What Puyallup’s ‘hold-the-line’ budget means for departments, city services
This story has been updated.
Puyallup has approved a two-year $245.2 million budget with nominal changes to brace for the unknown financial repercussions of the coronavirus pandemic to city coffers.
City Council passed the budget unanimously on Tuesday evening.
“The preliminary biennial budget is a hold-the-line budget while maintaining essential and core services important to our customers,” city manager Steve Kirkelie said in the letter to City Council members.
In the city’s first biennial budget, finance director Barbara Lopez said combining budgets for 2021 and 2022 allow for longer term planning.
Lopez said the city has been very conservative in estimating the impacts on revenue collections and what that might mean for available spending and delivery of services.
“That approach enables us to plan for a worst-case scenario, with the possibility of better-than-expected results,” she said in an email. “If results are better-than-expected, it allows us to prioritize spending and potentially add back items that were placed on hold.”
For 2021, the city is forecasting an estimated 8 percent reduction in sales tax revenues.
Budget overview
The budget didn’t see many changes but has prioritized public safety and public works.
Of the $102 million in the general fund, $45 million is allocated to public safety for the two years. Parks and Recreation has the second largest department allocation with $12.6 million.
Investment in sewer and treatment plants, street projects and stormwater projects will cost about $22.3 million.
The city is still creating new positions.
It has budgeted to add 3.75 full-time positions in 2021 and 2022.
Next year, the current case manager for the successful rehabilitative court will be fully funded by the city. For the program’s inaugural year in 2019-2020, a federal grant covered three-fourths of the case manager’s salary. The grant has expired, but the city’s budget includes a $81,600 allocation to fully fund the case manager position.
One staffer will be added in for seasonal work to man the three turfed fields at the Puyallup Valley Sports Complex.
In 2022, a court clerk and attorney will be added to handle the growing case load at Municipal Court, Kirkelie said in his letter. A maintenance worker will be added to the Woodbine Cemetery to maintain the grounds.
Cost of COVID-19
Puyallup relies more on sales tax than many cities in Pierce County, largely due to the car dealerships on River Road and the South Hill Mall. Lopez told The News Tribune in July she was concerned about the hit.
While property taxes were paid in full by Puyallup property owners, sales taxes, which account for nearly half of all revenues, are expected to fall between 5 to 7 percent, or up to $3.6 million in 2020.
The loss of the Admission Tax from the Washington State Fair meant $1 million less in revenue, a major hit to the city budget, according to third quarter reports.
Beyond financial impacts, staff and projects saw reductions.
Fifteen employees were furloughed, and the city implemented a hiring freeze for all non-essential positions.
An estimated $3.7 million in street projects have been stalled, and technology and vehicle replacements were eliminated.
The cuts and reductions saved the city $3 million in 2020, the city said in its third quarter report.
By the end of 2020 expenditures are expected to exceed revenues by $2.7 million, but these reductions offset the losses, according to third quarter reports.
The city still hopes to grow its reserves by the end of 2021 to about $7 million or two months of expenditures, the report said.
This story was originally published November 24, 2020 at 5:00 AM.
