Spokane mayor announces cost saving measures, less grim budget outlook
The city of Spokane has announced another proposal to cut costs by offering union employees an early retirement incentive, taking another step to close the city’s budget gap that is projected by officials to be $14 million going into next year, an improvement over the $25 million hole elected leaders were peering down in January.
Mayor Lisa Brown’s office has come to an agreement with the city’s Managerial and Professional Association, a union representing more than 300 employees, that offers a lump sum contribution to a tax-free health care reimbursement plan to eligible staff who agree to retire early. The contributions range from $10,000 to $20,000 for employees who have worked with the city for 10 to 20 or more years.
A different retirement incentive was offered earlier this year to a couple of dozen police officers, positions the city plans to fill by hiring new officers lower on the salary schedule, saving approximately $1.2 million headed into next year’s budget.
The city hopes to be able to encourage staff to retire early to avoid or minimize layoffs, which for union employees will largely affect the newest hires. Unlike the police department incentive, which was offered to no more than 25 senior officers, the city is not setting a cap on the number of managerial and professional staff that can theoretically take the incentive, although the mayor’s office and department heads will have to approve applications, city spokesman Erin Hut said.
The City Council also will have to approve the agreement before it is formalized, Hut noted.
The city also announced that Brown’s cabinet officials will each waive cost-of-living adjustments for six months next year, in addition to the two mandatory furlough days this year that were announced. These particular cost-saving measures don’t do much to move the multimillion-dollar needle – the furlough days combined saved an estimated $30,000 – but were intended to show that the city’s top level officials were willing to give up pay to balance the budget as union employees face possible cuts, said Hut, who is a cabinet member.
After the last round of negotiations with all of the city’s unions, the city is spending more money, especially on staff, than it expects to take in each year, which officials refer to as a structural gap.
While that imbalance was temporarily steadied in recent years with federal COVID-19 relief funds, that money runs dry at the end of 2024, leaving Spokane with tough decisions in the months ahead as it prepares the next budget.
At the beginning of the year, city officials projected they had to plug a roughly $50 million hole that would be left in the next year’s budget without major changes, including a roughly $25 million hole in the city’s general fund, the bucket of money that pays for, among other things, the city’s police and fire departments.
The city legally must pass a balanced budget, so if enough cost savings can’t be found before its rapidly approaching deadlines to approve the next budget, layoffs could be inevitable.
Brown has previously told city employees that they will know what layoffs are on the horizon by the end of September.
“… Should it come to a point where we believe layoffs need to be of high consideration, we intend to notify affected employees that their positions could be impacted,” though that decision will not be final until the mayor releases her proposed budget, Hut wrote in a statement.
“The administration fully acknowledges this is an uneasy time for employees, but we intend to be transparent with them about this process,” Hut added.
The administration has cut roughly $750,000 worth of unfilled positions, eliminated the city Reprographics Department, which had shrunk from its peak to a current single staff member, and renegotiated contracts with its IT vendors.
The city also recently eliminated the positions of two communications officials who were not members of a union, including Spokane Police Department spokeswoman Julie Humphreys.
Higher-than-forecast revenues from sales, property and utility taxes also have buoyed the city’s financial projections going into next year, said Chief Financial Officer Matt Boston, making up at least half of the city’s $11 million improvement on its initial budget outlook.
The administration also identified roughly $2 million in other cuts, but is not prepared to publicly announce them until later in the year, Boston said.