News - Local News

POSTED: Tuesday, Mar. 10, 2009

Bellingham brought in $30 million less than expected in 2008

BELLINGHAM - City officials painted a dire picture for government finances Monday, March 9, announcing that 2008 revenues came in about $30 million below what was projected.

Without long-term changes to how the city deals with expenses, eventually the government will be spending more than it has on hand, City Finance Director John Carter told City Council members during a committee meeting.

"I'd be less than honest with you if I said anything different, that we can't sustain that kind of expenditure growth," Carter told the council.

The information comes two weeks before the council will be asked on March 23 to cut about $2.5 million that has already been "administratively frozen" from the 2009 budget by Mayor Dan Pike's administration.

That cut amounts to about a 2.75 percent reduction, with city officials saying they have a plan, if necessary, to cut up to 5 percent from the general fund. That would include actual layoffs, Chief Administrative Officer David Webster has previously said.

Basically, officially cutting the frozen spending would mean the 2010 budget will be written with a lower general fund base line, from $72 million to about $70 million.

Carter and his finance staff officially closed the books on the 2008 budget on Feb. 24, he said, and were updating council members as to how things went for the year, and what will happen throughout 2009 and beyond.

Bellingham officials have been working since August 2008 to stem the flow from significantly reduced revenues coming into city coffers while also trying to figure out ways to further cut expenses. Some 32 budgeted positions have been slashed from the city's budget, though only five people have been laid off in the city's building permit center. The rest of the position cuts came through vacant positions not being refilled if an employee retired or was transferred to other work.

The city's 2009 budget was created operating on about a $5 million deficit, taking the money from the reserves. The City Council has designated a goal of a 12 percent reserve, and the budget ended below that, at about 10 percent for 2008.

With the cuts that have come in the last six months, the city should meet that goal, with an $8.4 million reserve at the end of 2009, Carter said.

Now, officials are trying to focus on long-term issues, most specifically how to reduce spending. An internal task force, led by Webster and including council members Gene Knutson and Stan Snapp, has been focusing on how to deal with revenues not keeping pace with expenses and increased maintenance costs from the city owning more facilities. It's also looking at legislation, policies and programs from the city, state and federal level that impact how the city does business, Carter said.