The Seattle City Council passed a measure this week aimed at cutting the city's budget in the face of declining revenues and outlined a plan for economic recovery for the city that also provides some relief for small business owners and individuals faced with losing their homes and jobs.

A resolution that officially acknowledges the city's need to make mid-year budget cuts, utilize up to $5 million in city rainy day funds to balance the 2010 budget and identify potential cost savings to be considered by Mayor Greg Nickels during the preparation of the 2010 proposed budget was passed unanimously May 11.

With its passage, the bill calls out public safety and human services and housing as the city's highest funding priorities, but also re-affirms the council's six budget goals that were pre-established for the 2009 budget. Along with the aforementioned, others include transportation, pedestrian safety, environmental stewardship and neighborhood planning.

The bill also specifically recognizes the need for further reductions in 2010. The approved list of possible reductions will be forwarded to the mayor's office for consideration for potential cost savings measures in developing next year's proposed budget. The council will review and ultimately adopt a revised 2010 budget in November.

Council president Richard Conlin said he appreciates the specific suggestions of ways to cut the budget and make the city run more efficiently.

"I hope it's taken very seriously by the executive," said Conlin at the May 11 full council meeting.

The list includes:

1. Reduce or suspend contributions to the Fleets and Facilities Department's Asset Preservation Program, reduce internal rent charges.

2. Increase the "span of control" within some areas of management to reduce internal costs while preserving the financial resources needed to support direct services to the public. Reductions at all levels of management.

3. Reduce the number of vehicles in the city's internal fleet and/or extend the lifespan of existing vehicles.

4. Review fuel purchasing policies, such as bio-diesel.

5. Evaluate the cost-effectiveness of long-term consultant contracts.

6. Review and enhance efficiency of city internal support departments.

7. Review the city's participation in various local, regional and national organizations (associated the membership dues).

8. Review funding provided for staff training and for travel expenses, particularly those held out of state.

There will be minor to no cuts to public safety and human services, said council central staff member Ben Noble.

The full council also passed a resolution (8-1, council member Richard McIver opposed) that outlines an "action plan" for economic recovery in Seattle. Among other elements, the resolution includes a range of strategies to provide relief to small businesses, support individuals affected by the economic recession, set priorities for city services, and achieve operational efficiencies.  

Some of the specific actions include using $5 million in federal stimulus funds to provide temporary assistance to people at risk of losing their housing, and exempting about 1,800 small businesses from paying the business and occupation tax by increasing the revenue floor for paying the tax from $80,000 to $100,000 per year.  

Read the full resolution here.

In April, Nickels announced he would have to cut $13.3 million, or 1.5 percent, from the city's 2009 general fund budget. He cited declining revenue from sales taxes and business and occupation taxes. The city is forecasting a projected gaining of $29.5 million less in revenue in the city's general fund for 2009, compared to last year's estimate. 

The mayor instituted a series of cost-cutting measures in the fourth quarter of 2008, in part due to the national economic recession. The mayor's office reports that even though final revenues were $13 million less than expected for the year, the city finished 2008 with a positive balance of $19 million that has carried over to offset lower revenues this year.

In addition to a drop in general fund revenue, the city is also experiencing a reduction in real estate excise tax (REET) due to the slow-down in commercial and residential real estate sales. 

Last month, Nickels announced plans to defer REET-funded maintenance on some city facilities.  He announced that plans to rebuild or upgrade 14 fire stations would continue as scheduled in 2009, but another nine projects slated to begin in 2010 would be delayed by about a year.

Then, on May 8, Nickels announced his finalized mid-year budget cuts (see attachement). The largest cuts will come from the transportation department (5.4 percent), the department of planning and development (4.19 percent) and the office of housing (3.43 percent).

Departments will begin implementing cuts this month. In anticipation of the 2010 budget deliberations, Nickels said he will continue looking for additional savings in the months ahead.

“These are difficult decisions, but these cuts are prudent and we are able to make them while maintaining our core services for public safety and for people in need,” Nickels said.