29 city of Spokane employees told Friday they may be laid off

Twenty-nine Spokane city employees learned Friday that their jobs could be eliminated if the city’s finances aren’t significantly improved in the coming months.

Mayor Lisa Brown’s administration signaled for months that layoffs could be coming as the city grapples with its budget, saying that employees who may be affected would be warned ahead of time.

While some progress has been made to shrink the deficit the city faces as it prepares budgets for the next two years, it was not enough to prevent 29 employees across the city’s workforce from learning that they may not have a job come January.

If all 29 layoffs do end up occurring, the city projects it could save up to $3.4 million, city Chief Financial Officer Matt Boston wrote in a Friday text.

This is not a guarantee that these employees will lose their jobs, nor that more couldn’t be added to their ranks as financial projections become clearer in coming months, Brown stressed in a Friday interview. Negotiations with city unions continue, potentially yielding other cost -saving measures as were agreed to with Spokane’s police and managerial professional unions.

At the beginning of the year, city officials projected they had to plug a roughly $50 million hole that would be left in next year’s budget without major changes, including a roughly $25 million gap in the city’s general fund, the bucket of money that pays for, among other things, the city’s police and fire departments.

This deficit has been driven by many factors, such as the city’s costly investments in the Trent Avenue homeless shelter, a facility that will mostly wind down in October. However, the primary driver has been personnel costs, particularly after the most recent round of union negotiations resulted in agreements that baked in annual compensation increases that outpace tax revenue growth.

That “structural gap,” as city officials refer to it, was temporarily filled by dipping heavily into the city’s depleting savings account and federal COVID-19 relief funds, which run dry at the end of the year. Unable to continue pulling from these resources, the city has largely turned to cost-cutting measures this year to balance the existing budget and will ask voters in November to approve a 0.1% sales tax increase so that funds are available to improve various services, such as reinstating a neighborhood police resource officer program.

The administration has cut roughly $750,000 worth of unfilled positions, offered early retirement incentives to two of its unions, eliminated the city Reprographics Department, which had shrunk from its peak to a current single staff member, and renegotiated contracts with its information technology vendors, for instance.

Those cost-cutting measures have paid some dividends, as has conservative budget forecasting headed into this year. The administration announced earlier this month it now has closer to a $10.5 million hole to fill in the general fund, with higher-than-forecast tax revenues making up around half of that $11 million improvement on its initial budget outlook.