Valley’s 2005 budget rosier than ‘06

The Spokane Valley City Council passed its $44 million 2005 budget with little comment and even less discord Tuesday. It was balanced with no major effect on programs, services or staffing levels.

But it was the 2006 budget and beyond that caused heartburn at the meeting.

Imagine a city without an animal control program, allowing dangerous critters to roam free. What would happen to crime in Spokane Valley if the police force went from 100 officers to 13? How about not providing library services to almost 85,000 people? What would the public think if the CenterPlace community center, under construction now thanks to voter-approved bonds, couldn’t open its doors?

These are the decisions the city could face if revenues don’t increase, City Manager Dave Mercier said.

“The reality is the types of choices facing the community are not really, ‘Take one person out of this program, one person out of that,’ ” he said. “We are facing program elimination or suspension.”

Mercier presented an updated six-year financial forecast, which predicts revenues will grow 1 percent each year while expenditures will increase 6 to 8 percent, creating annual deficits of $14.5 million by 2010. The city’s staff first presented the forecast in February and updates it periodically.

Mercier has recommended the council impose a 6 percent utility tax – on stormwater, trash, telephone, gas and electricity – to close the gap. The city already has “stripped the cupboards bare” in terms of cuts it can make, he said.

Mercier shared some new data with the council Tuesday, including that it costs almost $6,860 a year to maintain one mile of road in Spokane Valley. By comparison, that costs Spokane $12,400, Yakima $11,500 and Kent $4,000, he said.

Many Washington cities are facing budget problems as dreadful as Spokane Valley’s. Washington voters approved an initiative in 2001 that limited property tax increases to 1 percent a year. A 1999 initiative slashed the cost of vehicle tabs. Both are sources of funding for cities, and the reductions are starting to make big impacts.

Meanwhile, labor costs are climbing, and the sluggish economy isn’t always providing the sales-tax revenues cities need.

On Tuesday, some council members questioned whether Mercier’s revenue projections were too conservative.

Councilman Richard Munson asked the staff to study cutting five police jobs, reducing the amount of three small reserve funds and increasing the amount that sales-tax receipts are expected to grow each year to 2.8 percent from 1 percent.

Munson also suggested studying taxing all of the utilities suggested by Mercier, except electricity.

That’s because of a unique situation facing Spokane Valley, which has 15 water providers. Some are “municipal corporations” and some are private companies. Some provide electricity. Some don’t.

The city can’t tax municipal corporations because, in the state’s eyes, they are equal entities. If electricity were taxed, some customers would have to pay it while some wouldn’t.

Few citizens commented on the financial forecast at the meeting, but council members said they’re receiving calls and e-mails. They want the feedback to continue, they said.

One resident who did speak Tuesday suggested alternatives to the utility tax, such as cutting police pay, urging people to pay pet-licensing fees and raising the business-registration fee.

“I hope you don’t pass any utility tax on the people of the Valley because you’ll hurt the people,” Tony Lazanis said.