Yakima facing large budget deficit

YAKIMA, Wash. -- A projected budget shortfall of $1.1 million has the city of Yakima looking for ways to trim expenses.

City officials say layoffs are not anticipated at this stage. However, reductions in services such as recreation programs offered by the parks department are on the table.

Mayor Dave Edler is again warning that Fisher Park Golf Course and the city's two surviving pools at Franklin Park and Lions Park could be closed to save money.

"We still don't have enough firemen and we still don't have enough policemen," he says. "Something's got to give."

As recently as October, city officials said the city's finances were in good shape and that no cuts or layoffs were expected in 2009.

But the economy has only gotten worse since then, throwing off revenue forecasts. Over the same period, the state's projected budget deficit grew from $3 billion to nearly $9 billion.

A 4 percent reduction in local sales taxes is at the root of the problem. Sales taxes represent nearly a third of the city's $61 million general fund budget.

If the latest forecast holds, the city will collect $650,000 less than budget writers predicted. And that's assuming the economy doesn't get worse.

The second biggest chunk of the projected deficit is revenue from permits, such as new construction, which are off an anticipated $200,000. Throw in another $150,000 in gas taxes, which are 12 percent off forecast, and you've got yourself a total shortfall approaching seven figures.

Also down by 40 percent are taxes on real estate sales, which aren't technically part of the city's general fund but will have an effect on road repairs.

Department heads today are expected to turn in suggestions for closing the gap. The police and fire departments are being asked to trim 1 percent from their budgets, while all other departments are being asked to identify cuts of 3-4 percent.

Although public safety is frequently cited as the city's No. 1 priority, City Manager Dick Zais says the police and fire departments can't be completely off-limits because their budgets -- along with municipal court -- already eat up 65 percent of the city's general fund.

"You can't exempt public safety entirely," he says, "or it would double up the effects on everybody else."

Zais says layoffs are not anticipated, particularly in the police or fire departments, but that just about everything else is on the table.

But he's not ruling out layoffs, either. The tax-based general fund accounts for roughly 500 of the city's 750 employees.

"At this stage, no layoffs," he says, adding, "At this stage."

Some of the deficit can be absorbed by not filling vacancies in the permitting and code departments. Cutbacks in supplies and maintenance are possibilities, as are reductions in professional services. The city could also realize savings by delaying vehicle replacement.

Zais says reductions in overtime as well as service levels and hours of operation are also possibilities.

The city paid $1.3 million in overtime last year and is budgeted for $1.5 million this year.

Even before the economy went south, parks and other "quality of life" services were on the chopping block, Edler said.

Fisher Park Golf Course, by Eisenhower High School, lost $86,000 last year.

With roughly two-thirds of the general fund paying for public safety -- cops, courts, jail, fire -- and tax measures like the EMS levy a no-go with voters, Edler says parks and recreation programs are the logical next step.

"We were going to make these decisions in a good economy," Edler said.

One bright spot are the city's reserve accounts, which at $5 million are more than enough to wipe out the deficit. Using reserves to balance the budget, however, would leave the city vulnerable to an emergency.

Zais says he doesn't consider the deficit an emergency, given that uncertainty about the economy remains.

"It's one thing to deal with a $1 million reduction," he says. "If it gets to $3 or $4 million, it's going to be much much steeper and deeper."

* Chris Bristol can be reached at 577-7748 or cbristol@yakimaherald.com.