City’s unexpected budget drop will lead to “dramatic cuts”

UPDATED: The city is starting the year with about a third less money than it expected, spurring talk of substantial cuts to nearly every part of city government.

“There’s going to be dramatic cuts,” city Finance Director Elray Konkel said. “Nothing’s sacred. Not staff. Not community services.”

The city had predicted late last year that the city would start 2009 with $3.3 million. But the downward spiral of city revenues has only quickened, leaving the city with just $2.1 million to work with at the start of January.

In response, the administration is planning to slash about 15 percent of the operations budget, which funds staff and most city services.

“We’re looking at everything, and changing the way we do business,” Konkel said.

The City Council promised fast action to cut costs.

“We need to go to work immediately to affect the 2009 budget,” Councilman Barry Peters said. “We need to catch up – now.”

Councilwoman Debbie Vancil said the city is facing “dire circumstances” that necessitate “drastic measures.”

“If we have a train that’s going down the wrong track, I’d like to stop it, not slow it down,” she said.

The city administration is in talks this week with the employees’ union about possible layoffs.

“I don’t wish to say (layoffs are) inevitable,” Konkel said. “But every option needs to be on the table.”

The layoffs would come shortly after the city reduced the number of staff positions by 10 percent and brokered a 10-day unpaid furlough for most employees.

Konkel said he takes responsibility for the finance department’s inaccurate estimates.

City revenues, he added, are plummeting at a record pace.

“My God, it’s dropping like nothing I’ve ever seen,” he said.

Revenues related to building and development have taken a particularly steep tumble.

Projected to earn the city about $2 million in 2009, income from building permits, planning reviews and other development-related funding sources drew in just $30,000 last month, leading Konkel to speculate that the city may draw in far less than the city hoped for.

Compared to other cities, Bainbridge depends disproportionately on revenues related to the housing industry.

“Year-end home sales fell off a cliff,” Peters said.

Median home prices dropped about $100,000 over the last year, according to Windermere Real Estate. The number of homes sold on the island has sunk from 468 in 2004 to 188 in 2008.

When the housing market tanks, so too does Bainbridge’s finances, Konkel said. The island doesn’t have large-scale retailers or industry to diversify the city’s tax base.

“People aren’t buying homes or building homes,” Konkel said. “On Bainbridge, real estate and building has been our mainstay for years. We really depend on it.”

3 thoughts on “City’s unexpected budget drop will lead to “dramatic cuts”

  1. We can only blame ourselves for this mess. The Mayor did such a wonderful job in convincing the populace that she was not the problem it was the Council that we elected last time around replacement Council people that are far worse, all have hearing problems as they don’t seem to hear what the taxpayers are asking be done, don’t read as the downturn has been fully forecast, and more. We have four Council people who under the direction of the Mayor are leading the City to absolute ruins. What is required is an “Attila the Hun”.

  2. Please don’t lump Councilperson Kim Brackett into that mess. She was elected in 2007 and she has been an invaluable addition to the council. Sadly she is part of the current minority. Of the four who are walking in lock step with the Mayor, two were sitting members in 2007 and two were newly elected (both unopposed by the way).

  3. Kim Brackett is not one of the fabulous 4. She listens and has a good head on her shoulders. The four who need to be booted ar SNOW, KJELL,FRANZ, and PETERS. They all four need hearing aids. Think about the recent bonding for Winslow Way- Should we be paying from the lessening tax dollars coming in interest for a beautification project of any magnitude?

    Facing reality is something these four need help with. The economy is in the toilet, BI revenues are in the toilet, people are loosing their jobs and we are told the City budget is to be cut but NOT Winslow Way because this is a bonding. WOW

Comments are closed.