(The Center Square) – With spending in the red, city finance officials requested a bailout from the Spokane City Council on Tuesday as fire department overtime and employee claims continue to go over budget.
If approved, it wouldn’t be the first time that the city has had to pull from the general fund or reserves this year. The officials already backfilled several accounts a few weeks ago with existing fund balances and also relied on the general fund to prevent another account that pays for the jail from going insolvent.
Spokane also faces a $13 million general fund shortfall that the council must balance before Jan. 1.
Any additional one-time transfers from the general fund will only exacerbate their budget woes, so city staff are looking under every couch cushion for cash. Budget staff say the Employee Benefits Fund still has enough in reserves to get through the end of 2025, but fire overtime is a little more complicated.
“Finding a solution was a bit elusive this year,” Budget Director Jessica Stratton told the council during a special committee meeting. “Funds we normally look at to help ameliorate the situation, general fund, criminal justice assistance fund, ARPA, public safety personnel fund, they’re not in a position to help.”
The Spokane Fire Department has faced issues with its overtime budget for years. SFD exceeded that budget by roughly 22% last year, and Stratton said Tuesday that fire overtime is currently $2.2 million in the red so far this year. Despite prior challenges, the city only budgeted $3.2 million for 2025-2026.
She said the options for covering overtime are now limited to the Pension Contributions Fund, which is a pass-through to the general fund. Essentially, the city deposits tax revenue there to cover pension needs, but a “spreadsheet error” that city staff have since corrected resulted in a $2.6 million fund balance.
Councilmember Michael Cathcart wanted to allocate more funding toward fire overtime last November when the city was balancing another $25 million deficit, but it fell on deaf ears. The council and Mayor Lisa Brown are now dealing with the issue again as city spending continues to exceed available means.
“I want a lean budget, too, but it’s also got to be accurate because we’ve had lean budgets in the past, which is just underfunding things,” Cathcart said during budget negotiations last November. “So I want to make sure that we’re appropriately funding so that next October when we have to do this again, we’re not making giant cuts that we should have been making now to accommodate those things.”
He and Council President Betsy Wilkerson raised concerns about subverting the Firefighters’ Pension Board. Stratton said this doesn’t technically require that board’s approval, but Cathcart reiterated his worries after they also pulled $2 million from this account last year to cover SFD capital expenses.
Wilkerson said she sits on the board and had no idea the fund balance existed. Cathcart compared the situation to “robbing Peter to pay Paul” and referenced his remarks from last November. He wants to see a sustainable plan for funding overtime that does not rely on one-time transfers moving forward.
Chief Financial Officer Matt Boston said he would return after Brown proposes her budget next week.
“I will tell you that the administration is … increasing fire overtime substantially [compared to] what it was budgeted in 2026,” Boston said. “I’ve said this numerous times, but there were operational levers that theoretically could have been pulled with all of the bargaining that was happening.”
He said that relying on these existing fund balances instead of general fund reserves is a win from his point of view. This extends to the Employee Benefits Fund as well, which City Administrator Alex Scott said currently has about $9 million in reserves they want to draw on to cover a rapid increase in costs.
Rather than poor budgeting, he attributed this to a few employees who require expensive medication.
Scott said these prescriptions don’t have generic options, so there’s not much they can do to mitigate costs other than raising premiums paid into the fund. He and Boston asked the council to backfill $8 million from the existing fund balance to keep the benefits account afloat through the end of the year.
They said the city and its employees will both contribute to a 25% increase in premiums next year to help rebuild the reserves. Councilmember Paul Dillon pointed the blame at “greedy” insurance providers.
“I will just tell you, my mother has [multiple sclerosis], she has an injectable shot,” Boston said. “That shot is $75,000 per month. You extrapolate that times the entire year, and that is what is keeping her alive.”
The council will vote on whether to allow the city to backfill these accounts in the coming weeks.
