(The Center Square) – Approaching its self-imposed deadline, the Spokane City Council drafted a list of budget priorities on Monday as the dais grapples with another deficit ahead of next year.
The Spokane Municipal Code requires officials to place a draft of the priorities on an agenda for the Finance & Administration Committee by April every year; however, now weeks past that deadline, the council is racing to meet the next one by approving the list at its July 14 meeting.
Much of the draft focuses on improving the city’s general fund reserves and identifying funding for its labor contracts and retirement system. Meanwhile, Mayor Lisa Brown and Chief Financial Officer Matt Boston are coming up with how to balance a $3.8 million deficit ahead of next year.
If unaddressed, the imbalance could reach $12.6 million by 2026, increasing steadily thereafter.
“Among the budget processes that you amended in March, you included a requirement that the council adopt budget priorities by July,” Council Policy Advisor Chris Wright said. “We’re a little behind that timeline, but we hope with the consideration … on July 14, that you’ll get caught up.”
The draft resolution outlines seven priorities as the council goes through a mid-biennial review.
Last December, the council approved a budget to balance another $25 million deficit and carry city spending through 2026. Mid-biennial reviews are standard practice, but especially important this year given the $3.8 million revenue shortfall the officials must balance before year’s end.
The first priority calls for detailed projections of Spokane’s reserve funds for 2025 and 2026.
Brown warned last year that a pattern of relying on one-time funds and federal relief to balance the budget had drained the city’s reserves. Now, the council wants a clear picture of the current situation with a timeline and strategy for refilling the accounts to the levels required by local law.
The second and third priorities focus on identifying funding for the city’s labor agreements and retirement system. Budget officials told the council in May that personnel expenses have grown by 9.2% annually, nearly three times as fast as the tax revenue that pays for the labor.
Brown also relied on a voluntary retirement program to balance the $25 million deficit last year.
The Spokane Employees’ Retirement System Board sent a letter to the city last month warning that the voluntary retirements increased its unfunded liability. Board Chair James Tieken raised a red flag, calling out Brown for not consulting or informing the SERS Board ahead of time last year.
Tieken says the city must allocate another $679,000 annually for the next three years to fix this.
“The Administration may argue that this is an unprecedented Board action,” Tiken wrote to the council, Brown and her administration. “This action was taken due to the fact that, in every other prior incentivized retirement offering, the Board and SERS represented members were involved in the decision process prior to the inventive being officered.”
The fourth priority calls for a funding strategy to support public safety capital needs and a “new service delivery model for animal control.” The fifth asks for Brown’s plan for funding the Office of the Police Ombuds, and the sixth requests a plan for financing maintenance on city properties.
The last priority hints at plans to downsize staffing where “necessary and appropriate.”
“The city council requests focused discussions at the coming budget sessions on these priorities,” according to the draft, “and commits to working with the administration to finalize and adopt a balanced, realistic mid-biennial 2026 budget no later than December 8, 2025.”
