The 2005/2006 budget adjustment was passed last Monday by Lakewood City Council 7-0. It balances 2006 operating revenues with operating expenditures and reduces the 25% General Fund reserve to 20% (8% – 12% is typical elsewhere) by shifting funds to the new police station. Thanks to higher revenues and cost saving measures, this biennial budget is on track without deficit spending. However there are several issues discussed below that we agreed to disagree upon and take up once the new Council is seated in 2006. All require the Council to make some important policy decisions.
The Parks and Recreation Department recommended taking over maintenance of Fort Steilacoom Park from Pierce County as a cost saving measure. Lakewood currently pays for half the maintenance costs and Pierce County is supposedly planning to raise those costs to about $600K annually ($300K Lakewood’s share) although Council never saw the actual numbers. A new Lakewood maintenance capability would also have considerable costs: $420K annually for labor and materials and $340Kfor equipment (50% reimbursement by Pierce County); and $375K to rehabilitate a barn and add additional improvements. Council should investigate other options such as private contracting and equipment leasing for all or some of these items, and scaling back the size and scope of a new maintenance facility. Until we have that information, Council can’t make informed policy and priority decisions.
Wages and benefits are significant portions of our budget. As a Lakewood businessman, I have long suspected there is a significant disparity between public sector and private sector compensation. Generous public sector wages and benefits are often rationalized because “we want to retain good people”, “we don’t want to lose employees to other municipalities”, “it shows respect for the job our people do”, “we are only average when compared to like sized cities”. There is never-the-less a nagging doubt whether Lakewood can afford such a disparity. Case in point. The three new full time park maintenance workers proposed for Fort Steilacoom Park will spend over 37% of their time picking up trash. The remainder of their time is spent on low-skill tasks such as leaf blowing; athletic field preparation; mowing; etc. Yet their proposed annual compensation is $59,000 ($37,000 salary and $22,000 benefits)! Perhaps you can see why I am skeptical.
The City utility tax is currently levied on electric, gas, garbage, cable and telephone as a percentage of the entire bill. These utility taxes amount to about $3M annually. When utility rates rise so does the utility tax collected. Gas utility rates especially are expected to jump between 15% and 30% this winter. This will result in a utility tax “windfall” of about $580K during 2005/2006. I support tax relief to offset this windfall and keep gas utility tax revenue flat. The City has a very limited and seldom used program for providing $30.00 annually in utility bill relief to the elderly and poor. Instead I support an across the board cut in the gas utility tax rate to give everyone a break from inflated gas utility taxes. We have to get moving on this: it’s mid-winter when people need the help most.
Lakewood has Human Services and Community Development Block Grant (CDBG) programs that spend $311,000 annually to support Lakewood’s Promise and other community social services programs. The question is how to most effectively use and manage these assets. Should they be parceled out among many small organizations or given as larger grants to a few major community service organizations? For instance, current awards were typically around $5000 (median) to 38 different agencies, many of which seemingly overlap in scope and all of which require management overhead from Lakewood’s staff and the recipient organization. In comparison, Council also approved $150,000 for the Boys and Girls Club (1/3 each from Human Resources; CDBG; General Fund) to support a center in Lakewood. This represents an economy of scale and leverages significant private funding potential beyond Lakewood’s contribution. Which model is more effective or is it a combination the two? We’ll have to find out.
Council’s last meeting this year will be this Monday, 12 December 2005. Our first meeting next year will be Tuesday 3 January 2006 when the three newly elected Council members will be sworn in and a new Mayor and Deputy Mayor elected by the new Council. I’m sure that the election of Council’s leadership will be an interesting process! Let’s see what the Council learned from the last election and how that is reflected in new leadership and council procedures. What are your preferences for a new Mayor and Deputy Mayor? I’d like to hear from you.
Signed, John Arbeeny