of reductions. The city also has made efforts to improve staffing levels at the Tacoma Police Department, which will allow the agency to run with fewer overtime costs, Kim said. The council in September approved an incentive program that would give experienced, Washington-based police officers a $50,000 signing bonus.
“We can’t cut our way out of this. We can’t tax our way out of this,” Kim said. “It’s got to be a blend and balanced approach.”
The city joins other local agencies that have faced budget deficits recently, including Tacoma Public Schools and Parks Tacoma. But the city’s general fund reserves remain fully funded at about $87.8 million, a good sign that the city will maintain its credit rating – an indication of the city’s creditworthiness.
Lee said that amount consists of $54.9 million in general fund reserves, $16.4 million in emergency reserves and $16.4 million in contingent reserves. Those dollars are intended largely to serve as a resource for Tacoma in the event of “unforeseen emergencies” like natural disasters. Pulling from the city’s general fund reserves would require seven yes votes of the nine council members, she said.
Even during the COVID-19 pandemic, the city didn’t pull from its reserves, Lee said.
“Because our general fund deficit is structural – meaning our baseline expenses are growing faster than our baseline revenues – spending reserve cash would only artificially mask the problem for one year, while entirely depleting the safety net we need for actual emergencies,” Lee wrote to The News Tribune.
