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City budget perspective | Opinion
By Will Maupin
I was the City Council president during 2011 and I would like to give you my perspective on the 2012 budget preparations.
When the council received the proposed budget from Mayor Patty Lent and Financial Director Becky Hasart, it included a lot of layoffs and it included raising utility taxes for city owned utilities (referred to as Payment In Lieu Of Taxes or PILOT) and parking taxes. Neither of those issues were discussed with the council earlier. As we questioned the layoffs, it turned out that some of the positions were charged to “enterprise” funds such as sewer, water and stormwater and therefore did not impact the general fund, which is where we faced a lack of revenue. When we asked, “Why are we laying off people who don’t work for the general fund?” there was silence.
The council struggled trying to make sense of the budget and to make changes while keeping it balanced. At the last minute, we decided to delay the final approval for two weeks and let the administration rework the budget with the changes requested by the council. I sent a letter to the administration after we delayed approval. Most, but not all, of what was requested was incorporated in the final budget.
We did not “balk under pressure” as stated in the Sept. 1 front-page article. We questioned the number of layoffs when we first saw the budget and the administration never gave us an answer as to why people who did not work for the general fund were being laid off. As you could see in the letter, we asked that the number of people being laid off be decreased and that a utility rate study be accomplished as soon as possible to determine the number of people needed and the utility rates needed to support the operation of those utilities. One explanation we heard was that the engineers working on the utility systems are “middle management.”
Of course, that is not true. Engineers are needed to operate, maintain and repair those systems and are charged directly to the projects they work on.
As far as the utility taxes (PILOT) goes, that was not the council’s idea and I voted against raising the tax even though it would have left the budget unbalanced. I believe it is an unfair tax especially because it is a “stealth” tax. People pay for sewer service for example and instead of using that money to maintain and repair the system, the city transfers 20.5 percent of their payment to the general fund to pay for parks, police, etc.
The people don’t feel the pinch now because the utility rates are not raised. Eventually, the utility fund will run out of money and citizens will see a big raise in utility rates. Other Council members voted for the tax increase as proposed by the administration because they had no choice except to look at additional layoffs in the general fund which would mean police, fire and parks.
The administration has refused for the last three years to take a hard look at utility rates to see if the funds are solvent. I think the administration doesn’t want to feel the heat of raising rates, though its much more humane to raise rates now, if needed, instead of delaying the pain and forcing a big raise later. We went through that in the early 2000s when rates had not been raised by the previous administration. When we raised rates, our bond rating went up because we demonstrated a willingness to do the hard work of evaluating and raising rates when needed. A rate study is supposed to be done this year. I would not be surprised to see another delay to avoid raising rates this year because 2013 is a city council election year.
This is history and it won’t change what’s already published. But, maybe it will shed some light on the preparation of the 2013 budget. I hear some of the same themes we heard last year. The budget that the council received last year was poorly prepared and poorly presented to the council. We never heard a single good argument on why the proposal was the best thing for the citizens of Bremerton.